Does Connecticut Tax Social Security and Retirement Income?

Social Security is exempt below $75,000 or $100,000 of federal AGI, and at most 25% taxable above

Connecticut starts its return from federal adjusted gross income, which already contains the part of Social Security that is taxable federally, and then subtracts some or all of it. For 2026 a single filer or married person filing separately with federal AGI under $75,000 subtracts the entire federally taxable amount. The line is $100,000 for married couples filing jointly, qualifying surviving spouses and heads of household. Below those figures no Social Security is taxed by Connecticut. (Form CT-1040ES (2026), Estimated Connecticut Income Tax Payment Coupon for Individuals: 2026 tax calculation schedule and Tables A to E, Social Security Benefit Adjustment Worksheet, Pension and Annuity Worksheet)

At or above the threshold the Social Security Benefit Adjustment Worksheet applies. It takes the lesser of total benefits or the amount by which income plus half of benefits exceeds the federal base amount, multiplies that by 25%, and treats only that much as taxable. The rest of the federally taxable benefit is subtracted. The federal return can tax up to 85% of benefits, so a household over the line still has most of its benefit excluded: the example couple with $55,000 of benefits has $46,750 taxed federally and $13,750 taxed by Connecticut. (Form CT-1040ES (2026), Estimated Connecticut Income Tax Payment Coupon for Individuals: 2026 tax calculation schedule and Tables A to E, Social Security Benefit Adjustment Worksheet, Pension and Annuity Worksheet)

On the return the subtraction is entered on Schedule 1, line 41. Tier 1 and Tier 2 Railroad Retirement benefits and supplemental annuities are subtracted in full on line 43, whatever the income, to the extent they were not already removed on line 41. (Form CT-1040 (2025), Connecticut Resident Income Tax Return Instructions: Schedule 1 subtractions and Schedule 3 property tax credit)

The federal government is a separate matter. Up to 85% of a benefit can be taxed on a federal return once other income passes fixed thresholds, wherever you live. Our taxable Social Security calculator shows how much of yours is counted.

Pensions are fully deductible under the income thresholds, partly deductible in a band above them

Connecticut allows a subtraction for pension and annuity income on Schedule 1, line 48b. It covers distributions from defined benefit plans and from 401(k), 403(b) and 457(b) plans, private or public, and there is no age test. A single filer, married person filing separately or head of household with federal AGI under $75,000 deducts 100% of the taxable pension; a married couple filing jointly does so with federal AGI under $100,000. (Form CT-1040ES (2026), Estimated Connecticut Income Tax Payment Coupon for Individuals: 2026 tax calculation schedule and Tables A to E, Social Security Benefit Adjustment Worksheet, Pension and Annuity Worksheet)

Above those lines the deduction steps down through a table. For joint filers it is 85% from $100,000 to $104,999, 70% to $109,999, 55% to $114,999, 40% to $119,999, 25% to $124,999, 10% to $129,999, 5% to $139,999, 2.5% to $149,999 and nothing from $150,000. Single filers pass through the same percentages between $75,000 and $99,999 and get nothing from $100,000. The test is federal AGI, which includes the taxable part of Social Security, capital gains and the pension itself. (Form CT-1040ES (2026), Estimated Connecticut Income Tax Payment Coupon for Individuals: 2026 tax calculation schedule and Tables A to E, Social Security Benefit Adjustment Worksheet, Pension and Annuity Worksheet)

Military retirement pay is subtracted in full on line 44 at any income. That covers retired members of the armed forces and National Guard and beneficiaries receiving survivor benefits under an option the retiree elected. Payments to a former spouse under a divorce decree do not qualify. (Form CT-1040 (2025), Connecticut Resident Income Tax Return Instructions: Schedule 1 subtractions and Schedule 3 property tax credit)

Retired Connecticut teachers can subtract 50% of income from the Teachers’ Retirement System on line 45 with no income limit. A teacher whose federal AGI is under the threshold can use the general pension deduction instead and subtract 100%, but the same income cannot be deducted twice. A survivor or beneficiary reporting a pension claims the deduction on the same terms as the original participant. (Form CT-1040 (2025), Connecticut Resident Income Tax Return Instructions: Schedule 1 subtractions and Schedule 3 property tax credit)

IRA withdrawals are 100% deductible under the thresholds from 2026, with the same phase-out

