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Official Tax Guide

Connecticut Taxes 2025: Income, Sales, and Property Tax Guide

Complete guide to Connecticut state taxes. Income tax (3% - 6.99%), sales tax, and what you need to know before moving.

Updated January 15, 2026
5 min read

Connecticut State Tax Guide 2025

Welcome to Connecticut! As you settle into the Constitution State, understanding the tax landscape is crucial for effective financial planning. Connecticut’s tax structure features a progressive income tax, a standard state sales tax, and some of the highest property taxes in the nation.

This guide provides an overview of Connecticut’s tax system based on 2025 standards.

1. Income Tax

Connecticut utilizes a progressive income tax system. This means that tax rates increase as your income rises, divided into brackets.

  • Tax Structure: Progressive (Marginal).
  • Rate Range: 3% to 6.99%.

How it Works

Residents are taxed on a sliding scale. While the specific income brackets are adjusted periodically for inflation, the rates generally apply as follows:

  • Lower Incomes: Start at a lower rate (e.g., 3%).
  • Higher Incomes: Progressively reach the top marginal rate of 6.99%.

Note for High Earners: Connecticut imposes a "Millionaires Tax," which creates the 6.99% bracket for single filers earning over $500,000 and joint filers earning over $1,000,000. For incomes below these thresholds, the top marginal rate is generally 5.5% (though this may fluctuate based on legislative changes; verify current brackets).

2. Sales Tax

Connecticut sales tax applies to the sale or lease of most goods and some services.

  • State Sales Tax Rate: 6.35%.
  • Local Taxes: Connecticut generally does not allow municipalities to add local sales taxes on top of the state rate. The 6.35% rate applies uniformly across the state.

Taxable Items

  • General Goods: Clothing, electronics, furniture, and vehicles.
  • Digital Goods: Downloaded music, software, and eBooks are taxable.

Exemptions

  • Clothing and Footwear: Items under $100 per unit are exempt from sales tax.
  • Groceries: Most unprepared food items (groceries) are exempt from sales tax.
  • Prescription Medications: Exempt.

3. Property Tax

Property taxes in Connecticut are administered at the local level (towns and cities) and are a primary source of revenue for municipalities.

  • Overview: Connecticut is known for having some of the highest effective property tax rates in the United States.
  • Assessment: Taxes are levied on the assessed value of real estate, determined by local assessors.

What to Expect

  • Mill Rates: Property tax is calculated using a "mill rate." One mill equals $1 of tax for every $1,000 of assessed value.
  • Variability: Mill rates vary significantly by town. While the state sets education funding formulas, local boards of education and selectmen determine the specific rates.
  • Vehicles: In addition to real estate, Connecticut imposes an annual tax on motor vehicles based on age and value.

4. Other Taxes

When budgeting for life in Connecticut, consider these additional tax burdens:

  • Gas Tax: Connecticut has a fixed excise tax on gasoline. While rates fluctuate, they are generally higher than the national average.
  • "Sin" Taxes: Connecticut taxes tobacco products and alcohol at specific excise rates separate from the sales tax.
    • Cigarettes: $4.35 per pack (plus federal tax).
    • Alcohol: Beer, wine, and liquor are subject to specific excise taxes at the distributor level.
  • Estate/Inheritance Tax: Connecticut is one of the few states with a state-level estate tax. As of 2025, this applies to estates exceeding the federal exemption amount (which is indexed for inflation). Unlike an inheritance tax (paid by the heir), this is paid by the estate before distribution.

5. Retiree Taxes

Connecticut offers specific exemptions for retirees, making it relatively friendly for those living on fixed incomes.

  • Social Security Benefits: Fully exempt from state income tax for residents with adjusted gross incomes below a certain threshold ($75,000 for single filers, $100,000 for married filing jointly). Above these thresholds, benefits become partially taxable.
  • Pension Income: As of recent legislation, pension and annuity income is fully exempt from state income tax for eligible taxpayers (generally based on age and income thresholds).
  • 401(k) / IRA Distributions: Distributions from qualified retirement plans (like 401ks and IRAs) are generally exempt from state income tax for those who qualify for the pension exemption.

6. Comparison to Neighbors

How does Connecticut stack up against its neighbors?

  • New York:
    • Income Tax: NY has a top marginal rate of 10.9% (significantly higher than CT's 6.99%).
    • Sales Tax: Similar combined rates (NYC is 8.875%), whereas CT is 6.35%.
  • Massachusetts:
    • Income Tax: MA has a flat tax of 5% (lower than CT's progressive rates).
    • Sales Tax: MA is 6.25%, very close to CT’s 6.35%.
  • Rhode Island:
    • Income Tax: Progressive, with a top rate of 5.99% (slightly lower than CT).
    • Property Tax: RI property taxes are generally lower than Connecticut’s.

Summary: Connecticut generally has lower income tax rates than New York but higher property taxes than most of New England.

Disclaimer

Important: Tax laws, rates, and brackets are subject to change by state legislation. The information provided in this guide is for general informational purposes only and is based on 2025 data. It does not constitute legal or financial advice.

We strongly recommend consulting with a Certified Public Accountant (CPA) or tax professional familiar with Connecticut tax law before making major financial decisions.