Connecticut

Connecticut income tax: 2% to 6.99% graduated, effectively flat 6.99% above CT AGI $1,080,000

“Married Filing Jointly/Qualifying Surviving Spouse ... Less than or equal to: $20,000 2.00% ... More than $1,000,000 $62,500 plus 6.99% of the excess over $1,000,000 ... Table D - Tax Recapture ... Use the filing status shown on the front of your Connecticut income tax return and your Connecticut AGI (Tax Calculation Schedule, Line 1) to determine your recapture amount.”

Note: Quoted from the CT-1040 TY2025 Table B bracket schedule and Table D recapture instructions. The personal exemption ($24,000 MFJ) phases to $0 above $48,000 MFJ CT AGI. The Table C 2% add-back phase-out starts at $100,500 MFJ; cap $500. Above ~$1.08M CT AGI, tax = 6.99% × all taxable income (same recapture shape as NY). The MFJ schedule is exactly double the single/MFS schedule. No capital gains preference.

IRC §1212(b): capital losses carry forward only for non-corporate taxpayers; no carryback

“In the case of a taxpayer other than a corporation, if there is a net capital loss for any taxable year: (1) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and (2) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year.”

Note: IRC §1212(b) limits non-corporate taxpayers to carrying losses forward only ('succeeding taxable year'). IRC §1212(a), which allows a 3-year carryback, applies only to corporations. For conformity states, the federal carryforward amount flows to the state return unchanged.

CT exempts CT muni bonds; out-of-state muni bond interest added back per Conn. Gen. Stat. §12-701(a)(20)

“Enter the total amount of interest income derived from state and municipal government obligations (other than obligations of the State of Connecticut or its municipalities) which is not taxed for federal income tax purposes.”

Note: Conn. Gen. Stat. §12-701(a)(20) (2025 CT-1040 Schedule 1 Line 31). CT-issued bonds are excluded from the add-back; all other state/local muni interest is added to CT income.

CT exempts CT muni bonds; out-of-state muni bond interest added back per Conn. Gen. Stat. §12-701(a)(20)

“Enter the total amount of interest income derived from state and municipal government obligations (other than obligations of the State of Connecticut or its municipalities) which is not taxed for federal income tax purposes.”

Note: Conn. Gen. Stat. §12-701(a)(20) (2025 CT-1040 Schedule 1 Line 31). CT-issued bonds are excluded from the add-back; all other state/local muni interest is added to CT income.

Connecticut conforms to IRC §1400Z-2 QOZ gain deferral and exclusion

“Connecticut taxable income of a resident trust or estate means federal taxable income of such trust or estate, as determined for federal income tax purposes under the Internal Revenue Code, with the modifications provided in this chapter.”

Note: URL resolves to the Chapter 229 table of contents; §12-701 is within this chapter. Connecticut has rolling IRC conformity (Conn. Gen. Stat. §12-701) and no Schedule 1 addback for §1400Z-2. No CT DRS ruling explicitly names §1400Z-2, so conformity is inferred from the absence of a decoupling provision. Quote is verbatim from §12-701; editorial commentary removed from quote field.

Connecticut conforms to IRC §1202 QSBS gain exclusion via rolling IRC conformity

“Connecticut taxable income of a resident trust or estate means federal taxable income of such trust or estate, as determined for federal income tax purposes under the Internal Revenue Code, with the modifications provided in this chapter.”

Note: URL resolves to the Chapter 229 table of contents; §12-701 is within this chapter. Connecticut has rolling IRC conformity (Conn. Gen. Stat. §12-701) and no addback for §1202. Conformity inferred from absence of decoupling; no CT DRS ruling explicitly names §1202. Quote is verbatim from §12-701; editorial commentary removed from quote field.

CT PS 2005(2) List C: FNMA and FHLMC are taxable Connecticut income; no modification to CT AGI required

“C.3. Federal Home Loan Mortgage Corporation (Freddie Mac) - Mortgages, certificates, and other securities guaranteed by the Federal Home Loan Mortgage Corporation (12 U.S.C. §1452(e)); C.4. Federal National Mortgage Association (Fannie Mae) - Participation certificates and other obligations guaranteed by the Federal National Mortgage Association (12 U.S.C. §1719(d))”

Note: Connecticut DRS Policy Statement PS 2005(2) explicitly lists FNMA and FHLMC on List C as taxable obligations (the interest from which is includable in federal gross income, therefore no addition is made to federal adjusted gross income in computing Connecticut adjusted gross income). List A (exempt, including FHLB/FFCB) is explicitly distinguished from List C (taxable), establishing that GSE interest is fully taxable Connecticut income.

