Does Connecticut tax retirement income?

Does Connecticut tax Social Security?

Social Security is fully exempt below $75,000 of AGI ($100,000 joint); above that, at most 25% of benefits is taxed.

Benefits are fully exempt if federal AGI is under $75,000 (single or married filing separately) or under $100,000 (married filing jointly, surviving spouse or head of household). Above those amounts a worksheet subtraction applies, so at most 25% of your benefits is taxable in Connecticut.

Your federal return is a separate question — see how much of your benefit the IRS taxes with the taxable Social Security calculator.

Are pensions taxed in Connecticut?

Pensions are 100% exempt below $75,000 of AGI ($100,000 joint), phasing out to nothing at $100,000 ($150,000 joint).

The pension and annuity subtraction (defined-benefit plans, 401(k), 403(b), 457(b)) is 100% when federal AGI is under $75,000 for single, married filing separately or head of household, or under $100,000 for joint filers. Above that it phases down by table — 85% at $75,000–$77,499 single or $100,000–$104,999 joint — and reaches zero at $100,000 single or $150,000 joint. Connecticut Teachers’ Retirement System benefits can take a 50% subtraction instead (not both).

Public vs. private pensions: Public and private pensions use the same subtraction; Connecticut teachers’ pensions have an alternative 50% subtraction.

Are IRA and 401(k) withdrawals taxed in Connecticut?

Traditional IRA withdrawals are 100% exempt for 2026 under the same income limits as pensions.

The traditional (not Roth) IRA subtraction was 75% for 2025 and is 100% for 2026 and later, with the same AGI thresholds and phase-out as pensions. 401(k), 403(b) and 457(b) payouts already get 100%, subject to the phase-out.

Required minimum distributions (RMDs) are IRA and 401(k) withdrawals, so the same rules apply. Estimate your RMD.

Is military retirement pay taxed in Connecticut?

Military retirement pay is fully exempt at any income.

What is Connecticut’s income tax rate?

7 brackets, topping out at 6.99%.

Seven brackets from 2% to 6.99%; the 6.99% rate applies above $500,000 single or $1,000,000 joint. We found no enacted change for 2026. At higher incomes Connecticut also recaptures the benefit of the lower brackets and phases out the personal exemption and credits.

Standard deduction and exemptions

Connecticut has no standard deduction. The personal exemption and personal tax credit phase out with income; the credit is zero above $64,500 single or $100,500 joint.

What tax breaks do seniors get in Connecticut?

The Social Security, pension, IRA and teachers’ pension subtractions above, and a property tax credit of up to $300 per return (income limits apply). Connecticut starts from federal AGI, so the federal $6,000 senior deduction does not reduce Connecticut tax.

What changed for 2026?

The IRA subtraction reaches 100% in 2026. A 2026 bill (SB 510) proposed a 1.75% surcharge on capital gains for incomes over $1 million ($2 million joint) starting in 2027; we found no sign it was enacted but could not confirm its final status in an official record.

Rules from the 2025 CT-1040 instructions (Rev. 12/25); the IRA subtraction reaches 100% in 2026 under existing law.