Taxpayers won’t notice the new income tax increase immediately, but that’s because the increased withholding, which is retroactive to January won’t be taken out of their checks until Aug. 1.

As part of the two-year, $40.11 billion state budget that still has to be ratified by the state employee unions, income taxes were expanded and increased and the property tax exemption was reduced for middle income earners.

The income tax brackets increased from three to six with the top marginal income tax rate at 6.7 percent. The new income tax rates are 3 percent; 5 percent; 5.5 percent; 6 percent; 6.5 percent and 6.7 percent.

The new tax withholding charts released last month by the Department of Revenue Services instruct employers to start withholding a full 12 months of taxes in the remaining five months of the calendar year. That means employees will have a little bit more than usual withheld from their checks from Aug. 1 to Dec. 31.

“Legislative changes to the income tax for the current tax year were more complex than usual,“ Department of Revenue Services Commissioner Kevin Sullivan said in a May 18 press release. “Therefore, I am very pleased that we turned around the new interim withholding tables in a couple of weeks so employers have plenty of lead time to get ready.”

But those new tax tables also come with some complicated instructions for employers.

In addition to the new tax brackets the state also decided to phase out the 3 percent tax rate on the first few thousand dollars of income. The 5 percent rate will be applied to the remainder of the income for those making under

The phase out of the 3 percent tax starts at adjusted gross income levels for those over $100,500 filing jointly, over $56,500 filing as singles, over $78,500 filing as head of household, and over $50,250 married filing separately.

Making things even more complicated, an additional tax provision requires a recapture of tax from taxpayers over certain income brackets.

The recapture amounts are: $150 per $10,000 of Connecticut adjusted gross income over $400,000 for taxpayers filing jointly, with a maximum total recapture of $4,500; $75 per $5,000 of Connecticut adjusted gross income over $200,000 for taxpayers filing single, with a maximum total recapture of $2,250; $120 per $8,000 of Connecticut adjusted gross income over $320,000 for taxpayers filing as head of household, with a maximum total recapture of $3,600; $75 per $5,000 of Connecticut adjusted gross income over $200,000 for married taxpayers filing separate, with a maximum total recapture of $2,250.

For those who pay estimated quarterly taxes the Department of Revenue Services spokesman Sarah Kaufman suggested taxpayers go back and apply the new rates to their estimated annual income, then subtract what they’ve already paid and figure out the additional new payment for the remainder of the year. There are about 150,000 individuals who make estimated income tax payments each year. She said because the tax was retroactive there won’t be any penalties applied for late payments of the tax.

It’s likely there are going to be a lot of angry taxpayers out there starting the first week of Aug. 1.

“No one is happy with any income tax increase but it is better than the alternative, which is to slash municipal aid and force property taxes to soar – especially for seniors and middle class families,” Derek Slap spokesman for the Senate Democrats said Tuesday. “Connecticut’s budget – which includes more than $2 billion in spending cuts and state employee concessions – is tough, but it does provide a foundation for real economic growth, something that’s been missing for too long.”

Republican lawmakers have been critical of the tax increases in the past.  Last week House Minority Leader Lawrence Cafero, R-Norwalk, said Gov. Dannel P. Malloy focused his tax increases, especially the income tax increase, on the middle class.

“Everything this Democratic legislature and governor did was against the tide,” Cafero said last week. “Now, I think they may be a little embarrassed about it.”

Cafero, who held a town hall meeting in Norwalk Monday, said today that he thinks taxpayers are going to be angry because it’s not only the income tax they’re being hit with. It’s the sales tax and the repeal of the exemption on clothing under $50.

“They’re grousing at the water cooler,” Cafero said. “I’ve already been hearing from them and I didn’t even vote for this budget.”

He said they’re universally upset and shaking their heads in disbelief at how little spending was cut and “what a sweetheart deal” the unions got.

Click here to download the new withholding rules. And here for a copy of the new withholding charts.

Most of the other tax changes included in the budget don’t go into effect until July 1, including the increased sales tax, cigarette tax, and alcohol tax. Also many of the items once exempt from sales tax, such as clothing under $50, will have a sales tax applied starting July 1.

Click here  for a more detailed list of those taxes.