Connecticut’s approach to taxing Social Security income is a significant consideration for residents, particularly retirees. Knowing whether benefits are subject to state taxes is crucial for financial planning in retirement.
Income Thresholds
In Connecticut, Social Security income taxation is determined by adjusted gross income (AGI) thresholds. The state exempts Social Security income from taxes for individuals with an AGI below $75,000 and married couples filing jointly or heads of household with an AGI below $100,000.1Connecticut TaxFormFinder. Form CT-1040 Instruction Booklet These thresholds aim to ease the tax burden on lower and middle-income retirees.
For those exceeding these thresholds, a portion of their Social Security benefits may be taxed. The taxable amount is calculated using a state worksheet tied to your federal calculation of taxable benefits, which determines how much of your benefits remain exempt at higher income levels.2Connecticut Department of Revenue Services. DRS Calculators/Tables
Filing Categories
Filing status plays a key role in how Social Security income is taxed in Connecticut. The state recognizes categories such as single filers, married couples filing jointly, married individuals filing separately, and head of household, each of which influences how income is aggregated and taxed.
Single filers and married individuals filing separately may see a larger portion of their Social Security benefits taxed if their income surpasses the state’s thresholds. Married couples filing jointly, however, might benefit from combined income calculations, potentially reducing the effective tax rate on their benefits.
Head of household filers, often unmarried individuals supporting a qualifying person, may benefit from higher income thresholds than single filers, potentially lowering the taxable portion of their Social Security income.
State Deductions
Connecticut provides certain state tax subtractions that can affect the taxation of retirement income. These rules are particularly relevant for retirees seeking to optimize their post‑retirement income.
One key provision allows a subtraction for qualifying pension and annuity income based on AGI and filing status. Social Security benefits are handled separately through the Social Security Benefit Adjustment noted above. Staying informed about these rules is important, as they can change and impact tax planning.
Connecticut does not offer a separate state deduction for medical expenses; medical costs only affect your federal return and flow into Connecticut through your federal adjusted gross income.