DRS: IP 92(4.2), State Tax Tips for Senior Citizens

 

STATE OF CONNECTICUT
DEPARTMENT OF REVENUE SERVICES

450 Columbus Blvd
Hartford CT 06103
 
 
 
 
 
 

 
 

This Informational Publication has been modified and superseded by IP 92(4.3)

IP 92(4.2)

State Tax Tips for Senior Citizens


This informational publication is designed to acquaint you with Connecticut state taxes and to indicate tax advantages that may be available to individuals age 55 or older. IP 92(4.2) has been updated to include changes in state taxes applicable to taxable years beginning on or after January 1, 1994.


INCOME TAX: There is a Connecticut income tax that applies to Connecticut residents and to nonresidents who have income from Connecticut sources. The Connecticut income tax rate is 4.5% of Connecticut taxable income.  To compute your Connecticut taxable income, subtract your personal exemption from your Connecticut adjusted gross income. Maximum exemption amounts are:

$12,000 - single filers (or married filing separately) with adjusted gross income up to $24,000.

$19,000 - head of household with adjusted gross income up to $38,000.

$24,000 - married filing jointly with adjusted gross income up to $48,000.

Exemptions are reduced by $1,000 for every additional $1,000 of adjusted gross income over the maximum exemption amounts.

Personal tax credits of up to 75% are also available depending upon income level.  Beginning in 1995, the personal tax credit structure has been revised.  As a result, the credits will be available to more individuals than in years to 1995.

Income that is taxable for federal income tax purposes is, in general, also taxable for Connecticut income tax purposes. Types of income subject to Connecticut tax include, but are not limited to:

  • Wages
  • Pensions
  • Capital Gains
  • Interest
  • Dividends
  • Annuities
  • Lump sum distributions
  • Social Security benefits*

*  If your social security benefits are not subject to federal income tax, they are, likewise, not subject to Connecticut income tax.  However, if you receive social security benefits that are taxable for federal income tax purposes, you may be able to reduce the portion of  those benefits that are taxable for Connecticut income tax purposes.  Connecticut income taxation of social security benefits for taxable years 1994 and thereafter is limited to 50% of benefits received even if a greater percentage of the benefits is taxable for federal income tax purposes. 

Certain income is not subject to Connecticut income tax. Interest from U.S. government obligations such as U.S. Savings Bonds or Treasury Notes and interest from State of Connecticut bonds or Connecticut municipal bonds are exempt from Connecticut income tax. If a person, age 55 or older, elects the one-time federal exclusion of up to $125,000 in gain from the sale of a principal residence, the same amount of gain is also exempt from Connecticut income tax.


INCOME TAX FILING REQUIREMENTS:

Estimated Tax Returns: If you expect to owe more than $200 in Connecticut income tax for the entire year, after subtracting Connecticut income tax withheld from wages or pension income, you should be making estimated tax payments using Form CT-1040ES, Individual Estimated Income Tax Payment Coupon. The estimated payments are generally made in four  installments:  April 15, June 15, September 15 and January 15.  (Fiscal Year Filers:  follow federal filing dates.)

If you are receiving a pension, you may be able to have Connecticut income tax withheld from your pension payments. Contact your pension payer and ask for Form CT-W4P, Withholding Certificate for Pension or Annuity Payments,  if you would like Connecticut income tax withheld from your payments.  Retired federal civil service employees should complete Form CT-W4CS, Request to Withhold Income Tax From Civil Service Annuity, available from this Department, to initiate withholding from their civil service annuities.

Tax Return: The Connecticut income tax return is due on or before April 15 for the preceding taxable year.


SALES TAX: Although there are no special exemptions from the sales tax for senior citizens, many items and services are not taxed.

Some examples of nontaxable items and services are:

  • Clothing, including shoes, overshoes, adult diapers, etc., when an item costs less than $50;
  • Prescription drugs, eyeglasses, dentures, hearing aids, and batteries;
  • Non-prescription (over-the-counter) drugs that are used internally. This includes: vitamins, minerals, food supplements, pain relievers, laxatives, cough syrups, lozenges, cold and allergy products, diabetic supplies, eye care products, nasal sprays, drops and inhalers, and antacids;
  • Oxygen and oxygen equipment, customized trusses and braces, crutches and wheelchairs;
  • Food purchased in supermarkets. (Beer, wine and all alcoholic beverages are taxable. Candy, gum, soda, carbonated water and non-alcoholic beer and wine are taxable unless purchased with food-stamps);
  • Fuel for heating residences such as oil, gas, kerosene, wood, electricity and coal;
  • Labor for many home repairs and services including plumbing, electrical, refuse removal, and septic cleaning services;
  • Yarn, fabric, thread, buttons, zippers, trim, etc., used to make clothing;
  • Meals provided by special programs that are delivered to homes of elderly persons, such as "Meals on Wheels";
  • Funeral costs of $2,500 or less;
  • Current United States and Connecticut flags;
  • Newspapers and magazines purchased by subscription;
  • Doctor, dentist, medical laboratory, lawyer and travel agent fees;
  • Instruction classes such as: knitting, sewing, dog obedience, music, dance, etc.;
  • Other nontaxable services include: animal grooming and boarding services, laundromat, hair styling, towing, real estate and jewelry appraisal; 
  • Health and athletic club services (on or after January 1, 1995); and 
  • Landscaping and horticultural services, window cleaning, and maintenance services when rendered at the residence of a person eligible in accordance with federal regulations to receive total disability benefits under the Social Security Act.

