CT State Income Tax Guide Intuit TurboTax Blog

Location is everything if you want to save a few income tax dollars. Some of the English colonies in North America taxed property (mostly farmland at that time) according to its assessed produce, rather than, as now, according to assessed resale value. Some of these colonies also taxed „faculties” of making income in ways other than farming, assessed by the same people who assessed property. Being in a state with low or no income tax can be a major financial advantage, but it’s important to look at the full picture when deciding where you might save the most money.

Corporate Income Tax

Corporations engaged in a unitary business with other corporations should see Form CT-3-A-I, Table of contents, and go to “Who must file a combined return” for information concerning the combined return filing requirements. However, their structure is determined by individual states rather than the federal government, and they only apply to income generated in a specific state. 873, enacted in April 2022, Nebraska plans to reduce its top marginal individual income tax rate to 5.84 percent by 2027. The tax will be reduced by 0.2 percentage points per year. The initial reduction from 6.84 to 6.64 percent occurred on January 1, 2023.

State Corporate Income Tax Rates and Brackets, 2015

(set at $15,000 for single filers and $30,000 for joint filers in 2025) while suspending the personal exemption by reducing it to $0 through 2025. Most states use the federal tax code as the starting point for their own income taxes, but states vary in their approaches to bringing in the federal standard deduction and (currently suspended) personal exemption. Some states are conformed to out-of-date versions of the Internal Revenue Code (IRC), with California, which uses a 2015 (pre-TCJA) conformity date, as the most extreme case. Even absent conformity, some states chose to raise their own deductions and exemptions post-TCJA, which was particularly appropriate given the base-broadening nature of the federal law, some of which flowed through to state tax codes. (set at $13,850 for single filers and $27,700 for joint filers in 2023) while suspending the personal exemption by reducing it to $0 through 2025.

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8, enacted in September 2023, the top individual income tax rate in Arkansas was reduced from 4.7 percent to 4.4 percent for tax years beginning on or after January 1, 2024. This top rate applies to incomes between $24,300 and $87,000 for taxpayers earning $87,000 or less and to incomes over $8,801 for taxpayers earning more than $87,000. Individual income taxes are a major source of state government revenue, accounting for 38 percent of state tax collections. North Carolina’s flat individual income tax rate decreased from 4.99 to 4.75 percent for 2023 as a result of SB 105, the 2021 Appropriations Act, which was enacted in November 2021. Future scheduled reductions enacted under this same law will ultimately bring the rate to 3.99 percent by 2027.

For higher incomes, up to 25% of your benefits may be taxed. Whether you’re a full-year resident, part-year resident, or nonresident earning income in Connecticut, understanding the state’s tax brackets and rules is important to filing accurately and keeping your tax bill as low as possible. Choose any state from the list above for detailed state income tax information including 2025 income tax tables, state tax deductions, and state-specific state income tax rates income tax calculators. Many state pages also provide direct links to selected income tax return forms and other resources.

• Several states try to keep things simple by applying the same tax rate to most income.
• Nebraska has lowered its corporate income tax to a flat rate of 5.2 percent.
• These rates can directly influence residents’ financial planning and well-being.
• The eFile Tax App handles all the complicated forms and math for you.
• A lighter tax burden could mean more freedom to enjoy your earnings now and more security to save for those golden years.
• The more you earn, the higher the percentage you’ll pay in income tax on your top dollars.

• Individual income taxes are a major source of state government revenue, accounting for 38 percent of state tax collections.
• New Jersey and New York also implement this type of „millionaire’s tax.”
• Effective January 1, 2024, the tax rate decreased from 5 percent to 4.7 percent (applied on taxable income exceeding $10,000).
• State officials encourage taxpayers to file their Kentucky returns by Wednesday, February 26th, 2026 to avoid the delay.

New Jersey and New York also implement this type of „millionaire’s tax.” Airbnb Accounting and Bookkeeping Below, you’ll find the top 10 states with the highest income tax rates. New York’s maximum marginal income tax rate is the 1st highest in the United States, ranking directly below New York’s %.

Cigarette Smuggling Cost States Nearly $5 Billion in Forgone Excise Tax Revenue Each Year

Unfortunately, the Department of Revenue has announced a delay. But if you earn the same $100,000 trial balance in Texas, you won’t have to pay a single dime in state income taxes. This can make a huge difference in the amount of disposable income you have to spend, particularly if you’re a high income earner. Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming don’t impose an income tax at all. New Hampshire falls into a gray area; it doesn’t levy a tax on earned income, but it does tax interest and dividends at a flat 5%.

• Good records help you determine which credits and deductions you qualify for, and serve as documentation if we need to verify information on your return.
• Most state governments in the United States collect a state income tax on all income earned within the state, which is different from and must be filed separately from the federal income tax.
• Many of the law’s provisions took effect on January 1, 2023, including the initial reduction in the individual income tax rate from 5 to 4.5 percent.
• For personalized help with state taxes, consult a local professional such as a CPA or tax preparer.
• 1001, enacted in May 2023, Indiana accelerated its previously enacted tax rate reductions, lowering the individual income tax rate from 3.05 in 2024 to 3.00 percent in 2025.

What To Do If You’re Still Waiting on an Old Tax Refund

• 873, enacted in April 2022, Nebraska plans to reduce its top marginal individual income tax rate to 5.84 percent by 2027.
• New York collects a state income tax at a maximum marginal tax rate of %, spread across tax brackets.
• File 100% free when you switch to TurboTax and do your own taxes on the TurboTax app by 2/28.
• The historic maps appear as they were originally published early in the applicable tax year; they have not been updated for changes enacted in those years that were retroactively applicable as of the beginning of those tax years.
• This replaces a 2018 surtax imposed on corporations with incomes above $1 million dollars, which expired at the end of 2023.

Considering the full picture of taxes, from income to sales to property, provides the clearest view of how your state of residence affects your financial wellbeing. North Carolina’s franchise tax is larger, and a more significant source of revenue, than most other remaining capital stock taxes. State tax liability can be further complicated by states changing their tax codes from one year to the next. Be sure to do your research before you prepare your 2024 state tax return and do your homework so you can do effective tax planning for 2025. Other reasons to file include having a federal alternative minimum tax liability or claiming the Connecticut Earned Income Tax Credit (EITC), which gives low- to moderate-income workers a state credit based on their federal EITC. As of January 1, 2025, New Hampshire repealed its interest and dividends tax, joining the group of seven other states with no individual income tax.