Connecticut Small Business Tax Guide — 2026
Income Tax Rate
3% — 6.99% (progressive)
Sales Tax Rate
6.35% (7.75% on certain luxury items)
Filing Deadline
April 15 (matches federal deadline)
Connecticut Income Tax
Connecticut imposes a state income tax with rates of 3% — 6.99% (progressive). Self-employed individuals, freelancers, and sole proprietors pay this tax on their net business income in addition to federal income tax and federal self-employment tax (15.3%).
Self-Employment in Connecticut
Connecticut taxes self-employment income at progressive rates up to 6.99%. The state also imposes a pass-through entity tax (PET) that can benefit S-Corp and LLC owners.
Estimated Tax Requirements
Quarterly estimated payments required if you expect to owe $1,000 or more. Standard federal due dates apply.
ConnecticutDeductions & Credits
- Connecticut personal exemption and credit system
- Pass-through entity tax election (PET) — can reduce federal SALT cap impact
- Property tax credit up to $300
Business Filing Fees
LLC: $120 formation + $80 annual report. Corporation: $250 formation + $150 annual report.
Key Facts About Connecticut Taxes
- Connecticut's pass-through entity tax lets business owners work around the federal $10,000 SALT deduction cap
- Higher-than-average LLC formation and annual costs
- No local income taxes — only the state rate applies
- Luxury sales tax rate of 7.75% on items like vehicles over $50,000
Track Your Connecticut Business Expenses
TaxTidy helps Connecticut freelancers and self-employed individuals track every business expense with AI-powered receipt scanning. Snap a photo of any receipt and TaxTidy instantly extracts the vendor, amount, and tax category — then maps it to the correct IRS Schedule C line. At tax time, generate an audit-ready PDF report with all your deductions organized and totaled.
Frequently Asked Questions
What is Connecticut's income tax rate for self-employed people?
Connecticut uses progressive rates from 3% to 6.99%. Self-employment income is taxed at these standard rates based on total taxable income.
What is Connecticut's pass-through entity tax?
Connecticut offers a PET election that allows S-Corps and LLCs taxed as partnerships to pay state tax at the entity level. This provides a workaround to the federal $10,000 SALT deduction cap.
When are Connecticut estimated taxes due?
Quarterly on April 15, June 15, September 15, and January 15. Required if you expect to owe $1,000 or more.
Official source: Connecticut Department of Revenue
TaxTidy provides expense organization tools based on the most current US tax law available to it. TaxTidy is not a CPA, Enrolled Agent, or licensed tax professional. All categorizations, deductions, and tax calculations are estimates. Please verify all data for accuracy and consult a certified tax professional before filing.
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