Tax Overview: Connecticut
Connecticut tax debts are handled by the Department of Revenue Services and can trigger liens, levies, and wage garnishments. The state offers both OIC and installment plans, but neither will stop or lift existing garnishments or levies. Connecticut has no collection statute of limitations, meaning debts persist indefinitely. Garnishment reduction requires a special hearing process.
Key Tax Facts
- OIC available via Form 656a — will NOT stop collections, must be compliant with all returns
- Installment agreements up to 12 months without financials
- Up to 36 months with full financials, 3 months bank statements, and proof of income (Form C&E-120a)
- Temporary plans available even with Substitute for Returns (SFRs)
- Payment plans will NOT lift garnishment or levy
- Garnishment reduction requires: first garnishment payment received, wage reduction request from employer, and a special hearing
- NO collection statute of limitations — debts persist indefinitely
Common Tax Issues
No collection statute means Connecticut tax debts never expire — they persist until paid or settled
Garnishment reduction is unusually complex — requires a formal hearing process, not just a phone call
Neither OIC nor installment agreements will stop existing collection actions
The 36-month plan requires extensive financial documentation including bank statements and income proof
Resolution Options in Connecticut
Payment Plans (Installment Agreements)
Without financials: Up to 12 months
With financials: Up to 36 months
36 months requires Form C&E-120a plus 3 months bank statements and proof of income. Temporary plans available with SFRs. Payment plan will NOT lift garnishment or levy.
Offer in Compromise (OIC)
Available: Yes
Does NOT stop collections while pending
Form: Form 656a
Will NOT stop collections. Must be compliant with all returns.
Wage Garnishment
Rate: 25%
Can lift with payment plan: No
Can reduce amount: Yes
Reduction requires: first garnishment payment must be received by the state, then wage reduction request completed via employer, then special hearing to argue for reduction.
Penalty Abatement
Available: Yes
Bank Levy
Can release: No
Official Resources
How Tax Advocate Group Helps Connecticut Taxpayers
Whether you're dealing with the IRS, the Connecticut Department of Revenue Services, or both — we provide comprehensive tax resolution services to Connecticut residents and businesses.