Connecticut tax deductions and write-offs (2026)

Yes: Connecticut's municipal car tax is value-based, so it's deductible as personal property tax.

Yes on your federal return if you itemize, within the $40,400 SALT cap. Connecticut adds its own break: Credit up to $300 for property tax on your home or car; full credit if AGI is $49,500 single or $70,500 joint, then phases out.

Yes: Connecticut offers the Renters' Rebate for Elderly/Disabled Renters. Annual rebate of up to $900 for married couples or $700 for single renters, based on income and the prior year's rent and utility payments; apply through your town assessor or social services office. Age 65+, surviving spouse 50+ of a prior recipient, or 18+ and eligible for Social Security Disability; one year of Connecticut residency; qualifying income up to $46,300 single or $56,500 married (2026 filing season).

No. Connecticut fully exempts armed forces retirement pay from state income tax (100% exemption since tax year 2023). Connecticut's FY2027 budget (SB 1, signed May 26, 2026) extends the exemption to retired U.S. Public Health Service officers; NOAA Corps retirees are not included, according to MOAA. Other retirement income: Pension and annuity income is 100% deductible if AGI is under $75,000 (single) or $100,000 (joint), phasing out to zero at $100,000/$150,000. IRA distributions get the same deduction on the same phase-out (75% in 2025, 100% from 2026).

Partly. Pension and annuity income is 100% deductible if AGI is under $75,000 (single) or $100,000 (joint), phasing out to zero at $100,000/$150,000. IRA distributions get the same deduction on the same phase-out (75% in 2025, 100% from 2026).

Partly. Social Security is fully exempt if federal AGI is below $75,000 (single or married filing separately) or $100,000 (married filing jointly, head of household, qualifying widow(er)). Above those levels, no more than 25% of benefits is taxable. Use the CT-1040 Social Security Benefit Adjustment Worksheet or the DRS online calculator to figure the partial subtraction. A 2026 legislative research report confirms these thresholds are unchanged.

Yes: Connecticut offers the Connecticut Earned Income Tax Credit (CT EITC), 40% of the federal EITC, plus an extra $250 for filers with at least one qualifying child (refundable). Must be eligible for the federal EITC and be a Connecticut resident. The $250 child bonus applies to tax years beginning in 2025 and later. Claim on Schedule CT-EITC.

Only instead of income tax: itemizers in Connecticut pick sales tax (6.35% state rate, about 6.35% with local taxes) or state income tax, whichever is bigger. Most vehicles priced over $50,000 are taxed at 7.75% on the entire price (as are jewelry over $5,000 and clothing over $1,000); no local sales taxes.

Yes on your Connecticut return: $5,000 single / $10,000 joint per return. Only contributions to the state's own plan count. CHET plan only; rollover contributions are not deductible. 2026 bills to raise the cap were not enacted.

No: Connecticut doesn't offer a state child tax credit. No state child tax credit, care credit, or dependent exemption. Connecticut paid a one-time child tax rebate in 2022 only. A 2025 law (PA 25-168) adds an extra $250 to the state EITC for filers with at least one qualifying child. Connecticut does have an earned income credit: 40% of the federal EITC, plus an extra $250 for filers with at least one qualifying child.

Yes, as a business expense: Connecticut charges $120 to form an LLC; ongoing: $80 annual report. Filed online Jan 1-Mar 31. The $250 Business Entity Tax was repealed for tax years beginning on/after Jan 1, 2020.

Connecticut taxes income up to 6.99%, exempts pension and IRA income for many retirees, and has a property tax credit of up to $300.