State Income Taxes in Connecticut
The state of Connecticut has an individual income tax. Like most states with income tax, it is calculated on a marginal scale whose range is from 3% to 6.99% for 2020. Connecticut is one of three states that have a “tax benefit recapture” where the top tax rate (6.99%) is applied to all income if your income exceed the top tax bracket of $500,000 (the other two states are Arkansas and New York.)
State Business Taxes in Connecticut
The state of Connecticut has a flat Corporate Tax rate of 7.5%.
Capital stock taxes in Connecticut
Connecticut is one of a few states that has a Capital Stock Tax. The tax rate is .341% upto a maximum payment of $1,000,000. Connecticut differs from other states in that taxpayers pay the greater of corporate income tax or capital stock tax liability.
Sales and Property Taxes in Connecticut
Sales Taxes in Connecticut – Connecticut doesn’t have a local tax rate. The state rate is 6.35% (This is high for a state tax but average considering there is no local tax).
Property Taxes in Connecticut – the average property tax rate for residential property in the state of Connecticut is 1.70%, making it a less preferable place to own property. The property tax here is ranked as the 3rd highest per capita with average tax collections of $3,020.
Estate Taxes in Connecticut
Connecticut is one of the few states that have state estate taxes. After an exemption amount of $5.1 million, the tax rate ranges from 10%-12%. Connecticut’s exemption is expected to match the federal amount by 2023.
Payroll Taxes in Connecticut
Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three:
- Wage Base – Connecticut has a wage base of $15,100 for 2020
- UI Rates – range from 1.90% to 6.80%
- Schedules – Connecticut has only one schedule regarding UI rates
Connecticut Business Entities – LLCs
Connecticut is one of the cheapest states in the country to set up your LLC. Here are some important facts:
- Connecticut’s annual LLC fee at only $20.
- When you register with the state, you pay a one time fee of $120
- Secretary of State of Connecticut website – click here