Discounts:

When senior citizen discount is offered on a taxable item, the sales tax is applied to the discounted price.

Coupons: 

If you must present a manufacturer's coupon to receive the discount, the coupon is considered to be money and you must pay tax on the original price. 

Examples:

Item                                     $3.00                 $3.00
Manufacturer's Coupon            - 0.50                  x 6%
Discounted Price                      $2.50                 $0.18 Tax  

However, when a store coupon is presented to that store, the tax is applied to the discounted price.

Item                                      $3.00                  $2.50
Store Coupon                         - 0.50                    x 6%
Discounted Price                      $2.50                  $0.15 Tax    

The sale of Dine Out cards and Entertainment coupon books is not taxable. However, the free meals received by using such cards or coupons are subject to sales tax using the menu price that would have been paid if it had been purchased without the card or coupon.


SUCCESSION TAX:  For a Connecticut resident, the succession tax applies to all property, except for real property and tangible personal property located outside Connecticut. For nonresidents, it applies only to real property and tangible personal property located in Connecticut. Rates are progressive, beginning at 4.29%.

Transfers to a surviving spouse are exempt. Therefore, if the entire estate passes to the spouse, there is no tax. The class composed of grandchildren, children, parents and grandparents receives a $50,000 exemption. Brothers, sisters, and their descendants receive a $6,000 exemption. All other persons or taxable organizations have a $1,000 exemption.  There is only one exemption per class. In other words, if there is one child, there is one $50,000 exemption. If there are five children, there is still only one $50,000 exemption. Transfers to qualifying charitable, religious, educational, historical, or scientific organizations are tax exempt.


GIFT TAX: In general, residents are taxed on all gifts of intangible property and of real property and tangible personal property located in Connecticut.  Nonresidents are taxed on gifts of real and tangible personal property situated in Connecticut.  Gifts to any particular donee during the calendar year are not subject to the Connecticut gift tax unless the value of all such gifts to such donee during the calendar year exceeds $10,000. For further information concerning the gift tax you may request a copy of IP 94(1), A Guide to the Federal and Connecticut Gift Taxes, from the Department's Forms Unit. 


REAL ESTATE CONVEYANCE TAX: A state real estate conveyance tax is imposed on deeds conveying an interest in realty.  A taxpayer who transfers property for no consideration to his or her spouse or children is exempt from this tax.  A taxpayer receiving elderly property tax benefits is also exempt.


LOCAL PROPERTY TAXES:

Homeowner/Renter Tax Credit: Annual property tax or rent credit is available to residents, age 65 or older, or to a surviving spouse of a previously approved applicant who is age 50 or older.

Veteran Exemption: A varied, annual tax exemption on the assessed value of an owner-occupied dwelling or on a motor vehicle is available to any qualified veteran or surviving spouse.

Contact the local assessor in your town or city hall for details and forms for any of the above.


EFFECT ON OTHER DOCUMENTS:  IP 92(4.1) is superseded by IP 92(4.2). IP 92(4.1) may not be relied upon after the date of issuance of IP 92(4.2).


RELATED FORMS AND PUBLICATIONS:

IP 92(3.3), Personal Taxes
IP 91(1.2), The Connecticut Income Tax:  Supplemental Information for Senior Citizens
IP 92(5.4), Estimated Connecticut Income Taxes


FOR FURTHER INFORMATION: Please call the Department of Revenue Services Research Unit during business hours, Monday through Friday:

  • 1-800-382-9463 (in-state), or
  • 860-297-5687 (anywhere)
  • TTY, TDD and Text Telephone users only may transmit inquiries 24 hours a day, seven days a week by calling 860-297-4911.

FORMS AND PUBLICATIONS: Forms and publications are available 24 hours a day, seven days a week:

  • Internet: preview and download forms and publications from the DRS web site: http://www.ct.gov/drs
  • Telephone: Call 1-800-382-9463 (in-state), or 860-297-5687 (anywhere).

IP 92(4.2)
Issued: 1/3/95
Replaces: IP 92(4.1), Issued 3/29/93