Distributions from an IRA other than a Roth IRA share the pension deduction, and 2026 is the first year the IRA share is counted at 100%. The 2026 Pension and Annuity Worksheet adds 100% of the taxable IRA amount on federal Form 1040, line 4b, to the taxable pensions on line 5b and multiplies the total by the phase-out decimal. A couple under $100,000 of federal AGI, or a single filer under $75,000, therefore pays no Connecticut tax on traditional IRA withdrawals. (Form CT-1040ES (2026), Estimated Connecticut Income Tax Payment Coupon for Individuals: 2026 tax calculation schedule and Tables A to E, Social Security Benefit Adjustment Worksheet, Pension and Annuity Worksheet)

The deduction was phased in. On the 2025 return, filed in early 2026, only 75% of the taxable IRA distribution counted, so a retiree comparing a 2025 Connecticut return with a 2026 estimate will see a larger subtraction for the same withdrawal. Qualified Roth IRA distributions are not in federal income and need no deduction. (Form CT-1040 (2025), Connecticut Resident Income Tax Return Instructions: Schedule 1 subtractions and Schedule 3 property tax credit)

A Roth conversion is taxed in the year it is made, because Connecticut begins with federal AGI. Its taxable amount is reported with other IRA distributions on the federal return, so the worksheet treats it like a withdrawal: fully deductible if federal AGI ends the year under the threshold, partly deductible in the phase-out band, and fully taxed at $100,000 (single) or $150,000 (joint). The conversion itself counts toward federal AGI, so a large one can remove the deduction for the pension and the exemption for Social Security in the same year. (Form CT-1040ES (2026), Estimated Connecticut Income Tax Payment Coupon for Individuals: 2026 tax calculation schedule and Tables A to E, Social Security Benefit Adjustment Worksheet, Pension and Annuity Worksheet)

To size a conversion against federal brackets and Medicare surcharges, see the Roth conversion calculator; for required withdrawals, the RMD calculator.

Interest, dividends and capital gains are taxed at ordinary rates

The Connecticut tax calculation applies one rate schedule to Connecticut taxable income. Long-term capital gains and qualified dividends, which are in federal AGI, pass through to that schedule and are taxed at the same 2% to 6.99% rates as a pension. They also count toward the federal AGI thresholds that control the Social Security and pension subtractions. (Form CT-1040ES (2026), Estimated Connecticut Income Tax Payment Coupon for Individuals: 2026 tax calculation schedule and Tables A to E, Social Security Benefit Adjustment Worksheet, Pension and Annuity Worksheet)

Interest on U.S. Treasury bills, notes, bonds and savings bonds is subtracted on Schedule 1, line 39, and dividends from a mutual fund holding at least 50% of its assets in U.S. obligations are partly subtracted on line 40. Interest from Fannie Mae, Ginnie Mae and Freddie Mac securities stays taxable. Interest on bonds of other states and their municipalities, tax-free federally, is added back on line 31; Connecticut state and municipal bond interest is not. (Form CT-1040 (2025), Connecticut Resident Income Tax Return Instructions: Schedule 1 subtractions and Schedule 3 property tax credit)

For 2026 single filers pay 2% on the first $10,000 of Connecticut taxable income, 4.5% to $50,000, 5.5% to $100,000, 6% to $200,000, 6.5% to $250,000, 6.9% to $500,000 and 6.99% above. For joint filers every bracket edge is doubled: 2% to $20,000, 4.5% to $100,000, 5.5% to $200,000, 6% to $400,000, 6.5% to $500,000, 6.9% to $1 million and 6.99% above. (Form CT-1040ES (2026), Estimated Connecticut Income Tax Payment Coupon for Individuals: 2026 tax calculation schedule and Tables A to E, Social Security Benefit Adjustment Worksheet, Pension and Annuity Worksheet)

There is no standard deduction and no extra amount for age 65. The personal exemption does that job, and it disappears as income rises. A single filer gets $15,000 with Connecticut AGI up to $30,000, losing $1,000 for each $1,000 above that until nothing is left over $44,000. A couple filing jointly gets $24,000 up to $48,000 and nothing over $71,000. A personal tax credit then removes 75% of the tax at the lowest incomes and tapers to 1%, ending above $64,500 of Connecticut AGI for single filers and $100,500 for joint filers. (Form CT-1040ES (2026), Estimated Connecticut Income Tax Payment Coupon for Individuals: 2026 tax calculation schedule and Tables A to E, Social Security Benefit Adjustment Worksheet, Pension and Annuity Worksheet)

Two more tables take back the benefit of the low brackets. The 2% phase-out add-back starts above $56,500 of Connecticut AGI for single filers and $100,500 for joint filers and reaches $250 and $500. The recapture starts above $105,000 (single) and $210,000 (joint), and tops out at $3,400 above $540,000 and $6,800 above $1,080,000. The example couple with $237,500 of Connecticut AGI pays $11,750 from the rate schedule plus a $500 add-back and $150 of recapture. (Form CT-1040ES (2026), Estimated Connecticut Income Tax Payment Coupon for Individuals: 2026 tax calculation schedule and Tables A to E, Social Security Benefit Adjustment Worksheet, Pension and Annuity Worksheet)

