Everything You Need to Know About State Taxes In Connecticut

FT Contributor
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The Connecticut tax system is implemented by the Department of Revenue Services (DRS). Residents are responsible for filing a tax return with the state if they earned income. Property owners are responsible for paying taxes to their local jurisdictions on the property they own.

Connecticut Income Tax

When you earn income, you must pay federal income taxes and if you’re a Connecticut resident, you’re also responsible for paying state taxes. The amount of state income taxes you pay depends on how much you earned and the status you choose when filing your taxes. Connecticut has seven different tax brackets that range from 3% to 6.99%.

CT Income Tax Rate

If you’re single or married but filing separately, the following tax brackets apply:

Taxable Income Tax Rate
$0 to $10,000 3%
$10,001 to $50,000 5%
$50,001 to $100,000 5.5%
$100,001 to $200,000 6%
$200,001 to $250,000 6.5%
$250,001 to $500,000 6.9%
More than $500,000 6.99%

If you’re filing as the head of household, the following tax rates apply:

Taxable Income Tax Rate
$0 to $16,000 3%
$16,001 to $80,000 5%
$80,001 to $160,000 5.5%
$160,001 to $320,000 6%
$320,001 to $400,000 6.5%
$400,001 to $800,000 6.9%
More than $800,000 6.99%

If you’re married and filing jointly, you’ll pay the following tax rates:

Taxable Income Tax Rate
$0 to $20,000 3%
$20,001 to $100,000 5%
$100,001 to $200,000 5.5%
$200,001 to $400,000 6%
$400,001 to $500,000 6.5%
$500,001 to $1,000,000 6.9%
More than $1,000,000 6.99%

You must include all gross income you earned throughout the year, such as

  • Income earned in and outside of Connecticut;
  • Capital gains;
  • Interests and dividends;
  • Rental income;
  • Alimony;
  • Prizes or award money;
  • Taxable Social Security or disability benefits;
  • Taxable pensions, annuities, and IRA distributions;
  • Unemployment compensation;
  • Income from businesses.

Connecticut Sales Tax

Connecticut has a 6.35% statewide sales tax on the purchase of taxable goods and services. While there are no additional jurisdiction taxes, the state imposes a 7.75% luxury tax on certain purchases made in Connecticut, including:

  • Most vehicles that are $50,000 or more;
  • Jewelry priced at over $5,000;
  • Clothing and shoes more than $1,000;
  • Handbags, luggage, or other accessories that cost over $1,000.

While most goods and services are subject to sales tax, there are several sales and use tax exemptions. Some of these exemptions include the following:

  • Bicycle helmets;
  • Connecticut or U.S. flags;
  • College textbooks;
  • Internet service;
  • Certain medical equipment;
  • Magazines and newspapers;
  • Child car seats;
  • Gun safety accessories.

Connecticut Property Tax

Your city or town calculates and administers the property taxes you’re required to pay on real estate you own. The local tax collector is responsible for assessing the value of your property and sending you a property tax bill based on this assessment and the current tax rate in the area.

The Connecticut Office of Policy and Management provides information on local property tax collectors and assessors. Your local government sets the property tax due date so it may vary by location. However, most tax collectors send out property tax bills in June. You have a 30-day payment grace period until interest charges begin to accrue.

Connecticut provides several property tax relief programs that offer eligible homeowners credits on their property tax bills. These programs target specific groups of homeowners, such as:

  • Veterans;
  • Residents who are disabled;
  • Elderly residents;
  • Firefighters or emergency personnel;
  • Low-income residents.

Eligible homeowners can apply to programs with their local tax collectors for credit on their property tax bills.

Connecticut Estate Tax

While Connecticut doesn’t impose an inheritance tax, you may be responsible for paying estate taxes or gift taxes if you’re the recipient of a loved one’s assets or property. A gift or estate tax only applies if the taxable estate and gifts were made on or after January 1, 2005 and are worth $3,600,000 or more. The total taxable value determines the tax rate, which could be from 7.8% to 12%.

Other Taxes In Connecticut

Connecticut imposes an electronic cigarette tax that equates to 40 cents per milliliter of the electronic cigarette liquid. A 15% sales tax rate applies to short-term rental room occupancies for up to 30 consecutive days. On October 1, 2019, the state declared digital goods and canned or prewritten software as “tangible personal property” and taxable at the statewide 6.35% sales tax rate.

Filing Taxes In Connecticut

You must prepare your taxes and file them by April 15 each year. You can file for an extension by submitting Application for Extension of Time to File Connecticut Income Tax Return for Individuals (Form CT-1040EXT) and mailing it with your tax payment to:

Department of Revenue Services
P.O. Box 2977
Hartford CT 06104-2977.

You can file your taxes online using the TSC Online system. When you register for an online account, you can track the status of your return, including your refund, at any time. If you prefer, you may submit a paper Connecticut Resident Income Tax Return (Form CT-1040) to the DRS. If you’re including a tax payment with your form, mail it to:

Department of Revenue Services
P.O. Box 2977
Hartford CT 06104?2977.

If you don’t need to include payment, mail your completed tax return to:

Department of Revenue Services
P.O. Box 2976
Hartford CT 06104?2976.

If you owe taxes but can’t pay the entire amount, DRS may provide you with an income tax payment plan. You must meet certain eligibility guidelines, including having liabilities that are $10,000 or less and being current on your return filing.

As a Connecticut resident, it’s important to understand the state’s tax system. After reviewing how property taxes are calculated and when income taxes are due, you’ll be able to file your return with the state correctly and on time.

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