State Tax Tips for Senior Citizens
This Informational Publication has been modified and superseded by IP 92(4.4)
INCOME TAX: There is a Connecticut income tax that applies to Connecticut residents and to nonresidents who have income from Connecticut sources. For taxable years beginning January 1, 1997, and thereafter the Connecticut income tax rate is 3% of Connecticut taxable income that is less than or equal to $4,500 (single or married filing separately), $7,000 (head of household), or $9,000 (married, filing jointly or qualifying widow(er)). Connecticut taxable income in excess of these amounts is taxed at 4.5%.
To compute your Connecticut taxable income, subtract your personal exemption from your Connecticut 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.
Personal tax credits of between 1% and 75% may also be available depending upon income level. For taxable years beginning on or after January 1, 1996, residents who paid property taxes on their primary residence or privately-owned motor vehicles to a Connecticut political subdivision will be allowed a tax credit of not more than $100 against their Connecticut income tax liability.
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 income tax include, but are not limited to:
- Capital Gains
- Lump sum distributions
- Social Security benefits*
* If your social security benefits are not subject to federal income tax, they are, likewise, not subject to Connecticut income tax. However, if you receive social security benefits that are taxable for federal income tax purposes, you may be able to reduce the portion of those benefits that are taxable for Connecticut income tax purposes. Connecticut income taxation of social security benefits is limited to 50% of benefits received, even if a greater percentage of the benefits is taxable for federal income tax purposes.
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 income tax 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. Nonresidents of Connecticut are not subject to tax on income from pension plans even if the individual was previously a Connecticut resident or a nonresident who was employed in Connecticut.
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.
If you are a resident who is 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, Withholding Certificate for Pension or Annuity Payments, if you would like Connecticut income tax withheld from your payments. Retired federal civil service employees should complete Form CT-W4CS, Request to Withhold Income Tax From Civil Service Annuity, available from the DRS Forms Unit, to initiate withholding from their civil service annuities.
Income Tax Return: The Connecticut income tax return for calendar year filers is due on or before April 15 for the preceding taxable year. You may be required to file an income tax return even if you do not owe any tax. Information on filing requirements is included in all Connecticut income tax instruction booklets.
SALES TAX: Although there are no special exemptions from the sales tax for senior citizens, many items and services are not subject to the sales or use tax.
Some examples of nontaxable items and services are:
clothing, including but not limited to, shoes, overshoes, adult diapers, disposable pads for incontinency, when an item costs less than $50;
- current United States and Connecticut flags;
- diabetic supplies (test strips and tablets, lancets and glucose monitoring equipment);
- doctor, dentist, medical laboratory, lawyer and travel agent fees;
- electricity for residential use;
- eyeglasses, dentures, hearing aids, and hearing aid batteries;
- fabric, yarn, thread, buttons, zippers, trim, and similar materials, for noncommercial sewing used to make clothing;
- 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 residential heating or cooking such as oil, gas, kerosene, wood, electricity, coal and charcoal;
- instruction classes, such as knitting, sewing, dog obedience, music, dance etc;
- labor for many home repairs and services including plumbing, electrical, refuse removal, and septic cleaning services. However, the following renovation services are subject to sales or use tax: painting, paving, staining, roofing, wallpapering, siding, and exterior sheet metal work;
- landscaping and horticultural services, window cleaning, and maintenance services when rendered at the residence of a person eligible in accordance with federal regulations to receive total disability benefits under the Social Security Act;
- meals provided by special programs that are delivered to homes of elderly persons, such as "Meals on Wheels"; newspapers and magazines purchased by subscription; 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, eye care products, nasal sprays, drops and inhalers, and antacids;
- other nontaxable services, including animal grooming and boarding services, laundromat, hair styling, health and athletic services, towing, real estate and jewelry appraisal;
- oxygen and oxygen equipment, customized trusses and braces, crutches and wheelchairs;
- personal property used in a burial or cremation with a value of up to $2,500; prescription drugs, syringes and needles;
- repair services to artificial limbs, artificial eyes and other equipment used to support vital life function;
- repair services to crutches, walkers and wheelchairs.
Discounts: When a senior citizen discount or other discount is offered on a taxable item, 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 #1 $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 #2 $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: 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 for 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, from the DRS Forms Unit.
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 situated 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.
REAL ESTATE CONVEYANCE TAX: A state real estate conveyance tax is imposed on deeds conveying an interest in realty. A taxpayer who transfers property for no consideration to his or her spouse or children is exempt from this tax. A taxpayer receiving property tax benefits for the elderly 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 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(4.2) is modified and superseded by IP 92(4.3). IP 92(4.2) may not be relied upon after the date of issuance of IP 92(4.3).
RELATED FORMS AND PUBLICATIONS:
IP 92(3.4) Personal Taxes
IP 91(1.4) Connecticut Income Tax: Supplemental Information for Senior Citizens
IP 92(5.6) Estimated Connecticut Income Taxes
IP 94(1) A Guide to Federal and Connecticut Gift Taxes
SN 95(18) 1995 Legislative Changes Affecting the Succession and Transfer Taxes and the Estate Taxes
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(4.2), Issued 1/3/95