2026 Business Compliance Checklist for Connecticut Small Businesses

Connecticut business owners face unique compliance challenges in 2026. Between state-specific regulations, recent law changes, and fast-approaching deadlines, staying compliant requires attention to details that other states don’t impose. This checklist covers the essential compliance requirements Connecticut businesses must address right now.

The Connecticut Compliance Landscape

Connecticut makes business compliance challenging. The state is the only one with both estate and gift taxes, requires annual reports with different deadlines by entity type, has no general business license but requires extensive industry-specific licensing, and maintains one of the nation’s strictest data privacy laws.

Three critical 2026 changes demand attention: minimum wage increased to $16.94 (January 1), paid sick leave expanded to 11+ employee businesses (January 1), and the Data Privacy Act threshold drops to 35,000 Connecticut residents (July 1).

Critical Compliance Deadlines

Annual Reports: Your Business’s Proof of Life

Connecticut requires annual reports to maintain your business’s good standing. Missing this deadline puts your entity in default and can lead to administrative dissolution – which can freeze bank accounts and prevent you from enforcing contracts.

LLCs: File between January 1 and March 31. The $80 fee is due online through Connecticut’s Business One Stop portal. With less than 11 weeks until the March 31 deadline, now is the time to file. Don’t rely on state reminders – they help, but filing remains your responsibility.

Corporations: File by the last day of your anniversary month (the month you incorporated or qualified in Connecticut). Domestic corporations pay $150; foreign corporations pay $435. Mark your calendar with your specific deadline because it won’t match the LLC window.

Essential information needed: Your registered agent details, business address, principal members/officers, NAICS code, and contact information. Review this information annually—outdated registered agent information causes serious compliance problems.

Connecticut Data Privacy Act: July 1 Expansion

Connecticut’s data privacy law expands July 1, 2026, dropping the threshold from 100,000 to 35,000 Connecticut residents. If your business processes personal data on 35,000+ Connecticut residents, you must implement privacy policies, obtain opt-in consent for sensitive data, provide consumer rights mechanisms, and establish vendor agreements.

Fines reach $5,000 per willful violation. Website cookies present particular risk – many businesses don’t realize their privacy policies don’t match their actual data collection.

Action required: Audit your website now. If you collect emails, use analytics, or run any marketing automation, you may be processing more Connecticut data than expected.

Employment Law Compliance

Minimum Wage (January 1): Connecticut’s minimum wage is now $16.94/hour – the second highest nationally. Tipped workers earn $6.38 (servers) or $8.23 (bartenders) but must total $16.94 with tips. Training wage for 16-17 year olds is $10.10 for the first 90 days.

Verify rates immediately, update posters, and document adjustments.

Paid Sick Leave (January 1): Now covers 11+ employee businesses (previously 25+). If you had 11+ employees on January 1’s payroll week, implement a policy now. All Connecticut employers will be covered in 2027.

Workplace Posters: Update annually and post digitally for remote workers.

Tax Compliance

Urgent: Fourth quarter 2025 estimated taxes due January 15.

Connecticut PTE Tax: Deduct state income tax at entity level, bypassing the $10,000 federal SALT cap. Many businesses miss this valuable deduction.

Sales Tax & Employer Taxes: File on schedule through myconneCT. Missing deadlines creates accumulating penalties.

Industry-Specific Licenses

Connecticut has no general business license but requires industry-specific licenses. Common needs: food service (health permits, liquor licenses), professional services (attorney, CPA, engineer, contractor licenses), construction (contractor/home improvement licenses), retail (sales tax permits), and real estate (broker/agent licenses). Municipal governments often add requirements – check with your local clerk.

Registered Agent Requirements

Every Connecticut entity needs a registered agent with a Connecticut physical address to receive legal documents. Update immediately if your agent changes. Missing legal notices causes serious problems – default judgments, administrative dissolution.

Common Compliance Mistakes

Assuming exemptions apply. Small businesses face many 2026 changes. The 35,000 Connecticut resident data threshold is surprisingly low.

Relying on reminders. Annual report reminders help, but filing remains your responsibility without them.

DIY complex compliance. Data privacy, employment law, and tax optimization warrant professional guidance. Getting it wrong costs more than getting help.

Not filing when inactive. Non-operating businesses still must file annual reports. Tax-exempt status doesn’t eliminate requirements.

Waiting. March 31 arrives fast. Data privacy takes months to implement. Start now.

Your Action Plan

This Week: Verify January 1 minimum wage is implemented, file Q4 2025 estimated taxes (due January 15), update posters, confirm paid sick leave applicability, update registered agent if changed.

Before March 31 (LLCs): File annual report through Business One Stop, update information, budget $80.

Before Anniversary Month (Corporations): Determine deadline, file report, budget $150 (domestic) or $435 (foreign).

Before July 1: Audit data practices, determine if 35,000 resident threshold applies, implement privacy policies, update website notices, establish vendor agreements.

Throughout 2026: Renew licenses, file taxes on schedule, review employment classifications quarterly, keep records current.

Professional Guidance Makes the Difference

Connecticut’s unique compliance requirements – from data privacy laws to employment regulations – benefit from experienced guidance. Our business law team helps eastern and central Connecticut businesses navigate these complexities with practical, straightforward solutions.

Ready to ensure your business stays compliant in 2026? Contact The Prue Law Group at (860) 423-9231 or visit pruelawgroup.com to schedule a consultation.

Sources:

Connecticut Secretary of State. “Business One Stop Portal.” https://business.ct.gov/

Connecticut Department of Labor. “Minimum Wage Information.” https://www1.ctdol.state.ct.us/lmi/ctminimumwage.asp

Governor Ned Lamont. “Governor Lamont Announces Connecticut’s Minimum Wage Will Increase to $16.94 on January 1, 2026.” September 3, 2025. https://portal.ct.gov/governor/news/press-releases/2025/09-2025/governor-lamont-announces-minimum-wage-will-increase

Ketch. “Connecticut Data Privacy Act: CTDPA Compliance Explained.” July 8, 2025. https://www.ketch.com/regulatory-compliance/connecticut-data-privacy-act-ctdpa

Hartford Business. “New rules expand Connecticut’s data privacy law and test small-business readiness.” November 3, 2025. https://hartfordbusiness.com/article/new-rules-expand-connecticuts-data-privacy-law-and-test-small-business-readiness/

LLC University. “Connecticut LLC Annual Report.” July 24, 2025. https://www.llcuniversity.com/connecticut-llc/annual-report/

Connecticut Department of Revenue Services. “myconneCT Portal.” https://portal.ct.gov/drs

The Prue Law Group has served eastern and central Connecticut since 1980, providing comprehensive business law, estate planning, probate, and elder law services. Our team’s deep local knowledge and specialized expertise help business owners protect what matters most. AI may have been used for the initial research and drafting of the article. This content is intended for general informational purposes only and should not be construed as legal advice. For guidance on your specific situation, please contact our office for a consultation.

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