Connecticut

Sales Tax

  • Statewide: 6.35%
  • Counties cannot levy additional sales tax.
  • Common Exceptions at State Level:
    • Prescription and Over-the-Counter Medicine: Exempt
    • Unprepared Foods: Exempt
    • Clothing Items Under $50: Exempt
  • Vehicle Tax: 7.75% (on vehicles over $50,000)
  • Gasoline Tax: 43.40 cents/gallon (Includes all state, local, and federal taxes)
  • Diesel Fuel Tax: 73.60 cents/gallon (Includes all state, local, and federal taxes) 

Sales Tax Comments: Jewelry valued at more than $5,000 and clothing more than $1,000 per item may be subject to a 7.75% luxury goods sales tax.

 

Personal Income Tax

  • Personal Income Tax Rate Range: Seven brackets from 2.0% to 6.99% (on income over $500,000). Higher-income individuals may be subject to a phase-out add-back tax that effectively increases their tax brackets.
  • Standard deduction: None
  • Personal Exemption Allowance: Based on income, can be as high as $15,000. Qualifying widow(er) with dependent can be as high as $24,000. Can phase out to zero.
  • Tax credits: Credits of up to 75% of tax owed are available, based on income.
  • Itemized Deductions Allowed? Yes. Subject to limitations.
  • Retirement Income
    • Social Security: 100% exempt if federal Adjusted Gross Income is less than $75,000 ($100,000 for joint filers). Taxpayers above these thresholds may qualify for a partial deduction.
    • IRAs: 50% exempt if federal AGI is less than $75,000 ($100,000 for joint filers).  
    • 401Ks/Defined contribution employer retirement plans: 100% exempt if federal AGI is less than $75,000 ($100,000 for joint filers). Up to 85% exempt if AGI exceeds $75,000.
    • Private Pensions: 100% exempt if federal AGI is less than $75,000 ($100,000 for joint filers). Up to 85% exempt if AGI exceeds $75,000 (subject to phase-out).
    • Public Pensions: Taxable at ordinary income tax rates, but 100% of state teacher's retirement system income can be excluded.*
  • Military Pay
    • Active Duty Pay: Taxable to the extent included in federal AGI
    • Military Retirement Pay: Exempt
    • Military Disability Pay: Exempt
    • VA Disability Dependency & Indemnity Compensation Benefits: Exempt
    • SBP/SSBP/RCSBP/RSFPP: Exempt
  • *AGI over $105,000 subject to recapture of $25 for every $5,000 increment. 

 

Property Tax

  • Local municipalities average 2.00% of the property's assessed value.
  • Calculation of assessed value: 70% of fair market value.
  • Relief programs for:
    • Veterans/Surviving Spouses: All veterans are entitled to a minimum $1,000 exemption of assessed value. May be eligible for an additional exemption if meet certain income requirements.
    • Disabled Veterans: Exemptions available for disability ratings of 10% and above.
    • 65 and Over or Disabled: Tax credits available based on income, maximum is $1,000 for single filers, $1,250 for married filing jointly
  • Personal Property Tax: Yes, rates and exemptions vary.
Property Tax Comments: Additional exemptions and/or freezes may be eligible at the municipal level.

 

Inheritance & Estate Taxes: Estates over $13.61 million can pay 12%. Tax capped at $15 million. There is no inheritance tax.

 

Department of Revenue website: https://portal.ct.gov/drs

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