How Connecticut taxes retirement income
Connecticut does not tax Social Security benefits. Pensions and 401(k)/IRA withdrawals are partly taxed (there is an exclusion, then the rest is taxed). CT fully exempts Social Security benefits, pension/annuity income (including 401(k), 403(b), 457(b)), and traditional IRA distributions for taxpayers with federal AGI below $75,000 (single/MFS/HoH) or $100,000 (joint). Above those thresholds: Social Security gets a partial deduction such that no more than 25% of benefits is ever subject to CT tax (CT never taxes 100% the way the federal government can); the pension/annuity/IRA deduction instead phases down on a sliding scale to 0% once AGI reaches $100,000 (single/HoH) or $150,000 (joint). IRA distributions specifically were only 25% deductible for tax year 2024 and 75% for 2025, reaching full parity with pension income (100% deductible, same thresholds) starting tax year 2026. Teachers' Retirement System pensions get a separate 50% deduction; railroad retirement benefits and military retirement pay are 100% exempt regardless of income. CGS 12-701(a)(20)(B)(iv),(x),(xvi),(xix),(xxi)-(xxii),(xxviii)-(xxix).
Retirement income tax in Connecticut, at a glance
| Income type | Taxed by Connecticut? |
|---|---|
| Social Security | Yes |
| Pensions | Partially (exclusion applies) |
| 401(k) / IRA withdrawals | Yes |
| Estate / inheritance tax | Estate tax (exemption $15,000,000) |
| Avg. property tax rate | 1.54% of home value |
Does Connecticut tax Social Security benefits?
Yes, Connecticut taxes some Social Security income.
Does Connecticut tax pensions and 401(k) or IRA withdrawals?
Partly. CT fully exempts Social Security benefits, pension/annuity income (including 401(k), 403(b), 457(b)), and traditional IRA distributions for taxpayers with federal AGI below $75,000 (single/MFS/HoH) or $100,000 (joint). Above those thresholds: Social Security gets a partial deduction such that no more than 25% of benefits is ever subject to CT tax (CT never taxes 100% the way the federal government can); the pension/annuity/IRA deduction instead phases down on a sliding scale to 0% once AGI reaches $100,000 (single/HoH) or $150,000 (joint). IRA distributions specifically were only 25% deductible for tax year 2024 and 75% for 2025, reaching full parity with pension income (100% deductible, same thresholds) starting tax year 2026. Teachers' Retirement System pensions get a separate 50% deduction; railroad retirement benefits and military retirement pay are 100% exempt regardless of income. CGS 12-701(a)(20)(B)(iv),(x),(xvi),(xix),(xxi)-(xxii),(xxviii)-(xxix).
For the mechanics of required withdrawals in retirement, see what is an RMD.
Sources
- Connecticut taxation of retirement income (Social Security, pensions, 401(k)/IRA): Connecticut Department of Revenue / Taxation.
- Connecticut estate / inheritance tax: Connecticut tax authority.