Does Connecticut Tax Retirement Income?

Partly. Connecticut taxes some Social Security benefits, subject to an exclusion or age rule.

Social Security is fully exempt when federal AGI is under $75,000 for single and married-separate filers or $100,000 for joint, head-of-household, and surviving-spouse filers. Above those thresholds, Connecticut taxes the lesser of the federally taxable amount or 25% of total benefits, so the state never reaches the federal 85% level.

The Connecticut answer is separate from the federal one. Depending on combined income, up to 85% of Social Security benefits can be taxable on the federal return regardless of what Connecticut does, so the state rule changes the state line only. Our guide to states that do not tax Social Security shows where Connecticut sits among the states that still tax benefits.

Partly. Connecticut taxes some pension income, subject to an exclusion or age rule.

Pension and annuity income, which for Connecticut includes defined-benefit pensions and 401(k), 403(b), and 457(b) distributions, is 100% subtracted when federal AGI is under $75,000 single or $100,000 joint. Between $75,000 and $100,000 single, or $100,000 and $150,000 joint, a phase-out table cuts the subtraction from 85% down to 2.5% before it reaches zero.

The pension, annuity, and IRA subtraction is a percentage of qualifying income set by federal AGI. For a single filer it is 100% under $75,000, 85% from $75,000 to $77,499, 70% to $79,999, 55% to $82,499, 40% to $84,999, 25% to $87,499, 10% to $89,999, 5% to $94,999, 2.5% to $99,999, and zero at $100,000. Joint filers follow the same steps between $100,000 and $150,000. Connecticut also has a personal exemption of $15,000 for a single filer that phases out above $30,000 of Connecticut AGI.

Public and private pensions, annuities, and retirement-plan distributions do not always get the same treatment. The pension comparison lists which states exempt pensions broadly, partly, or only for certain plans.

Partly. Connecticut taxes some traditional 401(k) and IRA withdrawals, subject to an exclusion or age rule.

Traditional 401(k) distributions are treated as pension and annuity income. Traditional IRA distributions phased in separately: 75% of the IRA amount qualified in 2025 and 100% qualifies beginning in 2026, then the same AGI thresholds and phase-out table apply. Roth IRA distributions are not part of this calculation.

Two timing points matter in Connecticut. A Roth conversion is taxable in the year it is done, and Connecticut starts from federal adjusted gross income, so a large conversion can land in a year when the state exclusion does not cover it. Qualified Roth withdrawals later are generally not taxable at either level. Required minimum distributions follow the same Connecticut rules as any other traditional-account withdrawal.

Every state page on this site runs the same retiree profile so the states can be compared: $30,000 of Social Security, $40,000 withdrawn from a traditional 401(k), and a $20,000 private pension, $90,000 in total.

A 68-year-old single filer with $30,000 of Social Security, $40,000 from a 401(k), and a $20,000 private pension has federal AGI of about $85,500 once 85% of the Social Security is counted. That is over the $75,000 line, so only part of the retirement income is subtracted and roughly $2,100 of Connecticut tax remains before the personal tax credit.

Step one, Social Security: federal AGI of $85,500 is at or above $75,000, so Connecticut taxes at most 25% of the $30,000 benefit, or $7,500, and the other $18,000 of federally taxable benefit is subtracted. Step two, pensions: $85,500 lands in the $85,000 to $87,499 band, so only 25% of the $60,000 of 401(k) and pension income, or $15,000, is subtracted. Step three, Connecticut AGI is about $52,500, the $15,000 personal exemption has fully phased out above $45,000, and the tax on $52,500 is $2,000 plus 5.5% of the amount over $50,000, roughly $2,100 before the personal tax credit. Contrast the same retiree taking $29,000 instead of $40,000 from the 401(k): federal AGI drops to about $74,500, Social Security becomes fully exempt, 100% of the pension and 401(k) income is subtracted, and the Connecticut tax on retirement income is zero. A married couple with the same $90,000 sits under the $100,000 joint threshold and also pays nothing on this income.

The same $90,000 profile looks different a state line away. The rows below come from the reviewed 51-state table; each state name links to its own guide.

• Massachusetts: treats Social Security as exempt, pensions as partially taxed, and 401(k) and IRA withdrawals as taxed, with a top rate of 9.00% and many government pensions are exempt.
• Rhode Island: treats Social Security as partially taxed, pensions as partially taxed, and 401(k) and IRA withdrawals as partially taxed, with a top rate of 5.99% and income-tested retirement exclusion.
• Florida: has no individual income tax at all.

Connecticut retirees fixate on the 6.99% top rate. The real driver is the $75,000 and $100,000 federal AGI lines: one extra dollar over the threshold flips Social Security from fully exempt to partly taxed and starts a ladder that strips 15 points of the pension subtraction every $2,500.

Military retirement: Military retirement pay is fully subtracted from Connecticut income with no income limit. The pension worksheet removes it before the phase-out percentage is applied. See the military retirement tax map for every state's treatment.

Estate and inheritance tax: Connecticut has an estate tax and a gift tax. For deaths in 2026 the exemption is $15 million, matching the federal amount, and the tax is a flat 12% on the excess. There is no inheritance tax.

Selling a home or investments in Connecticut: retirement-income rules do not cover capital gains. See Connecticut capital gains tax before selling appreciated property or a brokerage position in the year you move or retire.

• Confirm the exclusion you are claiming. The pension, annuity, and IRA subtraction is a percentage of qualifying income set by federal AGI. For a single filer it is 100% under $75,000, 85% from $75,000 to $77,499, 70% to $79,999, 55% to $82,499, 40% to $84,999, 25% to $87,499, 10% to $89,999, 5% to $94,999, 2.5% to $99,999, and zero at $100,000. Joint filers follow the same steps between $100,000 and $150,000. Connecticut also has a personal exemption of $15,000 for a single filer that phases out above $30,000 of Connecticut AGI.
• Part-year residents. If you moved into or out of Connecticut during the year, retirement income is generally allocated to the period of residency, and the former state may still tax distributions received before the move. Document the move date, the new domicile, and where each distribution was received.
• Withholding and estimates. Pension and IRA custodians often withhold federal tax but not Connecticut tax. If Connecticut taxes any part of your retirement income, check whether quarterly estimated payments are needed to avoid an underpayment penalty.
• Federal side. The federal return has its own rules: up to 85% of Social Security can be taxable, the temporary $6,000 federal senior deduction is available for 2025 through 2028 subject to income limits, and Roth conversions are taxed in the conversion year. State exemptions do not change any of that.
• Large one-time distributions. Manage federal AGI around the thresholds, not Connecticut taxable income. Trim a withdrawal, use qualified charitable distributions, or spread a Roth conversion so that AGI stays under $75,000 single or $100,000 joint in the years with the largest pension and IRA income.

Comparing states before a move? Use the retirement taxes by state table and the moving states tax guide, and read retirement tax planning for how distributions, conversions, and a move are sequenced together.