This Informational Publication has been obsoleted and
combined with IP 92(4.4)
Connecticut Income Tax Information
For Senior Citizens
PURPOSE: This informational publication is intended as a general guide to the Connecticut income tax for senior citizens. While it does not answer every question about the tax, it will provide answers to some of the most common inquiries.
I am a resident of Connecticut who is retired. My only income is from a pension, social security benefits and a small amount of interest. Must I pay Connecticut income tax?
In general, income that is taxable for federal income tax purposes is also subject to Connecticut income tax, including income from wages, pensions, interest, dividends, annuities, capital gains, etc.
Are any types of income exempt from Connecticut income tax?
Interest from U.S. Government obligations such as U.S. Savings Bonds or Treasury Notes and interest from State of Connecticut bonds or Connecticut municipal bonds are exempt from Connecticut income tax. In general, social security benefits that are taxable for federal income tax purposes will also be subject to Connecticut income tax. However, Connecticut income taxation of social security benefits is limited to 50% of the benefits received, even if a greater percentage of benefits is subject to federal income tax.
What are the Connecticut personal exemptions?
An unmarried person or a married person filing separate for federal income tax purposes whose Connecticut adjusted gross income is $24,000 or less is entitled to an exemption of $12,000. Married persons filing jointly for federal income tax purposes whose Connecticut adjusted gross income is $48,000 or less are entitled to an exemption of $24,000. An unmarried person filing as a head of household for federal income tax purposes whose Connecticut adjusted gross income is $38,000 or less is entitled to an exemption of $19,000. The exemptions are phased out as income levels increase.
What is the Connecticut income tax rate?
For taxable year 1997, the Connecticut income tax rate is 3% of the first $4,500 of Connecticut taxable income for single filers or married individuals filing separate returns, $7,000 for heads of household, or $9,000 for married couples who file a joint return. The tax rate is 4.5% of Connecticut taxable income in excess of these amounts.
How is the Connecticut income tax calculated?
To calculate how much tax you owe, subtract your personal exemption (if any) from your Connecticut adjusted gross income. The result is your Connecticut taxable income. Multiply this amount by the appropriate rates to determine the Connecticut income tax. If you are entitled to a tax credit, the amount of income tax will be reduced by the percent of the credit.
EXAMPLE: Taxpayers are married, filing jointly.
$40,000.00 CT Adjusted Gross Income
-24,000.00 Personal exemption
16,000.00 Connecticut taxable income
Calculation of Tax
$ 270.00 + $ 315.00
-204.75 Tax credit ($585.00 x 35%)
$380.25 Tax due
I am a resident of another state, but live in Connecticut part of the year. Do I owe Connecticut income tax?
If you are a resident of another state, you will not be taxed as a Connecticut resident unless you have a permanent place to live here and spend more than 183 days in Connecticut during the year. However, if you earn income in Connecticut from a job performed or business conducted in Connecticut, you will have to pay Connecticut income tax on that income.
I changed my permanent legal residence during the taxable year. Do I owe Connecticut income tax?
Anyone who changes his or her permanent legal residence from (or to) Connecticut is a part-year resident and may owe Connecticut income tax. Request Form CT-1040NR/PY, Connecticut Nonresident or Part-Year Resident Income Tax Form, for further information.
I am a resident of another state but receive a pension from my former Connecticut employer. Must I pay Connecticut income tax on that income?
For taxable year 1994 and thereafter, income from a pension or retirement plan paid to a nonresident is not subject to Connecticut income tax. However, for taxable years 1991, 1992, and 1993, income from a nonqualified plan connected with former employment in Connecticut is taxable to a nonresident. Interest earned by a nonresident individual from a Connecticut bank is not subject to Connecticut income tax.
If I am a Connecticut resident, will Connecticut income tax be withheld from my pension benefits?
Withholding of Connecticut income tax is available if your pension is paid by a company doing business in Connecticut. Your pension payer will send you Form CT-W4P, Withholding or Exemption Certificate. If you want Connecticut income tax withheld, complete the form and return it to the pension plan administrator.
Retired federal civil service employees may request Connecticut income tax withholding by completing Form CT-W4CS, Request to Withhold Income Tax From Civil Service Annuity, available from the Department's Forms Unit.
Must I make estimated income tax payments?
If you will owe more than $200 in Connecticut income tax, over and above any Connecticut income tax withheld for the taxable year, you should make estimated income tax payments. Use Form CT-1040ES, Estimated Connecticut Income Tax Payment Coupon for Individuals.
Form CT-1040ES also includes instructions and further information. Generally, estimated payments must be made in four equal installments: April 15, June 15, September 15, and January 15. (Taxpayers who are not calendar year filers should use the same filing dates as they use for federal income tax purposes.) If your income varies throughout the year, you may be able to reduce or eliminate the amount of one or more estimated payments by using the annualized installment method. Request a copy of IP 93(6.3), A Guide To Calculating Your Annualized Estimated Income Tax Installments, from the Department's Forms Unit.
What if I am late in making my estimated tax payments?
Interest may be assessed on late payment or underpayment of estimated income tax. To avoid underpayment charges, you must pay the lesser of 90% of your current year's income tax or 100% of your prior year's Connecticut income tax (provided you filed a prior year's return covering a 12-month period). Payments may be made through timely estimated payments, withholding payments or a combination of both.
May I deduct my Connecticut income tax in calculating my federal income tax liability?
If you itemize your deductions for federal income tax purposes, all payments of Connecticut income tax made on or before December 31 of the taxable year are deductible for federal income tax purposes.
What about the Connecticut capital gains, dividends and interest tax?
For taxable years beginning on or after January 1, 1992, there is no longer a separate Connecticut tax on capital gains, dividends and interest income. Capital gains, dividends or interest income that is included in Connecticut adjusted gross income remains subject to the Connecticut income tax.
EFFECT OF THIS DOCUMENT: An Informational Publication (IP) is a document that addresses frequently-asked questions about a current Department position, policy or practice, usually in a less technical, question-and-answer format.
EFFECT ON OTHER DOCUMENTS: IP 91(1.3), issued 12/8/95, is superseded by IP 91(1.4) and may not be relied upon on or after the date of issuance of this Informational Publication.
RELATED FORMS AND PUBLICATIONS:
Request the current edition of the following publications and forms:
IP 92(3.3), Personal Taxes
IP 92(4.2), State Tax Tips for Senior Citizens
IP 92(5.6), Estimated Connecticut Income Taxes
Form CT-1040ES, Estimated Connecticut Income Tax Payment Coupon for Individuals
Form CT-W4P, Withholding Certificate for Pension or Annuity Payments
Form CT-W4CS, Request to Withhold Connecticut Income Tax from Civil Service Annuity
FOR FURTHER INFORMATION: To order forms and publications or for further information, call the Department of Revenue Services at 860-297-5962 (Hartford area or out-of-state) or 1-800-382-9463 (in-state). Forms and publications may be ordered through voice-mail 24 hours a day by choosing Option 3 on your touch tone telephone.
Electronic Delivery Options: You can also obtain tax forms and publications 24 hours a day from our site on the World Wide Web at http://www.ct.gov/drs. Telecommunications Device for the Deaf (TDD/TT) users only call 860-297-4911 during business hours.
Replaces: IP 91(1.3) issued 12/8/95