State Income Tax
: 3% to 6.7% State Sales Tax
: 6.35% to 7% Estate Tax/Inheritance Tax
Connecticut can be inhospitable to retirees, depending on their income level and where they earned their retirement benefits. Some residents of the Constitution State can exclude their Social Security benefits from state income taxes, but only if their adjusted gross income is less than $50,000 (less than $60,000 for married couples). All out-of-state government and civil-service retirement pensions are fully taxed, but half of military retirement pay is excluded from taxes. The statewide sales tax rate is 6.35%, with luxury items taxed at 7%. Connecticut residents pay the second-highest property taxes in the U.S., according to the Tax Foundation, but residents 65 and older may qualify for an annual property-tax credit or rent rebate.
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