Social Security: fully exempt with federal AGI under $75,000 (single, married filing separately) or $100,000 (joint, head of household, surviving spouse); otherwise no more than 25% of benefits is taxed. (Form CT-1040ES (2026), Estimated Connecticut Income Tax Payment Coupon for Individuals: 2026 tax calculation schedule and Tables A to E, Social Security Benefit Adjustment Worksheet, Pension and Annuity Worksheet)

Pension, annuity and IRA deduction: 100% under the same $75,000 and $100,000 thresholds in 2026, then 85% down to 2.5% in steps, ending at $100,000 (single) or $150,000 (joint). No minimum age applies. (Form CT-1040ES (2026), Estimated Connecticut Income Tax Payment Coupon for Individuals: 2026 tax calculation schedule and Tables A to E, Social Security Benefit Adjustment Worksheet, Pension and Annuity Worksheet)

Fully exempt at any income: military retirement pay (line 44) and Tier 1 and Tier 2 Railroad Retirement benefits (line 43). Connecticut Teachers’ Retirement System income is 50% exempt at any income (line 45). (Form CT-1040 (2025), Connecticut Resident Income Tax Return Instructions: Schedule 1 subtractions and Schedule 3 property tax credit)

From tax year 2026 retirement pay of retired members of the commissioned corps of the U.S. Public Health Service is also subtracted from income. (Connecticut Department of Revenue Services: 2026 Connecticut State Tax Developments)

The same three households appear on every state page, so the figures can be compared across states. Each is a full-year resident taking the standard deduction, with no dependents. The figures are state income tax only: any county, city or school district income tax is described on this page but not added in. Pension income is from a private employer, and IRA figures are taxable withdrawals from traditional accounts. The state tax is our calculation from Connecticut's published 2026 rules; it is an illustration, not a return.

These households also owe federal income tax, which is the same wherever they live. The tax bracket calculator and the guide to taxes in retirement cover that side.

Property tax is levied by Connecticut’s towns and cities on homes and on motor vehicles. As a comparative figure, the Tax Foundation’s 2026 report, using 2024 Census data, puts the effective rate on owner-occupied homes at 1.54% of value, third-highest in the country. On a $500,000 home that is about $7,700 a year, and mill rates differ widely from town to town. (Tax Foundation, Property Taxes by State and County, 2026 (comparative figures from Census ACS data))

The state requires every municipality to offer the Circuit Breaker credit to older and disabled homeowners and a set of veterans’ exemptions, and since 2017 it has been allowed to cut its reimbursement to towns for the Circuit Breaker without reducing what homeowners receive. Disabled homeowners get a $1,000 exemption and blind residents $3,000. Towns can add relief of their own on top. (Connecticut General Assembly, Office of Legislative Research, Report 2026-R-0027: Mandatory Property Tax Relief for Homeowners (February 3, 2026))

Cars are taxed too. A personal motor vehicle is assessed at 70% of a value that, since the October 1, 2024 assessment year, is based on the manufacturer’s suggested retail price reduced by a depreciation schedule, so the taxable value of a car no longer rises from one year to the next. Municipalities and special districts set the rate but cannot go above 32.46 mills on motor vehicles. (Connecticut General Assembly, Office of Legislative Research, Report 2025-R-0097: Personal Motor Vehicle Property Tax Assessments and Rates (July 10, 2025))

Part of the property tax comes back on the income tax return. The Schedule 3 credit is up to $300 per return for tax paid on a primary residence, a motor vehicle or both (one vehicle for single filers, two for joint filers), and it has no age requirement. It cannot exceed the income tax owed. The example households on this page are shown before this credit because it depends on the property tax paid. (Form CT-1040 (2025), Connecticut Resident Income Tax Return Instructions: Schedule 1 subtractions and Schedule 3 property tax credit)

The state sales and use tax is 6.35% on most goods and taxable services. Meals and certain beverages are taxed at 7.35%, and a 7.75% luxury rate applies to most motor vehicles priced over $50,000, jewelry over $5,000 and clothing, footwear, handbags, luggage, wallets and watches over $1,000. Renting a car for 30 days or less is taxed at 9.35%. (Connecticut Department of Revenue Services: Sales and use tax information (rates))

Food products for human consumption are exempt, though meals, candy, carbonated beverages and alcohol are not. Prescription medicines, nonprescription drugs, hearing aids, canes, walkers, wheelchairs, diabetic supplies, and gas, electricity and heating fuel for a home are also exempt. (Connecticut Department of Revenue Services: Exemptions from sales and use taxes)

