Connecticut, Land of Both Estate and Gift Taxes
NOTE: State laws change frequently and the following information may not reflect recent changes in the laws. For current tax or legal advice, please consult with an accountant or an attorney since the information contained in this article is not tax or legal advice and is not a substitute for tax or legal advice.
Connecticut residents, as well as nonresidents who own real estate and/or tangible personal property located in Connecticut, are subject to gift taxes and state estate taxes under the following guidelines.
What is the Connecticut taxable estate?
The Connecticut taxable estate is the sum of (1) the total value of the decedent’s federal gross estate less allowable deductions other than the deduction for state death taxes; and (2) the aggregate amount of Connecticut taxable gifts made by the decedent during his or her lifetime for all calendar years beginning on or after January 1, 2005.
When is an estate subject to the Connecticut estate tax?
If the Connecticut taxable estate as determined above exceeds $2,000,000, then Connecticut estate tax is due and payable on the value of the taxable estate, including the first $2,000,000. Note: For deaths occurring on or after January 1, 2010 and on or before December 31, 2010, the state estate tax exemption was increased from $2,000,000 to $3,500,000.
What Connecticut estate tax forms must be filed?
All estates subject to the Connecticut estate tax must file Form CT-706/709, Connecticut Estate and Gift Tax Return, with the Connecticut Department of Revenue Services, and also file a copy of Form CT-706/709 with the appropriate Connecticut probate court.
Are transfers to a surviving spouse taxable?
Outright transfers to a surviving spouse are not taxable.
For married couples who have used AB Trust planning to reduce federal estate taxes, Connecticut estate tax may be due on the B Trust after the first spouse’s death. A married decedent’s estate is authorized to make an election on Form CT-706/709 to treat property as marital deduction qualified terminable interest property (“QTIP”) only for purposes of calculating the Connecticut estate tax (this is called a “state QTIP election”). What this means is that if the estate is passing to a surviving spouse through an ABC Trust scheme, then the payment of both Connecticut and federal estate taxes can be deferred until after the death of the surviving spouse.
Do Connecticut nontaxable estates have to file any tax forms?
If the sum of the Connecticut taxable estate is $2,000,000 or less for deaths occurring before January 1, 2010 or after January 1, 2011, or $3,500,000 for deaths occurring between January 1, 2010 and December 31, 2010, then no Connecticut estate and gift tax return will be due. However, all Connecticut estates must file Form CT-706 NT, Connecticut Estate Tax Return (For Nontaxable Estates), with the appropriate Connecticut district probate court. Do not file Form CT-706 NT with the Department of Revenue Services. Form CT-706 NT must be filed with the appropriate Connecticut district probate court.
When is the Connecticut estate tax return and any payment required due?
For deaths occurring before July 1, 2009, Form CT-706/709 for the Connecticut estate tax is due within nine months after the date of the decedent’s death unless an extension of time to file is requested.
For deaths occurring on or after July 1, 2009, Form CT-706/709 for the Connecticut estate tax is due within six months after the date of the decedent’s death unless an extension of time to file is requested.
Use Form CT-706/709 EXT, Application for Estate and Gift Tax Return Filing Extension and for Estate Tax Payment Extension, to apply for an extension of time to file.
Payment of the Connecticut estate tax is due at the same time as Form CT-706/709 unless an extension of time to pay has been granted.
Where is the Connecticut estate tax return filed?
Mail the Connecticut estate tax return, Form CT-706/709, and all other required forms to:
Department of Revenue Services
P.O. Box 2978
Hartford, CT 06104-2978
Do not mail your Connecticut nontaxable estate return, Form CT-706 NT, to the Department of Revenue Services. Instead, this form gets filed with the appropriate Connecticut district probate court. What is the Connecticut estate tax rate?
The Connecticut estate tax rate is a progressive one that starts with 5.085% of the first $100,000 over the $2,000,000 threshold and rises to 16% for the amount above $10,100,000.
Where can I get more information about Connecticut estate taxes?
For more information on Connecticut estate taxes, refer to Connecticut Estate Tax Resources From the Department of Revenue Website.
What about other states that collect estate taxes or inheritance taxes?
For information about other states that collect estate taxes, refer to the State Estate Tax and Exemption Chart.
For information about state inheritance taxes, which are different from state estate taxes, refer to the State Inheritance Tax Chart.
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