Last Updated: April 2026
Connecticut occupies a unique position in the American tax landscape: it is among the highest per-capita income states in the nation, home to hedge fund managers, finance professionals, and executives who work in New York City but choose to live in Fairfield County towns like Greenwich, Westport, and Darien. This high-wealth demographic shapes Connecticut’s tax policy — the state levies meaningful income taxes across all brackets while relying heavily on property taxes that reflect some of the highest home values in New England.
The 2024 tax reform reduced Connecticut’s two lowest income tax brackets, providing relief to lower-income filers. However, the top rate of 6.99% remains intact for high earners. For NYC commuters, the interaction between Connecticut and New York income taxes creates complexity: Connecticut residents working in New York City owe New York State and City taxes, and then claim a Connecticut credit for taxes paid to New York. Understanding this credit mechanism is critical for anyone commuting across state lines. This guide covers every aspect of Connecticut’s 2026 tax system.
Connecticut uses a progressive income tax system with seven brackets. Following 2024 tax reform legislation, the two lowest brackets were reduced, providing meaningful savings to lower and middle-income residents. The top rate of 6.99% applies to income above $500,000 for single filers and $1 million for married filing jointly.
| Taxable Income | Rate | Tax on Bracket |
|---|---|---|
| $0 – $10,000 | 2.0% | Up to $200 |
| $10,001 – $50,000 | 4.5% | Up to $1,800 |
| $50,001 – $100,000 | 5.5% | Up to $2,750 |
| $100,001 – $200,000 | 6.0% | Up to $6,000 |
| $200,001 – $250,000 | 6.5% | Up to $3,250 |
| $250,001 – $500,000 | 6.9% | Up to $17,250 |
| Above $500,000 | 6.99% | Marginal rate on excess |
| State | Top Income Tax Rate | Annual Tax on $500K Income |
|---|---|---|
| Connecticut | 6.99% | ~$30,500 |
| New York State | 10.9% | ~$52,000+ |
| Massachusetts | 9% (millionaires surtax) | ~$40,000+ |
| Rhode Island | 5.99% | ~$28,500 |
| New Hampshire | 0% (wages) | $0 |
Connecticut’s income tax is meaningfully lower than New York’s — which is a key driver for NYC commuters choosing Fairfield County over Manhattan or Westchester County. However, this advantage must be weighed against Connecticut’s very high property taxes.
Connecticut offers several key credits and deductions:
Connecticut’s property taxes are a defining feature of the state’s fiscal environment. Unlike many states, Connecticut has no statewide property tax — all property taxes are levied by municipalities (cities and towns). This creates extreme variation across the state, with wealthy Fairfield County towns maintaining lower effective rates due to high property values, while cities like Hartford, Bridgeport, and New Haven carry some of the highest effective rates in the country.
| Municipality | Mill Rate (approx.) | Effective Rate (approx.) | Annual Tax on $500K Home |
|---|---|---|---|
| Greenwich | 11.28 | ~0.75% | ~$3,750 |
| Westport | 16.86 | ~1.12% | ~$5,600 |
| Darien | 16.84 | ~1.12% | ~$5,600 |
| Stamford | 24.60 | ~1.64% | ~$8,200 |
| New Haven | 43.88 | ~2.92% | ~$14,600 |
| Hartford | 74.29 | ~4.95% | ~$24,750 |
| Bridgeport | 54.37 | ~3.62% | ~$18,100 |
Note: Mill rates are approximate for 2024–2025 grand list; effective rates depend on assessment ratios which vary by town. Connecticut assesses property at 70% of fair market value, so a mill rate must be applied to 70% of the home’s value to calculate annual taxes.
For a home with a fair market value of $1,000,000 in Stamford (mill rate ~24.60):
The same home in Greenwich (mill rate ~11.28) would yield: $700,000 × (11.28/1,000) = $7,896 annually. This illustrates why Greenwich is so attractive to high-net-worth commuters despite having some of the highest home prices in Connecticut.
Unlike California (Prop 13) or Nevada (3% cap), Connecticut has no statewide limit on annual property tax increases. Individual towns reassess properties on their own schedules (typically every 5 years), meaning a reassessment can result in a substantial one-year jump in assessed value and taxes owed. Residents can appeal assessments to their town’s Board of Assessment Appeals.