Connecticut income tax: 2% to 6.99% graduated, effectively flat 6.99% above CT AGI $1,080,000

“Married Filing Jointly/Qualifying Surviving Spouse ... Less than or equal to: $20,000 2.00% ... More than $1,000,000 $62,500 plus 6.99% of the excess over $1,000,000 ... Table D - Tax Recapture ... Use the filing status shown on the front of your Connecticut income tax return and your Connecticut AGI (Tax Calculation Schedule, Line 1) to determine your recapture amount.”

Note: Quoted from the CT-1040 TY2025 Table B bracket schedule and Table D recapture instructions. The personal exemption ($24,000 MFJ) phases to $0 above $48,000 MFJ CT AGI. The Table C 2% add-back phase-out starts at $100,500 MFJ; cap $500. Above ~$1.08M CT AGI, tax = 6.99% × all taxable income (same recapture shape as NY). The MFJ schedule is exactly double the single/MFS schedule. No capital gains preference.

U.S. Treasury interest exempt from Connecticut income tax: 31 U.S.C. §3124(a) prohibits state taxation of U.S. government obligations

“Stocks and obligations of the United States Government are exempt from taxation by a State or political subdivision of a State. The exemption applies to each form of taxation that would require the obligation, the interest on the obligation, or both, to be considered in computing a tax.”

Note: 31 U.S.C. §3124(a) preempts state income taxation of U.S. government obligations. Covers T-bills, T-notes, T-bonds, TIPS, and I-bonds. Most states allow a deduction or subtraction by statute cross-referencing this federal preemption.

FHLB and FFCB bond interest exempt from Connecticut income tax: federal enabling statutes mandate state tax exemption

“Any security issued under this chapter by a Federal home loan bank, including the stock thereof, shall be exempt from taxation, except taxes upon real estate, by any State, county, municipality, or local taxing authority.”

Note: 12 U.S.C. §1433 (FHLB) and 12 U.S.C. §2023 (FFCB/Farm Credit Act) both mandate state tax exemption for securities issued under their chapters. Contrasts with FNMA (12 U.S.C. §§1719(e), 1723a(c)) and FHLMC (12 U.S.C. §1455(a)) which have no bondholder exemption statute and whose interest is taxable by income-tax states.

Farm Credit Act: notes, bonds, debentures, and other obligations of Farm Credit Banks are instrumentalities of the United States exempt from all State, municipal, and local taxation

“The mortgages held by the Farm Credit Banks and the notes, bonds, debentures, and other obligations issued by the banks shall be considered and held to be instrumentalities of the United States and, as such, they and the income therefrom shall be exempt from all Federal, State, municipal, and local taxation, other than Federal income tax liability of the holder thereof under the Public Debt Act of 1941 (31 U.S.C. 3124).”

Note: 12 U.S.C. §2023 explicitly covers 'the income therefrom' (i.e., interest payments to bondholders), exempting it from all State and local taxation. The only carve-out is federal income tax on the holder. Parallel to 12 U.S.C. §1433 (FHLB Act), which exempts FHLB securities from state taxation. Together §1433 and §2023 mandate state and local tax exemption for both FHLB and FFCB bond interest. Shared across all jurisdictions: a single object reference satisfies buildCitationIndex() identity check.

IRC §1212(b): capital losses carry forward only for non-corporate taxpayers; no carryback

“In the case of a taxpayer other than a corporation, if there is a net capital loss for any taxable year: (1) the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss in the succeeding taxable year, and (2) the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss in the succeeding taxable year.”

Note: IRC §1212(b) limits non-corporate taxpayers to carrying losses forward only ('succeeding taxable year'). IRC §1212(a), which allows a 3-year carryback, applies only to corporations. For conformity states, the federal carryforward amount flows to the state return unchanged.

Connecticut income tax: 2% to 6.99% graduated, effectively flat 6.99% above CT AGI $1,080,000

“Married Filing Jointly/Qualifying Surviving Spouse ... Less than or equal to: $20,000 2.00% ... More than $1,000,000 $62,500 plus 6.99% of the excess over $1,000,000 ... Table D - Tax Recapture ... Use the filing status shown on the front of your Connecticut income tax return and your Connecticut AGI (Tax Calculation Schedule, Line 1) to determine your recapture amount.”

Note: Quoted from the CT-1040 TY2025 Table B bracket schedule and Table D recapture instructions. The personal exemption ($24,000 MFJ) phases to $0 above $48,000 MFJ CT AGI. The Table C 2% add-back phase-out starts at $100,500 MFJ; cap $500. Above ~$1.08M CT AGI, tax = 6.99% × all taxable income (same recapture shape as NY). The MFJ schedule is exactly double the single/MFS schedule. No capital gains preference.

Connecticut estate tax: 12% flat rate on taxable estate; $13,990,000 exemption for TY2025

“For estates of decedents dying during 2025, the Connecticut estate tax exemption amount is $13.99 million.”

