3410 CT Income Tax Withholding for Athletes and Entertainers

Policy Sections

3410.1 Overview

3410.2 General Rule: Payments Subject to the Connecticut Athlete & Entertainer Withholding Tax

3410.3 Exceptions to the Connecticut Athlete and Entertainer Withholding Tax

3410.4 University Resource: Tax Department

This policy summarizes the State of Connecticut income tax withholding requirements with respect to payments to athletes and entertainers.

The University is required by Connecticut law to withhold income tax on payments to athletes and entertainers.  These withholding rules apply to (i.) payments to individuals who are not considered University employees (or their agents) and (ii.) performing entities.  The University is required to withhold tax at a rate of 6.99% on such payments unless an exception to the withholding tax applies and the appropriate forms required by the State have been completed and approved, if applicable.  These forms must be attached to the request for payment.  (See Procedure 3410 PR.01 Obtaining Exemption or Reduced Rate of Withholding for CT A&E Tax.)

This policy is intended to provide guidance to the University community with respect to the State of Connecticut income tax withholding requirements for payments made to athletes and entertainers (or to their agents), and to promote compliance with the State of Connecticut income tax withholding rules.

A&E Tax

In this policy, this abbreviation refers to the Connecticut Athlete and Entertainer Withholding Tax.

Athlete or Entertainer (Performer or Performing Entity)

See Section 3410.2, below, for a listing of the types of performers or performing entities subject to the A&E Tax.

DRS

Connecticut Department of Revenue Services, the agency of the State of Connecticut that administers the State’s tax laws.

Connecticut law requires the University to withhold income tax from payments to athletes and entertainers (or their agents) who are not considered employees of the University and performing entities, if they perform services in Connecticut.  Unless it is determined that an exemption from withholding or a reduced rate of withholding is applicable (see Section 3410.3, below), the University is required to withhold tax from such payments at the rate of 6.99%.

The Connecticut athlete and entertainer withholding tax (“A&E Tax”) is required to be withheld by the University on payments¹ made directly to the performer or performing entity or to agents, managers, agencies, or other individuals or entities representing the performers:

• for services performed in Connecticut;
• by an athlete or entertainer (hereinafter, “performer” or “performing entity”); and
• who is not considered an employee of the University.

Payments for services performed in Connecticut by the following types of performers or performing entities are subject to withholding (Note: This list is not all inclusive):

• Actors
• Singers
• Dancers
• Musicians
• Comedians
• Square dance callers
• Writers
• Directors
• Set designers
• Band owners
• Public speakers (see note below regarding Lecturers and Guest Speakers)
• Any other person appearing on or in:
  
  • Television
  • Radio
  • The stage
  • A night club performance
  • A hotel show
• Any person whose performance in Connecticut is recorded or filmed (regardless of whether or where such a performance is broadcast)
• Wrestlers
• Boxers
• Golfers
• Tennis players
• Baseball players
• Other athletes or athletic teams
• Referees and trainers
• Circus performers
• Bands
• Orchestras
• Dance teams
• Theater groups
• Sound and light crews
• Cameramen for television productions
• Other performing entities

Other individuals or entities that perform services for the University may also be considered athletes or entertainers for purposes of the A&E Tax.  If you are unsure if an individual or entity is subject to the A&E Tax, contact the University Tax Department to determine if the A&E Tax is applicable.

A. Lecturers and Guest Speakers: The DRS has informally stated that presentations made by lecturers or guest speakers in a classroom setting or which are open to the general public constitute public speaking and are therefore subject to the A&E Tax.  (The DRS also indicated that a lecturer or speaker who controls course content and grading might not be a public speaker subject to the A&E Tax.  However, an individual who teaches a class in this capacity should, in almost all cases, be paid as an employee of the University.)

B. Stage Managers, Costume Designers, Makeup Artists: The DRS has informally indicated that stage managers, costume designers, and makeup artists are not performers and are not subject to the A&E Tax.

C. Management Fee / Booking Agent Fee / Speakers Bureau Fee: If the agent’s fee is paid together in a single check with the fee for the performance, the entire amount is subject to the A&E Tax.  Tax must be withheld from the entire amount even if the contract separately states the portion of the total payment that represents the agent’s fee.  If the agent’s fee is paid separately (i.e., via separate check), the payment is not subject to the A&E Tax.

• Example: The total amount the University will pay for a performance is $6,000.  The contract states that $1,500 of the total represents the booking agent’s fee.  If the $6,000 is paid in one check (payable to either the performer or the agent), the entire amount is subject to 6.99% A&E Tax withholding (assuming the University has not received documentation authorizing a reduced rate or waiver of withholding tax).  If the University cuts a separate check in the amount of $1,500 payable to the agent for the booking fee, that amount is not subject to A&E Tax withholding, although the $4,500 payment is.

The State of Connecticut has provided several exceptions to the 6.99% withholding requirement outlined in Section 3410.2, above. 

In order to qualify for exemption from withholding (or reduced withholding) under one of these exceptions, the performer or performing entity may be required to complete and submit certain tax forms to the University or to the Connecticut Department of Revenue Services (“DRS”).  See Procedure 3410 PR.01 Obtaining Exemption or Reduced Rate of Withholding for CT A&E Tax for a description of the existing exceptions and instructions for determining which forms, if any, are required to qualify for one of these exceptions to the A&E Tax.

Note: The State of Connecticut does not recognize any reduced withholding rates (including full exemption) pursuant to U.S. tax treaties with other countries.

The University Tax Department is a resource for University Departments and the University community with respect to the A&E Tax.  The University Tax Department is available to review a payment to determine if it is eligible for an exemption from withholding and also to provide guidance with respect to the forms required to be filed.

1. The University will not withhold tax on payments for the reimbursement of substantiated expenses made in accordance with University policies and procedures.