Here's a quick look at some of the important Connecticut state income and Connecticut estate taxes:
Individual Income Tax
Connecticut has a state income tax, structured as a progressive tax on income. Connecticut income tax rates range from 2% - 6.99%.
Estate Tax
Connecticut imposes an estate tax. Connecticut's estate tax exemption is $13,990,000 in 2025. The estate tax base is the sum of taxable gifts (under Connecticut law) made by the decedent since January 1, 2005, and the decedent’s taxable estate (as determined for federal estate tax purposes). Currently, a flat 12% rate applies only to the portion of the estate that exceeds the exemption amount. Connecticut imposes a maximum combined estate and gift tax of $15 million. For married couples, Connecticut does not currently allow a surviving spouse to use the deceased spouse's unused portion of the state's estate tax exemption. This differs from federal law, which does permit portability.
Generation Skipping Transfer Tax (GST Tax)
Connecticut imposes a GST tax equal to the maximum credit allowed under IRC Sec. 2604 for paid state GST tax. However, the current federal tax code does not permit a credit for paid state GST tax. Therefore, there is no current GST tax.
Gift Tax
Connecticut imposes a gift tax. Connecticut taxable gifts are those federal taxable gifts that are gifts of real or tangible personal property situated within Connecticut, and, for donors who are Connecticut residents, gifts of intangible personal property. All donors are required to file a return to report Connecticut taxable gifts even though no gift tax may (or may yet) be payable. No gift tax is payable until the sum of Connecticut taxable gifts made since January 1, 2005, exceeds $13,990,000 in 2025. The gift tax rate is currently 12%.
Connecticut imposes a maximum combined estate and gift tax of $15 million.
Will Creation
The minimum age of a person competent to make a will is 18. The number of witnesses necessary to execute a will is two.
Uniform Transfers to Minors Act (UTMA)
The original custodial gift may be a life insurance policy or annuity contract.
Custodial property may be invested in or used to pay premiums on (1) a policy on the minor's life if the minor's estate is the sole beneficiary, or (2) a policy on a third party in whom the minor has an insurable interest, if the minor or the custodian is the irrevocable beneficiary.
The custodial arrangement terminates when:
The minor child reaches age 21, or The minor child dies.
Intestacy
The estate goes to the surviving spouse, as follows:
If there are no surviving descendants or parents – 100% of the estate
If the surviving descendants are all also the descendants of the spouse – $100,000 plus 50% of the balance of the estate
If there are surviving parents but no surviving descendants – $100,000 plus 75% of the remaining estate
If there are surviving descendants, at least one of whom is not also a descendant of the spouse – 50% of the estate
If there is no surviving spouse, or if a portion of the estate does not go to the spouse:
100% to surviving descendants and their "representatives" (which in this case appears to mean per stirpes). See Conn. Gen. Stat. §45a‐438 and Daniels v. Daniels, 115 Conn. 239 (1932).
If there is no surviving spouse or descendant:
100% to surviving parent or parents equally
If there is no surviving spouse, descendant or parent:
100% to descendants of parents and their “representatives” (which in this case appears to mean per stirpes). See Conn. Gen. Stat. §45a‐438 and Daniels v. Daniels, 115 Conn. 239 (1932).
If none of the above:
Intestacy laws outline further distribution steps to next of kin and their descendants, and finally to stepchildren and their descendants. See Conn. Gen. Stat. §45a‐439.
If no legally described recipient can be found, estate assets go to the state of Connecticut.
Asset Protection
Non-qualified Annuities: No exemption.
Life Insurance Cash Value: Up to $4,000 exemption if the insured is the owner or person upon whom the owner is dependent.
Life Insurance Proceeds: Exempt from creditors of the insured (unless the beneficiary is the insured’s estate).
Digital Assets: Connecticut follows the Revised Uniform Fiduciary Access to Digital Assets Act to ensure that testators can retain control of their digital property and plan for its ultimate disposition.
For more information or to schedule a complimentary consultation to discuss your financial planning, please email maloi@sfr1.com or schedule a call here.
Source: 2025, PGI Partners, Inc
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