You need to prepare your federal income tax return before you can start preparing the state tax return. Connecticut state use the Federal Adjusted Gross Income (AGI) as the basis for calculating the state taxable income. The Federal AGI is adjusted for the state income additions, tax deductions, tax credits and state exemptions to figure out the state taxable income. Connecticut follow the Joint filing system for married filing joint taxpayers, and the incomes of both spouses are added together and taxed as a single amount. You can find below the major differences between the tax treatement of various taxes by Fedeal and State Taxes.

Interest/Divident Income: Interest and Divident income from U.S. government bonds are exempt from State Taxes.

Rent Income: Same as federal.

Capital Gain: Gains/losses from the sale of Connecticut state and local bonds are subtracted/added back.

Unemployment Income: Same as federal

Social Security Benefits: Exempt if income is below $50,000 ($60,000 MJ/HH); partially taxable if higher income.

State Bond Interest: Taxable except Connecticut obligations.

Health Savings Accounts: Same as federal.

Disability: Same as federal.

Lottery: Same as federal.

Federal Income Tax: Not deductible.

Other Taxes: Exemptions for distributions from Connecticut higher education trust fund and interest on Connecticut individual development accounts. Modifications (add or subtract) for Connecticut fiduciary adjustment.

Check other state tax links below.