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: 76.80 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: 75% 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). Taxpayers above those thresholds may qualify for a partial deduction.
- Private Pensions: 100% exempt if federal AGI is less than $75,000 ($100,000 for joint filers). Taxpayers above those thresholds may qualify for a partial deduction.
- 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 $56,500 ($100,500 married filing jointly) subject to recapture of $25 for every $5,000 increment.
Property Tax
- Local municipalities average 1.92% 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. Recent legislation allows for veterans with a 100% disability rating to be 100% exempt.
- 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
