Connecticut Estate Tax

If you're a resident of Connecticut and leave behind more than $12.92 million (for deaths occurring in 2023), your estate might have to pay Connecticut estate tax. The Connecticut tax is different from the federal estate tax, which is imposed on estates worth more than $12.92 million (for deaths in 2023). If your estate is worth more than the exemption, you may owe both state and federal estate tax.

Prior to 2023, Connecticut's estate tax exemption was lower than the federal exemption. So for deaths before 2023, even if an estate isn't large enough to owe federal estate tax, it might still owe Connecticut estate tax.

And it's not just state residents who might owe Connecticut estate tax. If you're a nonresident but own real estate or other tangible assets (a boat or plane, for example) located in Connecticut, your estate will probably also need to file a Connecticut estate tax return.

Will Your Estate Need to File a Connecticut Estate Tax Return?

Connecticut differs from most other states with a state estate tax in that it requires nearly everyone to file a state estate tax return. In other words, regardless of how much property you leave behind, the personal representative or executor of your estate will need to file the Connecticut estate tax return, CT-706. Estates over $12.92 million will need to file the tax return with the Connecticut Department of Revenue Services, while estates smaller than that will need to file the return with the Connecticut Probate Court. But just because your estate must file a tax return does not mean that it will owe estate tax. (See below.)

Will Your Estate Owe Estate Tax?

If the taxable estate of a Connecticut resident has a value of more than $9.1 million, it will owe estate tax, and the personal representative of the estate must file CT-706 with the Connecticut Department of Revenue Services. Generally, your taxable estate is equal to your "gross estate" minus any deductions your estate is allowed to take.

Your gross estate will include just about all of the property you own at your death:

• Real estate
• Bank and investment accounts—retirement and non-retirement
• Vehicles and other items of personal property
• Proceeds from any life insurance policies on your life, if you owned the policies
• Your business interests (sole proprietorship, limited liability company, or closely held corporation)
• Any property you hold in a revocable living trust

Your estate might be able to take certain deductions, such as:

• Marital deductions. Property left to a surviving spouse, no matter the amount, can be deducted from the gross estate.
• Charitable deductions. Gifts to qualified public, charitable, and religious organizations can be deducted from the gross estate.
• Debts and administration expenses. Debts owed and some administration expenses (funeral costs and attorney's fees, for example) can be deducted from the gross estate.

Co-ownership. If you own assets with someone else, generally only your share will be included in your estate. In other words, if you and your spouse own your house, half of its value would be included in your estate.

Non-probate assets. Notably, your gross estate also includes non-probate assets. For example, the property you hold in a revocable living trust avoids probate, but it does not avoid estate taxes, and is counted in your gross estate.

Portability. The federal estate tax regime allows a surviving spouse to use the deceased spouse's unused portion of the exemption—a feature called "portability." However, Connecticut's estate tax does not offer portability between spouses; each spouse has a separate exemption amount of $9.1 million.

What Is the Connecticut Estate Tax Rate?

If your estate owes estate tax, how much will it actually owe? In Connecticut, the tax rate for deaths prior to 2023 ranged from 10.8 to 12% depending on the size of the estate. Starting in 2023, the Connecticut estate tax is a flat-rate tax of 12%. (Compare these rates to the current federal rate of 40%.) See the Connecticut statute for the exact estate tax rates.

Deadlines for Filing the Connecticut Estate Tax Return

A Connecticut estate tax return must be filed after your death, regardless of the size of your estate. It will be your executor's responsibility to file either Form CT-706 (for taxable estates) or CT-706 NT (for nontaxable estates). Both the return and any tax owed are due six months after the death. Downloadable estate tax returns and instructions are available from the Connecticut Department of Revenue Services, but your executor will likely require expert help. Your executor can hire an experienced lawyer or CPA and pay the fee from your estate's assets.

For more on estate planning issues specific to Connecticut, see Nolo's section on Connecticut Estate Planning.