Taxes in Connecticut


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Connecticut - State

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.

Connecticut Tax Rates

State Sales Tax6.35%
Avg State/Local Sales Tax6.35%
Gas Tax$0.35 per gallon
Diesel Tax$0.49 per gallon
Cigarette Tax$4.35 per pack
Income Tax6.99%
Effective Tax Rate:4.08%
Property Tax2.14%
Social Security TaxPartial
Medical/Dental Deduction:None
Federal Income Tax Deduction:None
Retirement TaxPartial
State Taxes in Connecticut

Connecticut State Taxes Explained

Connecticut Sales Tax

6.35%. Food, prescription 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 Taxes

State income tax bracket range from 3% (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 2.14% effective rate. The median home value in the state is $275,400 and it incurs $5,898 in property taxes.

An annual property tax credit or rent rebate is available to Connecticut residents age 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 who are married and file 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 14% of income from pensions and annuities using those same income qualifiers. This phased-in exemption will increase by 14% yearly until it reaches 100% in the tax year 2025. Teachers can choose from the 14% pension exemption or take a 25% exemption on the state pension income. Connecticut exempts military pensions.

Beginning in 2023, 25% of a traditional IRA distribution is exempt for joint filers (less than $100,000 of federal adjusted gross income) and other taxpayers (less than $75,000). The exemption percentage will increase to 50% in 2024, 75% in 2025, and 100% in 2026.

See Connecticut Tax Tips for Seniors for more information.

Connecticut Estate and Inheritance Taxes

Connecticut has no inheritance tax but does levy an estate tax and a gift tax.

Connecticut taxes the value of an estate over $5.1 million. The tax also applies to nonresidents who owned real or tangible personal property in Connecticut. The estate tax rate starts at 10% on the first $1 million, then $100,000 plus 10.4% on the next million. The tax continues up to $540,000 plus 12% on values over $10.1 million. $15 million is the maximum taxed.

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 $5.1 million and is taxed at the same rates used for estate tax.

For general information on Connecticut taxes, visit the Connecticut Department of Revenue.

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