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.
Connecticut Deductions & 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
The Part Connecticut Does Not Do For You
Whatever Connecticut takes, it takes on your net profit — and net profit is just what you earned minus what you can prove you spent. The proving is on you, and it is where most of the money leaks out.
TaxTidy is where the proof lives. Photograph a receipt and it reads the vendor, the amount and the date in about three seconds, then files the expense on its Schedule C line. Nothing gets typed in twice, and nothing depends on you remembering a purchase from eight months ago.
Because Connecticut wants its own return alongside the federal one, the same organized record does double duty — one set of receipts, sorted once, ready for whichever deadline comes first. Your Audit Readiness Score shows you how solid that record is before anyone else asks.
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.
Start Tracking Your Connecticut Business Expenses
Your first 25 scans are on us — free for life, no card required. Enough to sort this quarter's receipts by Schedule C line and see your Audit Readiness Score for the first time.
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