This Informational Publication has been superseded by IP 99(3)
INTRODUCTION: This publication is intended as a general guide to Connecticut taxes for individuals. While it does not answer every question about Connecticut taxes, it will provide answers to some of the most common inquiries.
For information on how to order forms or publications or to obtain assistance from our staff, follow the directions at the end of this document.
INCOME TAX: Connecticut income tax applies to Connecticut residents and part-year residents and to nonresidents who have income from Connecticut sources. Income that is taxable for federal purposes is, in general, also taxable for Connecticut income tax purposes. (To determine your residency status refer to the instructions contained in the Connecticut income tax instructions booklets.) The tax is computed on your Connecticut taxable income.
To compute your Connecticut taxable income, subtract your Connecticut personal exemption from your Connecticut adjusted gross income. If your Connecticut adjusted gross income is less than or equal to the maximum exemption amount for your filing status, you do not owe any Connecticut income tax.
Maximum personal exemption levels are:
- $12,000 - single filer (or married filing separate) with adjusted gross income up to $24,000.
- $19,000 - head of household with adjusted gross income up to $38,000.
- $24,000 - married filing jointly with adjusted gross income up to $48,000.
Exemptions are reduced by $1,000 for every additional $1,000 of adjusted gross income over the maximum exemption amounts.
Tax rate: The following chart explains the changes in the tax rate for taxable years 1997, 1998 and 1999. Please note: The change in the tax rate over the three year period will result in a decrease in your Connecticut income tax.
Credits: Personal tax credits of between 1% to 75% may also be available, depending upon income level. A nonrefundable property tax credit is also available to Connecticut residents for property taxes paid to a Connecticut political subdivision on their primary residence or privately owned or leased motor vehicle. To qualify for the credit, property taxes must first become due and be actually paid during the taxable year. The maximum credit allowed for the 1997 taxable year is $215 per return. The maximum credit increases to $285 per return for taxable years beginning in 1998 and thereafter. For further information, request IP 97(9), Q & A: Income Tax Credit for Property Taxes Paid to a Connecticut Political Subdivision.
Employers will withhold tax from the wages of residents and of nonresidents who work in Connecticut. If you expect to owe more than $500 in Connecticut income tax for the taxable year after tax credits, if any, are taken into account and after subtracting any Connecticut income tax withheld from your wages or pension, you should make estimated income tax payments.
Connecticut estimated payments are due at the same time as federal estimated payments: April 15, June 15, September 15, and January 15. For further information, request IP 92(5.7), Estimated Connecticut Income Taxes. The tax return is due on or before April 15 for the preceding calendar year.
ALTERNATIVE MINIMUM TAX: The Connecticut alternative minimum tax is a tax imposed on certain individuals, estates and trusts in addition to the regular Connecticut income tax. Taxpayers who are subject to and required to pay the federal alternative minimum tax are subject to the Connecticut alternative minimum tax. The Connecticut alternative minimum tax is the lesser of:
- 19% of your adjusted federal alternative minimum tax or
- 5% of the adjusted federal alternative minimum taxable income.
The tax must be reported on Form CT-6251, Connecticut Alternative Minimum Tax Return - Individual. Request IP 94(2.4), Q & A: The Connecticut Alternative Minimum Tax, for further information.
SUCCESSION TAX: The Connecticut succession tax is being phased out beginning in 1997 and is scheduled for total repeal effective in 2005. For a Connecticut resident, the tax applies to all property, except for real property and tangible personal property which is located outside Connecticut. For nonresidents, it applies only to real property and tangible personal property located in Connecticut. The tax rate depends on the relationship of the beneficiary to the decedent and the size of the estate. There is a total exemption from tax if the entire estate passes to a surviving spouse. For information and tax tables applicable to estates of decedents dying during 1997 and thereafter, request SN 95(18), 1995 Legislative Changes Affecting the Succession and Transfer Taxes and the Estate Tax.
ESTATE TAX: There is a "sponge" tax applied to resident and nonresident estates. For resident estates, the tax is that amount by which the federal credit allowed for state death taxes exceeds the total death taxes actually paid to all states. It is applicable only to very large estates, usually in excess of $3 million.
GIFT TAX: Gifts by resident and nonresident individual donors are subject to the Connecticut gift tax. In general, residents are taxed on all gifts of intangible property and of real property and tangible personal property located in Connecticut. Nonresidents are taxed on gifts of real and tangible personal property located in Connecticut. Gifts to any particular donee during the calendar year are not subject to the Connecticut gift tax unless the value of all such gifts to such donee during the calendar year exceeds $10,000. Request IP 94(1.1), A Guide to the Federal and Connecticut Gift Taxes, and Form CT-709, Connecticut Gift Tax Return.
PROPERTY TAX: Real estate and personal property are subject to this tax, with some statutory exemptions. It is levied by communities to fund local government. Neither the state nor its counties levy a property tax. For further information contact the assessor in the city or town where the property is located or write to the Intergovernmental Policy Division, Office of Policy and Management, 450 Capitol Avenue, Mail Stop 54 FOR, P.O. Box 341441, Hartford, CT 06134-1441.
All property is assessed at 70% of value at the time of the last municipal revaluation, except for motor vehicles which are assessed at 70% of average retail value and personal property which is assessed at 70% of the current market value.
