Rell looking into possible payroll firm discrepancies

Hartford - Gov. M. Jodi Rell announced Saturday that she had directed the state Department of Revenue Services to investigate reports that some payroll companies may be making larger deductions than necessary, resulting in smaller paychecks for some Connecticut residents.

State officials began receiving reports of over-withholding after new payroll tax deductions thresholds went into effect with the latest state budget.

That budget raised income tax rates for some filers, but the highest rate - 6.5 percent - applies only to individuals making more than $500,000 and joint filers making more than $1 million.

It is unclear how extensive over-deductions may be or how many state residents could be affected.

About 40 percent of employers in Connecticut use payroll companies to administer paychecks.