Note: 12% flat rate applies to CT taxable estate above the exemption, which tracks the federal basic exclusion amount. Total CT gift + estate tax capped at $15,000,000 per Conn. Gen. Stat. § 12-391 (DRS: 'the aggregate amount of Connecticut gift and estate tax payable shall not exceed $15 million'; the cap's subsection placement is unverified because cga.ct.gov blocks fetch).

Connecticut estate tax: 12% flat rate on taxable estate; $13,990,000 exemption for TY2025

“For estates of decedents dying during 2025, the Connecticut estate tax exemption amount is $13.99 million.”

Note: 12% flat rate applies to CT taxable estate above the exemption, which tracks the federal basic exclusion amount. Total CT gift + estate tax capped at $15,000,000 per Conn. Gen. Stat. § 12-391 (DRS: 'the aggregate amount of Connecticut gift and estate tax payable shall not exceed $15 million'; the cap's subsection placement is unverified because cga.ct.gov blocks fetch).

Connecticut estate tax exemption $15,000,000 for deaths during 2026

“For estates of decedents dying during 2026, the Connecticut estate tax exemption amount is $15 million.”

Note: CT tracks the federal basic exclusion amount, so the OBBBA $15,000,000 flows through for 2026. The same DRS page confirms the aggregate CT gift and estate tax payable cap: 'For calendar years beginning on or after January 1, 2019, the aggregate amount of Connecticut gift and estate tax payable shall not exceed $15 million.'

Connecticut income tax: MFJ bracket thresholds double Single thresholds at every bracket boundary (marriage neutral)

“Single: not over $10,000: 2.00%; over $10,000 to $50,000: $200 plus 4.5%; over $50,000 to $100,000: $2,000 plus 5.5%.”

Note: Quote is from the Single filer portion of Table B. Corresponding MFJ rows: not over $20,000: 2.00%; over $20,000 to $100,000: $400 plus 4.5%; over $100,000 to $200,000: $4,000 plus 5.5%. Every MFJ bracket threshold is exactly 2x the corresponding Single threshold: $10K/$20K, $50K/$100K, $100K/$200K, $200K/$400K, $250K/$500K, $500K/$1M. Same marginal rates at each doubled boundary. Produces marriage-neutral treatment on all graduated brackets.

Connecticut adopted UDCPRDA (Uniform Disposition of Community Property Rights at Death Act) in 1985

“Sections 45a-458 to 45a-466, inclusive, may be cited as the 'Connecticut Uniform Disposition of Community Property Rights at Death Act.'”

Note: Connecticut enacted UDCPRDA in 1985 (P.A. 85-340; 1971 original uniform act). Protects community property character of assets acquired in CP states when a couple moves to Connecticut.

Connecticut allows a part-year resident's capital-loss carryforward only to the extent includible in computing federal adjusted gross income

“effect shall be given in any subsequent year to any capital loss carryforward or suspended passive activity loss computed on the Connecticut income tax return for the period subsequent to the change of residence only to the extent such capital loss carryforward or suspended passive activity loss is includible in computing federal adjusted gross income.”

Note: Conn. Agencies Regs. §12-717-1 allows a part-year resident's capital-loss carryforward only to the extent it is includible in computing federal adjusted gross income, so the imported federal section 1212 carryforward flows through to Connecticut. Verbatim text verified live 2026-06-30 against Conn. Agencies Regs. §12-717-1.

Connecticut PE Tax is elective (annual, irrevocable) for taxable years commencing on or after January 1, 2024; it was mandatory 2018-2023

“Legislation makes the pass-through entity tax optional. The election is made annually and is irrevocable. Starting with taxable years commencing on and after January 1, 2024, any entity that elects to pay such tax must give the Commissioner of Revenue Services written notice for each tax year it makes the election”

Note: Connecticut's PE Tax was MANDATORY for 2018-2023 (the original 2018 SALT-cap response); PA 23-204 made it an annual irrevocable election from TY2024.

Connecticut Pass-Through Entity Tax (PE Tax) rate is 6.99%

“Line 2: PE Tax due. Multiply Line 1 by 6.99%.”

Note: SALT-cap workaround: the PE Tax rate matches Connecticut's top individual rate (6.99%). Cited from the 2024 Form CT-PET instructions; the cga.ct.gov statute site was unreachable (TLS failure) during verification, so confidence is medium.

Connecticut PE Tax credit is 87.5% of the member's share of the tax paid (a partial credit)

“Column I: PE Tax Credit. Multiply Column H by 87.5% (.875).”

Note: The 87.5% haircut means 12.5% of the entity-level tax is never recovered by the member: Connecticut's PE Tax credit is partial, unlike the full-credit PTETs (CA, IL, NY).