Property Management Bookkeeping in Connecticut

Money held for owners in Connecticut is not your money, and Connecticut sets its own rules — through state law and the Connecticut Secretary of the State-registered licensing regime — on how those funds are held, how often they are reconciled, and what records must exist. We keep the trust ledger reconciled to the bank with owner-level detail behind every balance; whether that satisfies Connecticut's specific requirement is a determination for you and your attorney, not us.

Security deposits in Connecticut are a liability, not income. Connecticut caps a residential deposit at 2 months' rent, and requires you to return or account for it within 30 days of move-out. That deadline is why the ledger has to be per-tenant rather than one pooled balance — a pooled figure cannot answer "what is owed to this tenant, and by when," which is the only question that matters when a deposit is disputed.

Registering to do business in Connecticut runs through the Connecticut Secretary of the State, with tax accounts through the Connecticut Department of Revenue Services and employer accounts through the Connecticut Department of Labor. Connecticut treats these as wholly independent, so being in good standing with one says nothing about the others — and the sales tax account is the one that accrues a real balance while you are not looking.

The Connecticut statewide base rate is 6.35%. Local rates stack on top and are generally sourced to the delivery address, so the effective rate varies within the state. Getting sourcing right is what keeps the liability account matching what you actually collected.