Guilford Adopts Program Allowing Federal Workers to Defer Taxes

GUILFORD, CT - The Board of Selectmen has adopted a program that mirrors a program passed by the state legislature that gives federal workers who live in Guilford additional time to make tax payments without incurring penalties.

The program is designed for workers who went over a month without receiving a paycheck during the federal government shutdown over the dispute between President Donald Trump and the Democrats over the southern border wall.

First Selectman Matt Hoey encouraged his fellow board members to approve the tax deferment program for federal employees as defined in the state statute. Hoey said it is narrowly defined to include employees laid off on the certain date of the federal shutdown and provides for a brief time period when the shutdown ends. It defers interest on taxes for a late payment.

Then 60 days after they return to work, they will have to make the payment. No interest will be due until the 61st day and at that point interest from February 1 will be applied retroactively.

Hoey noted that many borrowers have taxes in escrow so this wouldn’t apply to them, but there is a potential for motor vehicle taxes. He added the overall amount of money being talked about "is not going to be a lot of money."

Many other Connecticut towns have taken similar action.

On the state level, the legislature and Gov. Ned Lamont adopted legislation that allows the state of Connecticut to back interest free loans to federal workers impacted by the shutdown.

Under the agreement non-essential workers, as well as essential federal workers who were required to report to work without pay, will be able to obtain interest-free loans provided by banks or credit unions.

Those loans will be backed by the state. The initial loans will afford impacted employees up to one month’s net pay, capped at $5,000.

The employees can re-apply for these loans up to two more times. The bill prohibits interest on the loans for 270 days after the shutdown ends.

And all program loans have a 90-day grace period during which no interest accrues and the borrower is not required to make payments.