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Connecticut Income Tax: 6.99% Top Rate & Estate Tax (2026)

2% to 6.99% Graduated • SS Exempt Below Threshold • $15M Estate Exemption • PTET Available • Property Tax Credit
Conn. Gen. Stat. §12-700Conn. Gen. Stat. §12-391Conn. Gen. Stat. §12-704d
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Connecticut has one of the more complex state income tax systems in the Northeast. Its graduated rates run from 2% to 6.99%, with the 6.99% top rate applying to income above $1,000,000 for joint filers ($500,000 for single filers). Connecticut is one of the few states that taxes Social Security benefits, though an exemption is available for lower-income recipients. Connecticut also has its own separate estate tax - unlike New Jersey, which repealed its estate tax in 2018, Connecticut still imposes estate tax with an exemption that now matches the federal basic exclusion amount ($15 million for 2026). Connecticut's pass-through entity tax was one of the first in the country and remains a significant planning tool for business owners.

Connecticut 2026 Key Numbers

Income tax rates (MFJ brackets, approximate):

$0 - $20,000: 2% | $20,001 - $100,000: 4.5% | $100,001 - $200,000: 5.5% | $200,001 - $400,000: 6% | $400,001 - $500,000: 6.5% | $500,001 - $1,000,000: 6.9% | Over $1,000,000: 6.99%

Social Security: Exempt for filers with federal AGI under $75,000 (single) or $100,000 (MFJ). Above these thresholds a partial subtraction applies: Connecticut taxes the lesser of the federally taxable benefits or 25% of the lesser of Line 1 or Line 9 of the federal Social Security Benefits Worksheet.

Estate tax exemption: $15,000,000 for 2026 (matches federal basic exclusion under OBBBA P.L. 119-21 §70106; indexed annually after 2026).

Property tax credit: Up to $300 credit against Connecticut income tax for property taxes paid on a primary residence or motor vehicle.

Connecticut Pass-Through Entity Tax

Connecticut enacted one of the country's first pass-through entity taxes. It is optional: a partnership or S-corporation doing business in Connecticut or with Connecticut-source income may elect to pay it, and the election is made annually and is irrevocable. The entity pays Connecticut income tax at the entity level, and individual owners receive a credit on their personal returns. This effectively bypasses the federal SALT deduction cap ($40,400 for 2026, phased down for modified AGI above $505,000) for Connecticut business income. Like the New York and California programs, the Connecticut PTET is elective; the entity makes the election annually by checking the box on a timely filed Form CT-1065/CT-1120SI.

Connecticut's Social Security income threshold has not been indexed and captures more middle-income retirees each year due to inflation. A Connecticut couple with $110,000 of income owes Connecticut income tax on part of their Social Security benefit (no more than the federally taxable amount, and generally no more than 25% of the benefits), even though the same couple might pay little or no federal income tax on that benefit depending on their overall income composition. Retirees moving to Connecticut from Florida or other Social Security-exempt states face this surprise.
Related Topics
State & Compliance HubAll state tax topics SALT PlanningConnecticut elective PTET - annual election Estate Tax GuideConnecticut estate tax - exemption matches federal basic exclusion Social Security TaxConnecticut taxes SS above $75K/$100K AGI threshold No Income Tax StatesCompare Connecticut 6.99% to zero-tax alternatives New Jersey TaxNortheast high-tax state comparison
Authority: Conn. Gen. Stat. §12-700 (Connecticut income tax - graduated rates on Connecticut taxable income; rates from 2% to 6.99%; brackets and thresholds set by statute; Social Security exemption below AGI thresholds); Conn. Gen. Stat. §12-704d (Connecticut pass-through entity tax - optional for partnerships and S-corps with Connecticut nexus; annual irrevocable election; entity pays at applicable rate; owners receive credit on personal return); Conn. Gen. Stat. §12-391 (Connecticut estate tax - imposed on taxable estates of Connecticut decedents; exemption matches federal basic exclusion under OBBBA P.L. 119-21; $15M for 2026, indexed annually thereafter); Conn. Gen. Stat. §12-704c (property tax credit - up to $300 against Connecticut income tax for property taxes paid on primary residence or motor vehicle; income-limited for higher earners).