LSN-100
This information is not current and is being provided for reference purposes only
Special Notice Concerning Changes Made By the 1989 General Assembly Affecting Capital Gains, Dividends and Interest Income Tax
The capital gains tax rate is still 7%. Beginning this year, however, your capital gains tax liability -100 will not exceed 5% of your adjusted gross income, as determined for federal income tax purposes.
The dividends and interest income tax rates have changed for most taxpayers.
|
IF YOUR CONNECTICUT ADJUSTED GROSS INCOME IS: |
YOUR DIVIDENDS AND INTEREST INCOME TAX RATE IS: |
||
|---|---|---|---|
|
at least |
but less than |
prior rate |
new rate |
|
$54,000 |
$56,000 |
1% |
1% (no change) |
|
$56,000 |
$58,000 |
1 |
2 |
|
$58,000 |
$60,000 |
2 |
3 |
|
$60,000 |
$62,000 |
2 |
4 |
|
$62,000 |
$66,000 |
3 |
5 |
|
$66,000 |
$70,000 |
4 |
6 |
|
$70,000 |
$74,000 |
5 |
7 |
|
$74,000 |
$78,000 |
6 |
8 |
|
$78,000 |
$82,000 |
7 |
9 |
|
$82,000 |
$86,000 |
8 |
10 |
|
$86,000 |
$90,000 |
9 |
11 |
|
$90,000 |
$100,000 |
11 |
13 |
|
$100,000 and over |
12 |
14 |
|
The filing requirements for married Connecticut residents have not changed. A husband and wife who file a joint Connecticut Capital Gains, Dividends and Interest Income Tax Return. A husband and wife who file separate federal income tax returns are still required to file separate Connecticut Capital Gains, Dividends and Interest Income Tax Returns.
|
TAX TYPE |
DUE DATE |
PAYMENT REQUIRED IF TAX ESTIMATED TO BE |
% OF TAX REQUIRED TO BE PAID |
TO AVOID INTEREST AND PENALTIES, PAYMENT MUST EQUAL: |
|
Capital Gains (Form 394ESA) |
7/15/89 |
$2,000 or more for period 1/1/89 through 5/31/89 |
100% of tax for period 1/1/89 through 5/31/89 |
1) 100% of 1989 tax for period 1/1/89 through 5/31/89
OR
2) 60% of 1988 tax, |
|
Dividends and Interest Income (Form 394ESA) |
7/15/89 |
more than $200 for calendar year 1989 |
50% of tax for calendar year 1989 |
1) 45% of tax for calendar year 1989
OR
2) 60% of 1988 tax (recomputed using 1989 tax rates) |
|
Capital Gains, Dividends and Interest Income (Form 394ESB) |
2/15/90 |
more than $2,000 for calendar year 1989 |
100% of tax for calendar year 1989 |
1) 90% of tax for calendar year 1989 OR
2) 100% of 1988 tax (recomputed using 1989 tax rates) |
REPEAL OF 60% NET CAPITAL GAIN DEDUCTION
The 60% net capital gain deduction can no longer be taken for capital gains recognized during the period beginning of February 9, 1989 and ending on December 31, 1989. However, for capital gains recognized during the period beginning on January 1, 1989 and ending on February 8, 1989, the 60% net capital gain deduction can still be taken. This deduction must be computed on Schedule 3 of Form 394.
For installment sales of capital assets, payments received during the period beginning on January 1, 1989 and ending on February 8, 1989 are eligible for the 60% net capital gain deduction. Payments received during the period beginning on February 9, 1989 and ending on December 31, 1989 are not eligible for the deduction.
Capital gain amounts received during the period beginning on January 1, 1989 and ending on February 8, 1989 by a partnership in which you are a partner are eligible for the 60% net capital gain deduction. Amounts received during the period beginning on February 9, 1989 and ending on December 31, 1989 are not eligible for the deduction. The same rules apply to amounts received by an S Corporation in which you are a shareholder or by a trust or estate in which you are a beneficiary.
LSN-100 (New 9/89)