Retiring in Connecticut: income, property, and estate tax, with a Fairfield County focus

Connecticut's tax on retirees turns on a few income lines. Below them, Social Security, pensions, and IRA withdrawals are fully exempt. Above them, that income is taxed, and the state also keeps its own estate and gift tax.

How Connecticut taxes Social Security, pensions, and IRA withdrawals

For 2026, Connecticut does not tax this income if your federal AGI is under $100,000 on a joint return, or $75,000 if you're single. Above those lines, Connecticut taxes part of your Social Security and phases out the pension and IRA exemption, which ends at $150,000 joint and $100,000 single.

The tests use federal AGI, and the amounts aren't indexed for inflation. The Social Security test is a cliff, so with federal AGI even one dollar over the line, Connecticut can tax up to the lesser of 25% of your benefits or 25% of your provisional income above the federal base amount. Qualified Roth withdrawals aren't in AGI, so they never count toward the tests.

The senior deduction and QCDs in Connecticut

The federal $6,000 senior deduction doesn't help on the Connecticut return. It's claimed on Schedule 1-A after AGI, and Connecticut starts from AGI with no matching subtraction. QCDs do help, because they're excluded from AGI itself. Connecticut has no charitable deduction, so a check to charity saves no state tax, while a QCD lowers state income and can keep you under the lines.

Key numbers: full exemption below $100,000 joint / $75,000 single federal AGI · pension and IRA exemption gone at $150,000 / $100,000 · top rate 6.99% · $300 property tax credit · estate and gift exemption $15 million, 12% rate, no portability.

How Roth conversions and RMDs interact with the lines

Every dollar of RMD or conversion raises federal AGI, the number Connecticut tests. Between $100,000 and $150,000 joint, an extra dollar can pull Social Security and other retirement income into tax with it, so the state cost of a conversion can exceed the 6.99% top rate. Past $150,000 joint or $100,000 single, the exemptions are gone, and extra dollars no longer pull other retirement income into tax.

• For conversions below the lines, the IRA exemption starts from taxable IRA distributions on federal Form 1040 line 4b, where Form 8606 also reports a taxable conversion. The Department of Revenue Services (DRS) hasn't issued conversion-specific guidance, so confirm the treatment before relying on it.
• RMDs, once they start at 73 or 75, can push AGI over a line every year. QCDs count toward the RMD and stay out of AGI.
• If you are moving soon, note that federal law bars a state from taxing a nonresident's retirement income (4 U.S.C. §114). A conversion made after you've genuinely changed domicile and stopped being a Connecticut resident therefore isn't Connecticut income.

A worked example: a Darien couple weighs a conversion

A hypothetical married couple in Darien, both 74, receive $60,000 of Social Security, a $30,000 pension, and a $20,000 IRA RMD. Federally, $36,600 of their Social Security is taxable, so federal AGI is $86,600. Because that is under $100,000, Connecticut exempts all of it, and they owe no Connecticut income tax. They are now considering a Roth conversion:

Each converted dollar also makes 85 cents more of their Social Security federally taxable, so AGI rises $1.85 per dollar converted, leaving only about $7,200 of room. Even if the $7,000 conversion weren't exempt, it would fall within their $24,000 personal exemption.

In the $50,000 row, federal AGI of $151,000 is past the cliff and the end of the phase-out, so the pension and all $70,000 of IRA income are taxable. Taxable Social Security rises to $51,000, of which Connecticut taxes 25% of benefits, or $15,000. Connecticut AGI is $151,000 minus the $36,000 of Social Security it exempts, or $115,000, which is too high for the personal exemption or personal tax credit. The tax is $4,825 from the rate schedule plus a $150 phase-out of the 2% bracket, less a $75 property tax credit, since their income cuts the $300 credit by 75%. The total is $4,900.

That tax equals 9.8% of the amount converted, while the next $50,000 adds only $3,175, or 6.35%. The dollars that cross the line carry the highest state cost. Federal tax and Medicare IRMAA change as well, so model them together.

Their home is assessed at $1,120,000, which is 70% of a $1.6 million appraisal. At Darien's FY2027 mill rate of 16.05, the property tax is $17,976 before any special tax district.

Property tax relief for retirees

Statewide relief is modest: an income tax credit of up to $300, plus the Circuit Breaker credit for lower-income homeowners who are 65 or older or disabled. Towns may add their own programs.

