Connecticut Pension Tax Calculator 2025

In Connecticut, most pension income is fully taxable as regular income. This includes distributions from 401(k) plans, traditional IRAs, and most employer pensions. However, some exemptions may apply for certain government pensions and for taxpayers over specific age thresholds. The state follows federal tax treatment for most retirement income.

As of 2025, Connecticut continues to tax pension income as regular income. While there have been legislative discussions about pension tax relief, particularly for retirees, no comprehensive pension tax elimination has been enacted. Some partial exemptions exist for certain types of pensions and age groups. Stay updated with current Connecticut tax law changes.

The taxable portion of your pension depends on how it was funded. If you made pre-tax contributions (like traditional 401(k) or pension plans), the entire distribution is typically taxable. If you made after-tax contributions, only the earnings portion may be taxable. Roth IRA distributions are generally tax-free after age 59½ if the account has been open for at least 5 years.

The tax percentage varies based on your total income and filing status. In Connecticut, you’ll pay both federal taxes (ranging from 10% to 37% depending on income brackets) and state taxes (ranging from 3% to 6.99%). Additionally, if you’re under 65, you may need to pay estimated taxes quarterly. Many pension plans offer voluntary withholding options to help manage your tax obligations.

There is no specific age at which seniors automatically stop paying federal taxes. Tax obligations depend on income levels and filing status, not age alone. However, seniors may qualify for higher standard deductions and may have some Social Security benefits that are not taxable if their overall income is below certain thresholds. For 2025, single filers over 65 get an additional standard deduction of $1,850.

For 2025, a single person over 65 can earn up to approximately $16,550 (standard deduction plus additional senior deduction) without paying federal income tax. For married couples filing jointly with both spouses over 65, this amount is approximately $32,300. However, these amounts can be higher if the income consists of certain types of tax-free sources like municipal bond interest or Roth IRA distributions.