Connecticut personal income tax rate
The tax ranges from - 2%-6.99%
Connecticut has a progressive income tax rate structure where the tax rate increases with income at varying rates as income grows in each bracket. For taxable years beginning Jan. 1, 2024, there will be a decrease in the two lowest rates: the 5.0% personal income tax rate will be lowered to 4.5% and the 3.0% rate personal income tax rate will be lowered to 2.0%.
Consult Who Must File Form CT-1040NR/PY for filing requirements
Connecticut corporate income tax rate
7.5%
Tax is paid on the basis (income or capital stock) that yields the higher tax or the minimum tax of $250. A fixed dollar minimum tax is imposed in Connecticut before 2028. The $250 minimum on the corporate excess tax makes it, in effect, a minimum tax on corporations. However, the corporate excess tax will be phased out between 2024 and 2028. See the franchise tax card for more details.
Connecticut requires certain corporation business taxpayers to pay an additional corporation business tax surcharge equal to a specified percentage of their tax liability before tax credits are applied. Since its enactment in 1989, the surcharge has been modified, eliminated and reinstated multiple times. Most recently the 10% corporation business tax surcharge is extended for three additional years to tax years 2023, 2024 and 2025.
Out-of-state businesses may establish nexus with Connecticut through economic nexus. Physical presence is not required to establish nexus with the state. Connecticut applies a bright-line test based on in-state receipts. Under Connecticut regulations, a taxpayer that derives income from Connecticut sources and has a substantial economic presence in Connecticut is subject to the corporation business tax. The Connecticut Department of Revenue Services takes the position that a taxpayer has nexus if it engages in active solicitation of Connecticut residents and has significant receipts ($500,000 or more per year), unless Public Law 86-272 immunity applies.
Connecticut franchise tax rate
The tax capital stock basis tax rate is 3.1 mills per dollar. Tax is paid on the basis (income or capital stock) that yields the higher tax or the minimum tax of $250. The maximum tax is $1 million.
Note: The capital stock basis tax is being phased out with rate decreases to 2.6 mills per dollar in the 2024 tax year; 2.1 mills per dollar in the 2025 tax year; 1.6 mills per dollar in the 2026 tax year; 1.1 mills per dollar in the 2027 tax year; and zero mills beginning Jan. 1, 2008.
Connecticut sales/use tax rate 6.35%
Some products and services have special rates. There are no local sales and use taxes imposed.
Visit Connecticut sales/use tax for additional detailed information. Consult the consolidated Connecticut sales tax chart to view summarized material such as remote seller nexus rules, sales tax holidays and administration information.
Connecticut pass-through entity/general business taxes
Access Connecticut business tax information (consult IP 2018(5), Getting Started in Business) for compliance obligations.
Connecticut mandates a pass-through entity tax for taxable years beginning on or after Jan. 1, 2018. Effective Jan. 1, 2024, the pass-through entity tax is made optional, rather than mandatory.