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Connecticut Taxes: What You Need to Know
The Connecticut tax system aims to improve individual financial management and ensure compliance with the tax code.
Federal, State, and Local Tax Withholding
These taxes are taken from your paycheck to fund government operations. Federal taxes include income tax, while state and local taxes vary depending on where you live in Connecticut. These withholdings are based on your earnings and the details you provide on your W-4 form.
FICA & State Insurance Taxes
FICA taxes cover Social Security and Medicare, which support retirement, disability, and healthcare benefits. Connecticut also has state-specific insurance taxes, like unemployment insurance, which helps those temporarily out of work.
Pre-Tax Deductions
These are taken from your gross pay before taxes, lowering your taxable income. They include contributions to retirement plans like 401(k) (employee contribution limit raised to $24,500 in 2026), health insurance premiums, and other benefits like flexible spending accounts (FSAs) and health savings accounts (HSAs).
Here is a table with the tax type and percentage information:
| Tax Type | Percentage |
|---|---|
| Federal Income Tax | Varies based on income and filing status |
| Connecticut State Income Tax | 2.00% – 6.99% |
| Local Taxes | Varies by locality |
| Social Security (FICA) | 6.20% |
| Medicare (FICA) | 1.45% |
| Additional Medicare Tax | 0.9% on wages above $200,000 ($250,000 for joint filers) |
| Social Security Wage Base | $184,500 (increased from $176,100 in 2025) |
| State Unemployment Insurance | Varies |
| Pre-Tax Deductions (e.g., 401k) | Varies based on individual elections |
Median Household Income in Connecticut
Connecticut’s median household income is $95,781 as of the latest 2024 inflation-adjusted data from the U.S. Census Bureau American Community Survey — up from $92,240 reported in the prior period. The average household income in the state stands at $138,744, which is 22% above the national average. Connecticut’s per capita income is $60,274.
Source: https://fred.stlouisfed.org/series/MEHOINUSCTA646N
Connecticut Tax Brackets 2025 (Filed in 2026)
Connecticut’s income tax uses a progressive seven-bracket system with rates ranging from 2% to 6.99%. The reduced bottom rates introduced in Tax Year 2024 – the largest income tax cut in Connecticut history remain in effect for 2025 returns filed in 2026.
The tax relief introduced in 2024 remains capped at $150,000 for single filers and $300,000 for joint filers. The two lowest rates continue to apply as follows:
- The 2% rate applies to the first $10,000 earned by single filers and the first $20,000 by joint filers.
- The 4.5% rate applies to the next $40,000 earned by single filers and the next $80,000 by joint filers.
| Filing Status | Taxable Income | Tax Rate |
|---|---|---|
| Single Filers | $0 – $10,000 | 2% |
| $10,000.01 – $50,000 | 4.5% | |
| $50,000.01 – $100,000 | 5.5% | |
| $100,000.01 – $200,000 | 6% | |
| $200,000.01 – $250,000 | 6.5% | |
| $250,000.01 – $500,000 | 6.9% | |
| $500,000.01 and above | 6.99% | |
| Married Filing Jointly | $0 – $20,000 | 2% |
| $20,000.01 – $100,000 | 4.5% | |
| $100,000.01 – $200,000 | 5.5% | |
| $200,000.01 – $400,000 | 6% | |
| $400,000.01 – $500,000 | 6.5% | |
| $500,000.01 – $1,000,000 | 6.9% | |
| $1,000,000.01 and above | 6.99% |
Source: https://www.cga.ct.gov/2025/rpt/pdf/2025-R-0080.pdf
Federal Tax Context for 2026
For 2026, the federal standard deduction has increased to $16,100 for single filers and married individuals filing separately, $32,200 for married couples filing jointly, and $24,150 for heads of household. These increases were enacted under the One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025.
The federal SALT (State and Local Tax) deduction cap remains at $10,000, which continues to limit the benefit of deducting Connecticut state income taxes for higher earners who itemize on their federal return. For taxpayers taking the standard deduction, no deduction of Connecticut’s state income taxes is available. This means Connecticut’s tax burden can feel heavier for residents in higher income brackets who are subject to the state’s top marginal rates and cannot fully offset these against their federal taxes.
Connecticut does not impose local income taxes, so residents are not subject to any additional municipal income tax withholding.
Social Security & Connecticut Retirement Income (2026)
Connecticut technically taxes Social Security benefits, but many residents will not owe state tax on them. For 2026:
- Single filers and married filing separately with AGI below $75,000 pay no Connecticut state tax on Social Security benefits.
- Married filing jointly and head of household filers with AGI below $100,000 pay no Connecticut state tax on Social Security benefits.
- For taxpayers above these thresholds, no more than 25% of Social Security benefits are subject to Connecticut income tax.
Connecticut also fully exempts pension and annuity income from state income tax for taxpayers with federal AGI below $75,000 (single) or $100,000 (joint filers). This exemption phases out and is eliminated for those with AGI above $100,000 (single) or $150,000 (joint filers).
Wrapping up
Connecticut sits on the higher end of state income taxes, with rates ranging from 2% up to 6.99% across seven brackets. The good news is that 2024 brought the largest income tax cut in state history, and those lower bottom rates are still in effect. There are no local income taxes, keeping things simpler. One thing worth noting for retirees: Social Security and pension income get favorable treatment for moderate earners, with exemptions kicking in below certain income thresholds.