• The property tax credit is worth up to $300 per return for property tax on your home and car, or two cars on a joint return. It phases out above $70,500 of Connecticut AGI joint and $49,500 single, ends above $130,500 and $109,500 respectively, and is nonrefundable.
• Under the Circuit Breaker program, homeowners 65 or older, or totally disabled, qualified for up to $1,000 off their bill if single or $1,250 if married, provided their 2025 income, including Social Security, was no more than $46,300 unmarried or $56,500 married. Applications go to the town assessor between February 1 and May 15 each year, and OPM adjusts the limits annually.
• Towns may also offer their own senior relief under CGS §12-129n, with their own limits.
• Starting with the October 1, 2027 grand list, a 2026 law lets towns offer a $50,000 homestead exemption on primary residences.

Fairfield County mill rates

Connecticut has no county government, so each town sets its own rate. Tax equals assessed value times the mill rate, divided by 1,000. Assessed value is 70% of market value. The table shows Office of Policy and Management (OPM) rates for FY2027, which runs from July 1, 2026 to June 30, 2027 and uses the October 1, 2025 grand list:

Stamford and Norwalk tax by district, so use the rate on your own bill. Special tax districts in several towns add a modest amount on top.

How Connecticut's estate and gift tax works

Connecticut taxes estates above $15 million for 2026 at a flat 12%, with no portability between spouses, a separate gift tax, and a $15 million cap on total tax. Every resident's estate files a return, even when nothing is owed.

• The exemption is the federal basic exclusion amount, $15 million for 2026 deaths and gifts. By statute it follows the federal $15.48 million for 2027, although DRS hasn't published 2027 forms yet.
• Connecticut has no portability, so a surviving spouse can't use the first spouse's unused Connecticut exemption. For couples above $15 million combined, ask your estate attorney about a credit-shelter trust at the first death.
• Taxable gifts since 2005 use the same $15 million exemption and are added back into the taxable estate. Any Connecticut taxable gift requires Form CT-706/709, due April 15 of the next year, even if no tax is due.
• Combined Connecticut estate and gift tax can't exceed $15 million.
• A nontaxable estate files Form CT-706 NT with the Probate Court, not DRS, within six months of death. Taxable estates file Form CT-706/709 with DRS and a copy with the court.

Consider a hypothetical Greenwich widow who dies in 2026 with an $18 million Connecticut taxable estate. Her late husband left everything to her, and his executor elected portability, so his unused federal exclusion covers her estate federally. Because Connecticut has no portability, it taxes the $3 million above her own exemption at 12%, for a tax of $360,000.

What Connecticut examines when you move to Florida

You stop being a Connecticut resident when you change your domicile and, if you keep a home here, spend no more than 183 days in the state. The burden of proving the change is on you, and later on your estate.

• Domicile is the place you intend as your permanent home. It continues until you move with a genuine intention of making a new place permanent, and selling the old house doesn't prove the change by itself.
• A Florida declaration of domicile (Fla. Stat. §222.17) and voter registration help, but they don't control. DRS's regulation says declarations aren't conclusive when your conduct contradicts them.
• Someone domiciled elsewhere who keeps a permanent place of abode here is a resident for any year with more than 183 days in the state. Any part of a day counts, except passing through, and you need records to prove the count.
• If your domicile stays here, you're a resident unless you keep no Connecticut home, have one elsewhere, and spend no more than 30 days in the state.
• DRS weighs factors including where you vote, your driver's license and car registrations, what happened to your former home, your most active bank account, doctors and attorneys, clubs, place of worship, mailing address, and how your time is split. A furnished Greenwich or New Canaan house, with the clubs, doctors, and checking account still in Connecticut, is the kind of conduct that can outweigh a Florida declaration.
• For estate tax, every decedent is presumed to have died a Connecticut resident, and the estate must prove otherwise (CGS §12-391(h)). A nonresident estate above the exemption still owes tax on the share tied to Connecticut real estate and tangible property.
• In the year you move, file a part-year resident return. Income that accrued before the move belongs to the resident period.

Common mistakes

1. Treating Connecticut's retirement exemptions as universal, when they depend on federal AGI.
2. Crossing the $100,000 or $75,000 line with a conversion, gain, or withdrawal that could have been timed differently.
3. Expecting the $6,000 senior deduction to reduce Connecticut tax.
4. Relying on federal portability for the Connecticut estate tax, or skipping Form CT-706 NT because no tax is due.
5. Declaring Florida domicile while your life, and more than 183 days, stay in Connecticut.
6. Using a single town mill rate in Stamford or Norwalk instead of your district rate.

How Summer Associates helps

Summer Associates projects federal and Connecticut tax together when you size conversions, RMDs, and QCDs, prepares Connecticut income, estate, and gift tax returns, and works with your estate attorney on the state filings an estate requires.

This guide is general education based on federal and Connecticut law as of 2026-11-15. State rules differ and facts matter. Before acting, get advice for your situation from Summer Associates or another qualified advisor.