Nonresident Contractor Verification (Blanket AU 961) Bond - Statewide in Connecticut

Brief Summary

One verification bond replaces a stack of project bonds and payment holdbacks. If your company works in Connecticut regularly but has not been registered with DRS for three years, the AU-961 bond earns verified contractor status for a two year period, so customers stop holding back 5% of your payments and you stop filing a 5% bond on every large job.

Connecticut DRS Form AU-961, Verification Bond, is filed with Form AU-960 by a nonresident contractor that wants verified contractor status but has not been registered for all applicable Connecticut taxes for three years. The bond equals 5% of twice the total actual or proposed gross receipts for the verification period, with a $10,000 minimum, and runs to the Department of Revenue Services.

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How to Apply for a Nonresident Contractor Verification (Blanket AU 961) Bond:

• Register for all applicable Connecticut taxes, file every required return and clear any balance owed to DRS.
• Estimate total Connecticut gross receipts for the two year verification period.
• Set the bond at 5% of twice that figure, and never below $10,000.
• Have the contractor and the surety sign AU-961, with the surety's raised corporate seal.
• Complete Form AU-960, Nonresident Contractor Request for Verified Contractor Status, and attach the bond.
• Mail both to DRS, Hartford Regional Office, 450 Columbus Blvd Ste 1, Hartford CT 06103-1837.

Detailed Information About the Connecticut Nonresident Contractor Verification (Blanket AU 961) Bond:

You only need this bond if you lack three years of registration

Verified contractor status under Conn. Gen. Stat. 12-430(7) frees a nonresident contractor from the 5% holdback and from the 5% single project bond on Form AU-964. Form AU-960 lists the conditions. The contractor must be registered for all applicable taxes with the Department of Revenue Services, have filed all required returns, and have no outstanding tax liabilities. On top of that, it must either have been registered for three years or more and be current, or complete Form AU-961 and attach it to AU-960. A contractor with a clean three year record qualifies without the bond.

How the amount is calculated

The AU-961 instructions set the bond at 5% of twice the total actual or proposed gross receipts during the verification period. The minimum is $10,000. Estimate your Connecticut receipts honestly, because the bond is meant to cover the tax exposure on that volume of work.

Term

Verification runs for a two year period, starting January 1 and ending December 31 of the years shown on the form. Plan to renew the request and the bond before the period closes if you keep working in the state.

What the bond guarantees

The contractor and surety are bound jointly and severally to the Department of Revenue Services for the contractor's Connecticut taxes on real property contracts in the state. The bond expires if all taxes, interest and penalties are paid within three years from the last day of the month following the reporting period. Otherwise it stays in force.

Who counts as nonresident

A nonresident contractor is a contractor or subcontractor that does not maintain a regular place of business in Connecticut. A regular place of business is a bona fide office, factory, warehouse or other space in the state, continuously maintained and used, where the company does business in its own name in a regular and systematic manner.

Eligibility and Requirements for a Connecticut Nonresident Contractor Verification (Blanket AU 961) Bond:

• Surety company authorized to do business in Connecticut.
• Connecticut Department of Revenue Services as the protected party.
• DRS Form AU-961, Verification Bond, filed together with Form AU-960.
• Minimum bond amount of $10,000.
• Contractor and surety bound jointly and severally.

Connecticut Nonresident Contractor Verification (Blanket AU 961) Bond FAQs:

Official and Additional Resources for the Connecticut Nonresident Contractor Verification (Blanket AU 961) Bond: