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Taxes in Connecticut
From high income and property taxes to partial retirement income exemptions and estate and gift taxes, Connecticut’s tax structure combines retiree relief with some of the nation’s more complex wealth transfer taxes.
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At a glance:
- Connecticut has relatively high income and property taxes, along with a 6.35% state sales tax and no local sales taxes, but it also offers targeted relief for retirees through Social Security and pension exemptions.
- Seniors may qualify for partial or full exemptions on Social Security and pension income depending on income levels, with broader exemptions set to expand in the coming years.
- The state also provides property tax credits for eligible older adults and maintains no inheritance tax, though it does impose both estate and gift taxes on higher-value estates and transfers.
There are no local Connecticut sales taxes, but it is the only state with a gift tax. Residents must also budget for several other steep fees. Below, we explain various Connecticut state taxes affecting retirement income, such as sales tax, inheritance tax, and property taxes.
For information regarding taxes in other states, see Retirement Taxes by State.
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Connecticut Tax Rates
| State Sales Tax | 6.35% |
| Avg State/Local Sales Tax | 6.35% |
| Gas Tax | $0.25 per gallon |
| Diesel Tax | $0.52 per gallon |
| Cigarette Tax | $4.35 per pack |
| Income Tax | 6.99% |
| Effective Tax Rate | 2.00% |
| Property Tax | 1.78% |
| Social Security Tax | Partial |
| Medical/Dental Deduction | None |
| Federal Income Tax Deduction | None |
| Retirement Tax | Partial |
Connecticut Tax Rates Explained
Connecticut Sales Tax
Connecticut has a 6.35% sales tax rate. Food, prescriptions, and over-the-counter drugs are exempt. There are no local sales taxes, but it’s the only state with a gift tax. Vehicles valued at more than $50,000, jewelry valued at more than $5,000, and clothes, footwear, and accessories costing over $1,000 per item are taxed at 7.75%.
Connecticut Income Tax
State income tax brackets range from 2% (of up to $20,000 of taxable income for married joint filers and up to $10,000 for single filers) to 6.99%.
Connecticut Property Taxes
Connecticut property taxes are among the highest in the nation, with a 1.78% effective rate. The median home value in the state is $410,357, and it incurs $7,304 in property taxes.
An annual property tax credit or rent rebate is available to Connecticut residents aged 65 or older. A surviving spouse of a previously approved applicant aged 50 or older and totally disabled persons are also eligible. Income must be $45,800 or less for married couples (maximum $1,250 benefit) and no more than $37,600 for single taxpayers ($1,000). Municipalities may provide additional tax relief for seniors.
See Connecticut Property Tax Credit For Elderly and Disabled for details.
Connecticut Retirement Taxes
Social Security is exempt for individual taxpayers with a $75,000 federal adjusted gross income. Those married and filing a joint return must have a federal AGI below $100,000. Taxpayers who exceed the income limit can deduct 75% of federally taxed Social Security income on the Connecticut tax return.
Connecticut exempts 100% of income from pensions and annuities using those same income qualifiers. Teachers can choose from the 100% pension exemption or take a 25% exemption on the state pension income. Connecticut exempts military pensions.
The exemption percentage will increase to 100% in 2026.
See Connecticut Tax Tips for Seniors for more information.
Connecticut Inheritance and Estate Taxes
Connecticut has no inheritance tax but does levy an estate tax and a gift tax.
Connecticut taxes the value of an estate over $13.99 million. The tax also applies to nonresidents who own real or tangible personal property in Connecticut. The estate tax rate is imposed at 12% over the value of $13.99 million.
Spouses pay no tax on the descendant’s estate. The nonresident estate tax is calculated by multiplying the estate value by a fraction. Figuring the resident tax is more complicated. See Form CT-706/709 instructions for details.
Connecticut’s gift tax applies to gifts of real estate and other tangible and intangible property taxed by the federal government. The tax applies to gifts valued over $13.99 million and is taxed at the same rates used for estate tax.
For general information on Connecticut taxes, visit the Connecticut Department of Revenue.