Connecticut tax cuts: Over 1 million taxpayers affected in 2024 - what you need to know
Internal Revenue Service 1040 Individual income tax forms for 2021 arranged in Louisville, Kentucky, U.S., on Tuesday, April 12, 2022. Refund sizes in some cases have been up by nearly 25% compared with last year due to pandemic relief programs and r
Residents of Connecticut should know about changes to the state's tax policy that went into effect on January 1, 2024.
Connecticut is reducing its tax rates for low- and middle-income residents while keeping its highest marginal rate unchanged.
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The result of a state budget signed into law last summer, the changes enacted will see a decrease in the two lowest rates:
- The 3% rate on the first $10,000 earned by single filers and the first $20,000 by joint filers will drop to 2%.
- The 5% rate on the next $40,000 earned by single filers and the next $80,000 by joint filers will drop to 4.5%.
- The relief is targeted toward middle-class tax filers and is capped at $150,000 for single filers and $300,000 for joint filers.
The reduction should affect over 1 million taxpayers in the state.
"We enacted these tax relief measures to provide broad-based tax relief to those who need it, specifically middle-income workers, low-income workers, and seniors," Governor Lamont said in a statement. "These tax cuts are possible due to the fiscal discipline that we’ve implemented over the last five years, which has stabilized the state’s fiscal house and ended a trend of too many years of deficits and uncertainty."
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As a result, anyone earning less than $150,000 as an individual or $300,000 as a couple will see a tax cut.
The Connecticut Earned Income Tax Credit (EITC) for low-income workers is also increasing from 30.5% to 40% of the federal EITC, giving the state an extra $40M in state tax credits to the roughly 211,000 filers who receive the credit.