Connecticut income tax rates range from 3% to 6.99%. While 6.99% is the published “maximum,” you may find yourself paying a much higher marginal rate. A marginal tax rate is the amount you pay on an additional dollar of income. So, how can you pay more than the Connecticut maximum of 6.99%? Check out the table below. This shows what happens if you file “Married Filing Jointly” and your income increases in $1,000 increments between $93,000 and $104,000 (it also applies to other filing methods at different income amounts).
You start off paying the published rate of 4.5% but then it something happens. Because you lose your exemption, you will be taxed by the state of Connecticut at an 8.9% rate for the extra $1,000 of income above $96,000. But it gets worse. The rate keeps going up until you’re paying 14.1% on income between $100,000 and $101,000. Above $102,000, you go back to paying the published rate.
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