State-by-State Guide to Taxes on Middle-Class Families
Tool | November 2020

Connecticut State Tax Guide for Middle-Class Families

State tax rates and rules for income, sales, gas, property, cigarette, and other taxes that impact middle-class families.

Connecticut

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The Bottom Line
Flag of Connecticut

Least Tax-Friendly

The Constitution State is an expensive place to live. Connecticut's property taxes are the third-highest in the U.S., so the $10,000 cap on the federal tax deduction for state and local taxes stings a bit more here. The state-wide average property tax for a $300,000 home is $6,417 per year. However, residents in high-income areas such as Fairfield County typically pay more than $10,000 in property taxes each year, so their federal tax deductions for state and local taxes have been curtailed.

Starting in 2021, most Connecticut employers will also begin collecting a 0.5% payroll tax to fund the state's paid family and medical leave program.

Income Tax Range

Low: 3% (on up to $20,000 of taxable income for married joint filers and up to $10,000 for those filing individually)

High: 6.99% (on the amount over $1 million for married joint filers and over $500,000 for those filing individually)

Sales Tax

The state taxes most items at 6.35%, and localities are not allowed to add to that.

Groceries: Exempt
Clothing: Taxable (6.35% for items under $1,000; 7.75% for items over $1,000; items costing less than $50 are fully exempt)
Motor Vehicles: Taxable (6.35% for vehicles under $50,000; 7.75% for vehicles over $50,000; 4.5% for non-resident military personnel on full-time active duty in the state)
Prescription Drugs: Exempt

Real Property Taxes

In Connecticut, the median property tax rate is $2,139 per $100,000 of assessed home value.

Motor Fuel Taxes

Gasoline: 37.75¢ per gallon.
Diesel: 44.6¢ per gallon.

Sin Taxes

Cigarettes and little cigars: $4.35 per pack
Snuff: $3 per ounce
Chewing and smoking tobacco: 50% of the wholesale price
Cigars: 50% of the wholesale price ($0.50 cap)
Vapor products: $0.40 per ml for closed systems, 10% of wholesale price for other vapor products.

Beer: $0.23 per gallon
Wine: $0.79 per gallon ($1.98 for sparkling wine)
Liquor: $5.95 per gallon

Annual Car Taxes and Fees

An annual vehicle property tax is imposed. The rates are set by individual municipalities. Motor vehicle assessments are based on 70% of the average retail value as determined by the local assessor.

Estate and Inheritance Taxes

Connecticut has an estate tax with a $5.1 million exclusion, which will rise to $7.1 million on January 1, 2021. The tax due is limited to $15 million.

Connecticut is the only state with a gift tax on assets you give away while you're alive. If you made taxable gifts during the year, state law requires that you file a Connecticut estate and gift tax return to identify such gifts. However, taxes are due in 2020 only when the aggregate value of gifts made since 2005 exceeds $5.1 million ($7.1 million in 2021).

Estate and gift tax rates for 2020 range from 10% to 12% (10.8% to 12% in 2021).


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