Connecticut’s general sales tax rate is 6.35%. Key features:
A significant share of Connecticut’s high-earning residents commute to New York City for work. The tax treatment is as follows:
| Scenario | NY State Tax | NYC Tax | CT Credit | Net CT Tax |
|---|---|---|---|---|
| $300K earner, all income from NYC work | ~10.9% marginal | ~3.876% | Full credit (CT rate lower) | $0 additional CT tax |
| $300K earner, CT-source income only | N/A | N/A | N/A | CT rate applies (up to 6.9%) |
Connecticut has eliminated its separate state estate tax threshold below the federal level. For 2024 and beyond, Connecticut’s estate tax exemption matches the federal exemption ($13.61 million per individual). This is a significant improvement from prior years when Connecticut had a $2 million exemption. Connecticut also has a gift tax: lifetime gifts above the $13.61M exemption are subject to a 12% Connecticut gift tax rate.
| Tax Category | Connecticut | New York (City Resident) | Florida |
|---|---|---|---|
| Income Tax ($500K) | ~$30,500 | ~$72,000+ | $0 |
| Property Tax ($1M home) | ~$8,000–17,000 | ~$9,000–12,000 | ~$7,000–12,000 |
| Sales Tax Rate | 6.35% | 8.875% (NYC) | 6–7.5% |
| Estate Tax | Federal only ($13.61M) | NY: starts at $7.16M | None |
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Get Expert Tax Help →Connecticut has a seven-bracket progressive income tax ranging from 2% on the first $10,000 of taxable income (single filers) to 6.99% on income above $500,000 (single) or $1 million (married filing jointly). The intermediate rates are 4.5%, 5.5%, 6%, 6.5%, and 6.9%. Following 2024 tax reform, the two lowest brackets were reduced. Connecticut does not have a flat tax — the system is graduated, meaning higher rates only apply to income within each bracket, not to all income.
Connecticut residents who work in New York City owe New York State income tax and New York City income tax on their NYC-sourced income. Connecticut then provides a tax credit on the CT return for income taxes paid to New York State. Because New York’s combined state and city rate (up to ~14.8%) exceeds Connecticut’s top rate (6.99%), most Fairfield County commuters effectively pay New York’s higher rate, with Connecticut providing a full credit that results in no additional Connecticut tax owed on NYC income. CT-source income (remote work days in CT, Connecticut investments, etc.) is taxed at Connecticut rates.
Connecticut property taxes are among the highest in the USA, but vary enormously by municipality. Property is assessed at 70% of fair market value, and each town sets its own mill rate. Wealthy Fairfield County towns like Greenwich have effective rates around 0.75–1.1%, while cities like Hartford have effective rates approaching 5%. There is no statewide cap on annual property tax increases. The statewide average effective rate is approximately 1.7–2.0%.
Connecticut’s estate tax exemption has been aligned with the federal exemption — currently $13.61 million per individual for 2024. This means most Connecticut estates owe no state estate tax. Connecticut also imposes a gift tax on lifetime gifts above the exemption at a 12% rate. Previously Connecticut had a $2 million estate tax threshold, but reform has effectively eliminated the estate tax for all but the largest estates.
Connecticut exempts unprepared groceries (food for home consumption), prescription drugs, and clothing items priced under $50 per item from sales tax. The general rate is 6.35%. A higher 7.75% rate applies to motor vehicles over $50,000 and jewelry or watches over $5,000. Most services are not subject to Connecticut sales tax, unlike states such as New Mexico or Hawaii that tax services broadly.
Connecticut is mixed for retirees. On the positive side: Social Security is fully exempt from CT income tax if your federal AGI is below $75,000 (single) or $100,000 (married); federal, state, and military pension income has partial exemptions; and Connecticut has no estate tax below $13.61M. The negatives: income tax rates up to 6.99% apply to other retirement income (IRA withdrawals, private pensions), and property taxes are very high in most municipalities. Retirees on fixed incomes may find Connecticut expensive relative to states like Florida or South Carolina.
Connecticut’s top income tax rate of 6.99% is significantly lower than New York State’s top rate of 10.9% (and even higher when NYC income tax is included). Massachusetts has a 5% flat rate for most income, but applies a 9% surtax on income above $1 million (the ‘Millionaires Tax’ passed in 2022). For incomes below $1 million, Massachusetts is actually cheaper than Connecticut. For very high earners ($500K+), Connecticut is cheaper than New York but more expensive than Massachusetts (below $1M) and substantially more expensive than New Hampshire (no income tax on wages).