Connecticut Tax Calculator
Connecticut Income Tax
Connecticut has a graduated income tax with seven brackets, ranging from 2% to 6.99%. Connecticut was the last state in New England to adopt an income tax, implementing it in 1991. The system has grown more progressive over time, with additional higher brackets added in subsequent years. Connecticut also has a unique "tax recapture" provision: taxpayers with Connecticut adjusted gross income (AGI) above certain thresholds must add back a percentage of the tax benefit from lower brackets, effectively increasing the marginal rate for upper-income earners to as much as 6.99% on all income.
The personal exemption in Connecticut is income-based and phases out for higher earners. For single filers with AGI under $30,000, the exemption is $15,000. For married filing jointly with AGI under $48,000, it is $24,000. These exemptions phase out entirely above $44,000 (single) and $64,000 (married). Connecticut does not use the federal standard deduction; it has its own exemption system. The state also does not allow itemized deductions.
Social Security benefits are now fully exempt from Connecticut income tax. State and local government pension income is also exempt. Connecticut imposes a 6.99% tax on capital gains, which is included in regular income. The state also has a pass-through entity tax (PET) that allows owners of pass-through businesses to pay state tax at the entity level and claim a credit on their individual return, working around the federal $10,000 SALT deduction cap.
| Taxable Income (Single) | Rate |
|---|---|
| $0 – $10,000 | 2.0% |
| $10,001 – $50,000 | 4.5% |
| $50,001 – $100,000 | 5.5% |
| $100,001 – $200,000 | 6.0% |
| $200,001 – $250,000 | 6.5% |
| $250,001 – $500,000 | 6.9% |
| Over $500,000 | 6.99% |
Connecticut Sales Tax
Connecticut levies a flat 6.35% sales tax with no local add-ons, making it one of the simpler sales tax states. However, Connecticut applies a higher rate of 7.75% to certain luxury items: motor vehicles priced over $50,000, jewelry over $5,000, clothing and footwear over $1,000, and handbags and luggage over $2,000.
Most groceries (unprepared food) are exempt from Connecticut sales tax. Clothing and footwear priced under $50 per item are also exempt. Prescription medications and non-prescription drugs are exempt. Connecticut taxes most services at the 6.35% rate, including computer and data processing services, which is broader than many states. Digital goods including downloaded music, movies, and e-books are also taxable.
Connecticut Property Tax
Connecticut has one of the highest effective property tax rates in the United States at approximately 2.15%. Because Connecticut has no county government, each of the state's 169 municipalities is responsible for funding its own services, including public education. This creates significant variation between towns: wealthy communities like Greenwich may have lower effective rates due to high property values, while less affluent cities like Hartford, Bridgeport, and New Haven have some of the highest effective rates in the state, sometimes exceeding 3%.
Connecticut offers several property tax relief programs. The Elderly/Disabled Homeowners Program provides tax credits for qualifying residents aged 65 and older or permanently disabled. The state also has a circuit breaker program that limits property tax to a percentage of income for eligible seniors. Municipalities may offer additional local exemptions. The Property Tax Credit on the state income tax return provides up to $300 for qualifying homeowners, helping to offset the high property tax burden.
Connecticut's SALT Deduction Challenge
Connecticut residents have been particularly affected by the federal $10,000 cap on State and Local Tax (SALT) deductions enacted in 2017. With high income tax rates (up to 6.99%) and very high property taxes, many Connecticut residents exceed the $10,000 SALT cap easily. A homeowner in Fairfield County paying $15,000 in property tax alone loses the ability to deduct any of their state income tax federally. Connecticut's pass-through entity tax (PET) was designed specifically to help business owners work around this limitation. The PET allows eligible pass-through entities to pay state tax at the entity level, converting what would be a non-deductible individual SALT payment into a deductible business expense.
Connecticut's Wealth and Income Inequality
Connecticut has the highest per capita income in the United States and is home to many hedge funds and financial services firms centered in the Fairfield County "Gold Coast." However, the state also has significant income inequality, with cities like Hartford and Bridgeport having poverty rates well above the national average. This contrast drives much of the political debate around Connecticut's tax policy. The state's high tax burden has led to an ongoing outmigration trend, particularly among wealthy residents moving to no-income-tax states like Florida. Connecticut has lost population in recent Census counts, partly attributed to its tax environment.
Connecticut vs. Neighboring States
- New York — New York has higher top income tax rates (up to 10.9% state + NYC surcharge) but lower property taxes in many areas. New York's combined sales tax (8.52% avg) is higher than Connecticut's 6.35%. Connecticut's overall burden is comparable to suburban New York but lower than NYC.
- Massachusetts — Massachusetts has a flat 5% income tax (plus 4% surtax on income over $1M). Sales tax is 6.25%. Property tax averages 1.14%. Connecticut has higher top income tax rates and much higher property taxes, making Massachusetts more favorable for most income levels.
- Rhode Island — Rhode Island has graduated rates up to 5.99%, lower than Connecticut's 6.99%. Sales tax is 7%. Property tax averages 1.40%. Connecticut is more expensive on income and property tax.
- New Hampshire — New Hampshire has no income tax on wages (only on interest/dividends, being phased out) and no sales tax. Property tax is high at 1.86% but still lower than Connecticut's 2.15%. New Hampshire is far more tax-friendly overall.