Flat-Fee Tax Preparation for Connecticut Residents

Connecticut has a graduated income tax with rates from 3% to 6.99% — one of the higher state income tax burdens in the Northeast

The CT Pass-Through Entity Tax (PTET) election allows S-corps and partnerships to elect entity-level taxation to bypass the federal SALT cap

Connecticut's estate tax applies to estates over $13.61M (matching the federal threshold in 2024), with rates up to 12% — a significant estate planning consideration

CT imposes a real estate conveyance tax: 0.75% on the first $800,000 of sale price, 1.25% on amounts above $800,000, plus an additional 2.25% surcharge on certain residential properties over $2.5M

Connecticut taxes capital gains at the same rates as ordinary income — no preferential long-term rate at the state level

CT requires estimated quarterly tax payments for individuals with expected CT tax liability over $1,000 — underpayment penalties apply

The CT pass-through entity income threshold: PEs with CT-source income must pay tax at the entity level or withhold for non-resident partners

Connecticut does not tax Social Security benefits for taxpayers with federal AGI under $75,000 (single) or $100,000 (married) — above those thresholds, SS benefits are fully taxable in CT

Connecticut Real Estate Tax

Connecticut's real estate market — particularly Fairfield County, New Haven, and Hartford suburbs — attracts investors from the NYC metro area. CT's conveyance tax on sales over $800K is significant for high-value transactions. Real estate gains are taxed as ordinary income at CT rates up to 6.99%, making tax deferral strategies like 1031 exchanges highly valuable for CT investors.

Connecticut Business Tax

Connecticut businesses face relatively high income tax rates and must navigate the CT PTET election as the primary SALT planning tool. Multi-state businesses with CT nexus have both income and sales tax obligations. The CT estate tax, while aligned with the federal threshold, requires planning for business owners with significant enterprise value and real estate holdings.

Do I need to file a Connecticut state tax return?

If you are a CT resident or earned CT-source income above the filing threshold, you must file a CT return. Connecticut residents are taxed on worldwide income; non-residents are taxed on CT-source income. CT's top rate of 6.99% applies to income over $500,000 (single) or $1,000,000 (married filing jointly).

What is the Connecticut PTET election?

Connecticut's Pass-Through Entity Tax allows eligible S-corps and partnerships to elect to pay CT income tax at the entity level. This payment is deductible on the federal return as a business expense, bypassing the $10,000 SALT cap. Partners and shareholders receive a credit against their individual CT tax. For CT business owners subject to the SALT cap, the election is typically highly beneficial.

How does Connecticut's real estate conveyance tax work?

When you sell real property in CT, the seller pays a conveyance tax of 0.75% on the first $800,000 of the sale price and 1.25% on amounts above $800,000. For certain residential properties over $2.5M, an additional 2.25% surcharge applies to the excess over $2.5M. These costs must be factored into deal economics and closing cost projections for CT real estate transactions.

Does Connecticut tax Social Security benefits?

Connecticut does not tax Social Security benefits for taxpayers with federal AGI under $75,000 (single filers) or $100,000 (married filing jointly). Above those thresholds, Social Security benefits are fully included in CT taxable income. With CT's top rate of 6.99%, high-income CT retirees may pay meaningful CT tax on their SS benefits — Roth conversion and income management strategies can help manage this exposure.