Built from official Secretary of State sources · Updated April 2026 · Instant PDF download

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CONNECTICUT

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What catches Connecticut business owners off guard

Connecticut requires LLCs to file an annual report by the anniversary of their formation date, with a filing fee of $80. But the real compliance burden in Connecticut comes from the state’s tax structure. Connecticut imposes a 6.5% corporate business tax, a 15% surcharge on that tax (the Business Tax Credit Limitation), and a pass-entity tax that applies to many LLCs — making it one of the more expensive states for business taxation in the Northeast.

Connecticut also requires businesses to register for the state’s Paid Family and Medical Leave (PFML) program if they have one or more employees. Contributions are mandatory and the reporting requirements are separate from standard payroll tax filings. New employers who don’t register for PFML by their first payroll run risk back-assessments and penalties.

Connecticut Business Compliance

Quick-Start Teaser

Avoid the biggest traps new owners face – from my 27-page full guide

PHASE 1: BUSINESS PLANNING & LEGAL STRUCTURE

Validate idea, choose entity (LLC/S-Corp/etc.), register with Secretary of State, get EIN, DBA, operating agreement/bylaws.

■ TRAP ALERT: Picking default LLC instead of S-Corp election when profits exceed $40K+ → Overpaying in self-employment taxes — CT’s 6.99% top income tax plus 15.3% SE tax creates a heavy combined burden.

PHASE 2: STATE & LOCAL REGISTRATIONS

Register for state tax accounts, sales/gross receipts tax, local licenses and permits, unemployment insurance, new hire reporting.

■ TRAP ALERT: Missing the annual report filing window (January 1 - March 31 fixed window) → Late fees, loss of good standing, and eventual administrative dissolution.

PHASE 3: FEDERAL COMPLIANCE

Check federal licenses, set up payroll taxes (EFTPS), I-9 for hires, workplace safety (OSHA/state plan).

■ TRAP ALERT: Commingling personal and business funds → Pierces the corporate veil and exposes your personal assets to lawsuits and debts.

PHASE 4: INSURANCE & RISK MANAGEMENT

General liability, workers’ comp (required in most states), state-mandated benefits, standard contracts/agreements.

■ TRAP ALERT: Skipping workers’ comp — CT requires coverage from the FIRST employee, FIRST DAY → Fines up to $50,000, employer becomes personally liable for all benefits owed to injured workers.

PHASE 5: FINANCIAL SETUP & TAX COMPLIANCE

Open dedicated business bank account, set up bookkeeping/accounting systems.

■ TRAP ALERT: Forgetting CT corporate tax returns are due May 15 (NOT April 15 like federal) → Late filing penalties and interest — this unique CT deadline catches owners who assume the standard April 15 date.

PHASE 6: OPERATIONS & ONGOING COMPLIANCE

Navigate ongoing taxes/regulations, maintain compliance calendar, annual filings.

■ TRAP ALERT: Missing expanding paid sick leave requirements (phased 2026-2027 to cover ALL employers) → Penalties of $500/violation for leave requirements, $100/recordkeeping violation.

Operating in nearby states? New England compliance is more complex than it looks. See our guides for New York, Massachusetts, Rhode Island, and New Jersey.

The complete Connecticut compliance package

Our full Connecticut compliance package covers every filing requirement, deadline, fee schedule, penalty structure, and step-by-step instructions specific to Connecticut businesses.

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