State Tax Tips for Senior Citizens
This informational publication is designed to acquaint you with Connecticut state taxes and to indicate tax advantages that may be available to individuals age 55 or older. IP 92(4.1) has been updated to include changes in state taxes applicable to taxable years beginning on or after January 1, 1992.
STATE INCOME TAX: There is a state income tax that applies to Connecticut residents and to nonresidents who have income from Connecticut sources. For taxable years beginning on or after January 1, 1992, there will no longer be a separate tax on capital gains, dividends and interest income. The state income tax rate for 1992 and thereafter is 4.5% of taxable income. To compute your taxable income, subtract your personal exemption from your adjusted gross income. Maximum exemption amounts are:
$12,000 - single filers (or married filing separately) 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 credits of up to 75% are also available depending upon income level.
Income that is taxable for federal income tax purposes is, in general, also taxable for Connecticut income tax purposes. Types of income subject to Connecticut tax include, but are not limited to:
Lump sum distributions
Social Security benefits*
NOTE: The portion of Social Security benefits that is taxable for federal income tax purposes is also taxable for state income tax purposes. If your Social Security benefits are not subject to federal income tax, then your Social Security benefits are not subject to Connecticut income tax.
Certain income is not subject to 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. If a person, age 55 or older, elects the one-time federal exclusion of up to $125,000 in gain from the sale of a principal residence, the same amount of gain is also exempt from Connecticut income tax.
INCOME TAX FILING REQUIREMENTS:
Estimated Tax Returns: If you expect to owe more than $200 in Connecticut income tax for the entire year, after subtracting Connecticut income tax withheld from wages or pension income, you should be making estimated tax payments using Form CT-1040ES, Individual Estimated Income Tax Payment Coupon. The estimated payments are generally made in four installments: April 15, June 15, September 15 and January 15. (Fiscal Year Filers: follow federal filing dates.)
If you are receiving a pension, you may be able to have Connecticut income tax withheld from your pension payments. Contact your pension payer and ask for Form CT-W4P if you would like Connecticut income tax withheld from your payments. Civil service annuities should complete Form CT-W4CS, available from this Department, to initiate withholding from their civil service pension.
Tax Return: The Connecticut Income Tax Return is due by April 15 for the preceding taxable year.
SALES TAX: Although there are no direct exemptions from the sales tax for senior citizens, many items and services are not taxed.
Some examples of nontaxable items and services are:
Clothing, including shoes, overshoes, adult diapers, etc., when an item costs less than $50.
Prescription drugs, eyeglasses, dentures, hearing aids, and batteries.
Non-prescription (over-the-counter) drugs that are used internally. This includes: vitamins, minerals, food supplements, pain relievers, laxatives, cough syrups, lozenges, cold and allergy products, diabetic supplies, eye care products, nasal sprays, drops and inhalers, and antacids.
Oxygen and oxygen equipment, customized trusses and braces, crutches and wheelchairs.
Food purchased in supermarkets. (Beer, wine and all alcoholic beverages are taxable. Candy, gum, soda, carbonated water and non-alcoholic beer and wine are taxable unless purchased with food-stamps).
Fuel for heating residences such as oil, gas, kerosene, wood, electricity and coal.
Labor for many home repairs and services including plumbing, electrical, refuse removal, and septic cleaning services.
Yarn, fabric, thread, buttons, zippers, trim, etc., used to make clothing.
Meals delivered to homes of elderly persons, such as "Meals on Wheels".
Funeral costs of $2,500 or less.
Current United States and Connecticut flags.
Newspapers and magazines purchased by subscription.
Doctor, dentist, medical laboratory, lawyer and travel agent fees.
Instruction classes such as: knitting, sewing, dog obedience, music, etc.
A few examples of other nontaxable services are: animal grooming and boarding services, dry cleaning and laundromat, hair styling, towing, real estate and jewelry appraisal.
Discounts: When a senior citizen discount is offered, the sales tax is applied to the discounted price.
Coupons: If you must present a manufacturer's coupon to receive the discount, the coupon is considered to be money and you must pay tax on the original price.
Item $3.00 $3.00
Manufacturer's Coupon - 0.50 x 6%
Discounted Price $2.50 $0.18 Tax
However, when a store coupon is presented to that store, the tax is applied to the discounted price.
Item $3.00 $2.50
Store Coupon - 0.50 x 6%
Discounted Price $2.50 $0.15 Tax
The sale of "Dine Out" cards and "Entertainment" coupon books is not taxable. However, the free meals received by using such cards or coupons are subject to sales tax using the menu price that would have been paid if it had been purchased without the card or coupon.
SUCCESSION TAX: For a Connecticut resident, the succession tax applies to all property, except for real property and tangible personal property located outside Connecticut. For nonresidents, it applies only to real property and tangible personal property located in Connecticut. Rates are progressive, beginning at 4.29%.
Transfers to a surviving spouse are exempt. Therefore, if the entire estate passes to the spouse, there is no tax. The class composed of grandchildren, children, parents and grandparents receives a $50,000 exemption. Brothers, sisters, and their descendants receive a $6,000 exemption. All other persons or taxable organizations have a $1,000 exemption. There is only one exemption per class. In other words, if there is one child, there is one $50,000 exemption. If there are five children, there is still only one $50,000 exemption. Transfers to qualifying charitable, religious, educational, historical, or scientific organizations are tax exempt.
GIFT TAX: In general, gifts made on or after September 1, 1991 by resident and nonresident individuals are subject to the Connecticut gift tax. Residents are taxed on all gifts of intangible property and of real property and tangible personal property situated in Connecticut. Nonresidents are taxed on gifts of real and tangible personal property situated in Connecticut and intangible personal property situated in Connecticut if employed in carrying on a trade or business in Connecticut. In general, gifts made to a particular donee are not subject to the Connecticut gift tax unless the value of all such gifts to any particular donee during the calendar year exceeds $10,000. For further information concerning the gift tax you may request a copy of Special Notice 92(1) and 92(18).
REAL ESTATE CONVEYANCE TAX: A state real estate conveyance tax is imposed on the consideration of the interest in realty conveyed by deed. A taxpayer who transfers property, for no consideration, to his or her spouse or children is exempt from this tax. A taxpayer receiving Elderly Property Tax benefits is also exempt.
LOCAL PROPERTY TAXES:
Homeowner/Renter Tax Credit: Annual property tax or rent credit is available to residents, age 65 or older, or to a surviving spouse of a previously approved applicant who is age 50 or older.
Veteran Exemption: A varied, annual tax exemption on the assessed value of an owner-occupied dwelling or on a motor vehicle is available to any qualified veteran or surviving spouse.
Contact the local assessor in your town or city hall for details and forms for any of the above.
EFFECT ON OTHER DOCUMENTS: IP 92(4) is superseded by IP 92(4.1). IP 92(4) may not be relied upon after the date of issuance of IP 92(4.1).
FOR FURTHER INFORMATION: Please call the Department of Revenue Services Research Unit during business hours, Monday through Friday:
- 1-800-382-9463 (in-state), or
- 860-297-5687 (anywhere)
- TTY, TDD and Text Telephone users only may transmit inquiries 24 hours a day, seven days a week by calling 860-297-4911.
FORMS AND PUBLICATIONS: Forms and publications are available 24 hours a day, seven days a week:
- Internet: preview and download forms and publications from the DRS web site: http://www.ct.gov/drs
- Telephone: Call 1-800-382-9463 (in-state), or 860-297-5687 (anywhere).
Replaces: IP 92(4), Issued 3/92