What Is the CT State Income Tax Rate?
Navigate Connecticut's income tax system with clarity. Understand your obligations, how your income is assessed, and opportunities to manage your state tax liability.
Connecticut’s state income tax represents a significant revenue source for the state, supporting various public services and programs. This tax applies to the income earned by individuals residing in or earning income from sources within Connecticut. The state employs a progressive tax system, meaning higher income levels are subject to higher marginal tax rates.
Connecticut’s Income Tax Rates
Connecticut’s income tax structure features multiple brackets, with the lowest marginal tax rate for the 2024 tax year being 2.0% on the initial portion of taxable income. This rate applies to income up to $10,000 for single filers, $20,000 for married filing jointly, and $16,000 for heads of household.
As taxable income increases, it moves into higher brackets with corresponding higher marginal rates. The next bracket is taxed at 3.0%, followed by 4.5%, 5.0%, and 5.5%. The 6.0% rate applies to income exceeding certain thresholds, such as $50,000 for single filers or $100,000 for married filing jointly. The highest marginal tax rate is 6.99%, applying to taxable income above $500,000 for single filers and $1,000,000 for married filing jointly.
Determining Your Connecticut Taxable Income
Connecticut taxable income generally begins with a taxpayer’s federal adjusted gross income (AGI). From this AGI, specific additions and subtractions are made to arrive at the Connecticut AGI.
Common additions include interest income from out-of-state municipal bonds that are federally exempt but taxable by Connecticut. Certain disallowed federal losses might also need to be added back.
Conversely, several subtractions can reduce federal AGI. These include a portion of pension and annuity income, and a percentage of Social Security benefits, both depending on AGI and filing status. Contributions to a Connecticut Higher Education Trust (CHET) account can also be subtracted, up to $5,000 per year for single filers or $10,000 for married filing jointly.
After these adjustments, taxpayers consider exemption amounts and personal credits to refine their final taxable income. Exemption amounts vary by filing status and AGI, providing a deduction that reduces taxable income. A personal tax credit, also tied to AGI and filing status, directly reduces the calculated tax liability.
Who Needs to File and Pay
The requirement to file a Connecticut income tax return depends on residency status and income levels. Connecticut defines three residency statuses: full-year resident, part-year resident, and non-resident.
A full-year resident is someone domiciled in Connecticut or who maintains a permanent abode and spends over 183 days in the state during the tax year. Full-year residents are taxed on all income, regardless of where it was earned.
A part-year resident changes domicile to or from Connecticut during the tax year, or moves into or out of the state establishing or abandoning a permanent abode. Part-year residents are taxed on income earned while a resident and on income from Connecticut sources while a non-resident.
Non-residents are not domiciled in Connecticut and do not maintain a permanent abode for over 183 days. They are taxed only on income derived from Connecticut sources, such as wages for work performed in the state or income from Connecticut real estate.
Beyond residency, specific income thresholds determine the filing requirement. For the 2024 tax year, a single filer needs to file if their gross income or Connecticut AGI exceeds $15,000. For married individuals filing jointly, the threshold is $30,000 for both. These thresholds can differ for other filing statuses.
Understanding Credits and Other Adjustments
Taxpayers may reduce their final Connecticut income tax bill through various credits and adjustments.
One common benefit is the property tax credit, allowing eligible taxpayers to claim a credit for property taxes paid on their primary residence or motor vehicle. The maximum credit is $300 per return, subject to income limitations.
Connecticut also offers an earned income tax credit (EITC) to provide financial relief to low- and moderate-income working individuals and families. The Connecticut EITC is calculated as a percentage of the federal Earned Income Tax Credit, typically around 30.5%. Eligibility mirrors federal requirements, based on income, family size, and other criteria.
Another adjustment is the credit for income taxes paid to other states. This credit prevents double taxation when a Connecticut resident earns income also taxed by another state. It allows taxpayers to reduce their Connecticut tax liability by the amount of income tax paid to the other state, up to the Connecticut tax that would have been due on that same income.