Connecticut has no local sales taxes. As a comparative figure, the Tax Foundation puts the combined state and average local rate at 6.35% as of January 1, 2026, 33rd among the states. (Tax Foundation, State and Local Sales Tax Rates, 2026 (comparative figures))

Connecticut has an estate tax and a gift tax that share one exemption. For deaths in 2026 the exemption is $15 million, the federal basic exclusion amount, and tax is due only when the Connecticut taxable estate is larger. The rate is a flat 12% of the excess. (Connecticut Department of Revenue Services: Estate and gift tax information)

Lifetime gifts are taxed on the same terms. No gift tax is due until a donor’s total Connecticut taxable gifts made since January 1, 2005 pass $15 million, and gifts within the federal annual exclusion of $19,000 per recipient are not counted. A gift tax return is due April 15 of the following year, and spouses cannot file a joint gift tax return. (Connecticut Department of Revenue Services: Estate and gift tax information)

The combined estate and gift tax a person pays cannot exceed $15 million. An estate over the exemption files Form CT-706/709 with the Department of Revenue Services within six months of death; a smaller estate files Form CT-706 NT with the Probate Court only. A nonresident’s estate above the exemption pays a share of the tax based on its Connecticut real and tangible property. There is no separate inheritance tax. (Connecticut Department of Revenue Services: Estate and gift tax information)

The federal estate tax applies in every state. The estate tax calculator estimates both the federal tax and any state tax.

The IRA share of the retirement income deduction reaches 100% for 2026. The 2026 estimated tax worksheet counts every dollar of a taxable IRA distribution, subject to the same federal AGI thresholds and phase-out table as pensions. (Form CT-1040ES (2026), Estimated Connecticut Income Tax Payment Coupon for Individuals: 2026 tax calculation schedule and Tables A to E, Social Security Benefit Adjustment Worksheet, Pension and Annuity Worksheet)

For 2025 the figure was 75%, so returns filed in early 2026 still tax a quarter of IRA withdrawals even below the thresholds. (Form CT-1040 (2025), Connecticut Resident Income Tax Return Instructions: Schedule 1 subtractions and Schedule 3 property tax credit)

The two lowest rates were cut for tax years from 2024: 3% became 2% on the first $10,000 (single) or $20,000 (joint), and 5% became 4.5% on the next $40,000 or $80,000. The benefit is capped for single filers earning $150,000 and couples earning $300,000. The same legislation provided for the phase-out of the pension, annuity and IRA deductions above the income thresholds. (Connecticut Department of Revenue Services: 2023 Connecticut State Tax Developments (rate reductions from 2024, pension and IRA deduction phase-out))

The 2026 legislative session added a subtraction for U.S. Public Health Service commissioned corps retirement pay from tax year 2026 and, from 2027, a family caregiver credit of 50% of eligible expenses up to $2,000. The Department of Revenue Services’ summary of 2026 legislation lists no change to the rates, the Social Security thresholds or the pension and IRA deduction. (Connecticut Department of Revenue Services: 2026 Connecticut State Tax Developments)

The estate and gift tax exemption for 2026 is $15 million, following the federal basic exclusion amount. The 12% rate and the $15 million cap on tax are unchanged. (Connecticut Department of Revenue Services: Estate and gift tax information)

A person is a Connecticut resident for the year if the state is their domicile, the place they intend as a permanent home and return to after being away. Someone domiciled elsewhere is still taxed as a resident if they keep a permanent place of abode in Connecticut for the whole year and spend more than 183 days in the state. A home counts whether owned or rented, unless it is kept only for a temporary stay. (Connecticut Department of Revenue Services: Resident income tax information (resident, part-year resident, domicile, permanent place of abode))

A person who moves in or out during the year is a part-year resident and files Form CT-1040NR/PY. Part-year residents are taxed on all income received while resident and on Connecticut-source income, such as rent from Connecticut property, received while a nonresident. A retiree who leaves mid-year therefore reports pension and IRA income only for the months before the move. (Form CT-1040ES (2026), Estimated Connecticut Income Tax Payment Coupon for Individuals: 2026 tax calculation schedule and Tables A to E, Social Security Benefit Adjustment Worksheet, Pension and Annuity Worksheet)

Federal law bars a state from taxing the retirement income of someone who is no longer a resident or domiciliary. Pension, 401(k) and IRA payments earned in a Connecticut career are taxed only by the state where the retiree lives when they are paid. (4 U.S.C. 114, Limitation on State income taxation of certain pension income)