October 1 is the assessment date for all municipalities. All owners of personal property, other than registered motor vehicles, must file a declaration with the assessor on or before November 1.
An annual property tax credit or rent rebate is available to persons who have reached the age of 65, provided they meet certain residence and income requirements. There is no age requirement for those who are 100% disabled. Qualified veterans or their surviving spouses are eligible for a varied, annual tax exemption on the assessed value of an owner-occupied dwelling or on a motor vehicle. Application for tax relief must be made at the local assessor's office.
REAL ESTATE CONVEYANCE TAX: There is a municipal conveyance tax imposed on deeds conveying real estate.
There is also a state conveyance tax imposed on deeds conveying real estate. The state tax rate on the consideration received for the real estate is as follows:
|Type of real estate||Rate|
|Residential property (other than residential dwelling)||0.5%|
|Nonresidential property (other than unimproved land)||1.0%|
|Residential dwelling (portion not exceeding $800,000)||0.5%|
|Residential dwelling (portion exceeding $800,000)||1.0%|
|Property conveyed by a delinquent mortgagor*||0.5%|
* If mortgage payments are more than six months delinquent and property is conveyed to a financial institution.
The state and municipal taxes are paid by those conveying the property. The grantor/seller must present a separate check to the Town Clerk, payable to the Commissioner of Revenue Services, in payment of the state tax when recording the deed. A taxpayer who transfers property for no consideration to his or her spouse or children is exempt from the real estate conveyance tax.
SALES AND USE TAXES: There is a 6% tax on the sale or rental of most goods and certain services. However, there are exemptions: food; all purchases made with food stamps; real property rentals; utility charges for residential property; household fuel; prescription drugs; certain nonprescription drugs; clothing under $50, materials for noncommercial sewing used to make clothing; newspaper and magazine subscriptions.
When sales tax is not collected by the seller of goods or provider of taxable services, a use tax is required. An individual must file a use tax return annually to report purchases of goods or services on which Connecticut sales tax was not paid. Typically, individuals who purchased goods from mail order or catalog companies and had the goods shipped to Connecticut and individuals who purchased goods at out-of-state locations and brought those goods back into Connecticut, are subject to Connecticut use tax if they did not pay Connecticut sales tax. The use tax must be paid on or before April 15 for purchases made during the prior calendar year and may be reported on the Connecticut income tax return. Use tax may also be reported on Form OP-186, Connecticut Individual Use Tax Return.
A room occupancy tax of 12% applies to the rental of rooms in a hotel or lodging house for 30 consecutive days or less.
MOTOR FUEL TAX: There is a state tax on all motor fuel used to propel highway vehicles. This tax is included in the per gallon purchase price as calculated at the metered pump. The tax rate is subject to change.
MOTOR VEHICLE FEES: There is a two year registration fee of $70 for passenger cars. Upon renewal, there is an additional $4 Clean Air Act fee for all classes of motor vehicles. Operator licenses are issued every four years for $35.50. For general information, contact the Connecticut Department of Motor Vehicles at 1-800-842-8222.
BOAT REGISTRATION FEES: There is an annual registration fee for boats in lieu of a local property tax. For information, contact the Department of Motor Vehicles at 1-800-842-8222.
ALCOHOLIC BEVERAGE AND CIGARETTE TAXES: Alcoholic beverage taxes are assessed as follows:
|per wine gallon|
|fortified and sparkling wines||$1.50|
Most alcoholic cider is taxed at the beer rate. For further information, request SN 97(6), 1997 Legislative Changes to the Alcoholic Beverages Tax Affecting Wines and Cider. The cigarette tax is 50¢ per pack of 20. Cigarettes are also subject to the 6% sales and use taxes. The tobacco products tax (excluding cigarettes) is 20% of the wholesale price.
ADMISSIONS, DUES AND CABARET TAX: A 10% tax is levied on dues and initiation fees of a social, athletic, or sporting club, which is either owned or operated by its members. A club shall be exempt from the dues tax if the annual dues of every member and any initiation fee are each $100 or less.
A 10% admissions tax applies to admission charges of $1 or more to places of amusement, entertainment or recreation. However, any production featuring live entertainment by actors or musicians at non-profit theaters and playhouses exempt under §501 of the Internal Revenue Code is exempt from the tax. Also, exempt from the tax are admission charges of $4.50 or less to motion picture shows and admission charges to carnivals and to amusement rides. A 5% cabaret tax generally applies to charges for food, drink, admissions, or merchandise where music, entertainment or dancing privileges are furnished in conjunction with the sale or serving of alcoholic beverages for profit. For further information, request IP 97(7), Q & A: The Cabaret 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 92(3.4) is modified and superseded by IP 92(3.5).
FOR FURTHER INFORMATION: If you have questions about Connecticut taxes, please call the Department of Revenue Services during business hours, Monday through Friday:
- 860-297-5962 (Hartford calling area or from out-of-state); or
- 1-800-382-9463 (toll-free from within Connecticut)
Telecommunications Device for the Deaf (TDD/TT) users only, please call 860-297-4911 during business hours.
FORMS AND PUBLICATIONS:
You may obtain forms and publications at any hour, seven days a week:
- Telephone: use the phone numbers listed above and select Option 3 from a touch-tone phone;
- Internet: preview and download forms from the DRS Web site: http://www.ct.gov/drs
Replaces: IP 92(3.4) (Issued 12/10/96)