Connecticut, and several other states, exempt some or all of federally taxable Social Security income. Connecticut allows taxpayers to exempt all of that income depending on filing status and federal adjusted gross income. A taxpayer can deduct 100% of her federally taxable Social Security benefits if she is:
1. Single or married filing separately and her federal adjusted gross income is less than $50,000, or
2. Married filing jointly or a head of household and her federal adjusted gross income is less than $60,000.
A taxpayer whose federal adjusted gross income exceeds the applicable thresholds can deduct 75% of her federally taxable Social Security benefits.
The Connecticut Office of Legislative Research just released a Research Report of the 41 states with broad-based personal income taxes comparing exemptions for retirement income including state and local pensions, Federal Civil Service Pensions, Military Pensions, Social Security, and Private Pensions.
For the complete report including the chart showing all the states’ exemptions for Retirement Income go to http://www.cga.ct.gov/01r.