This Issues and Insights discusses recent changes to Connecticut’s estate and gift tax.
- Connecticut (CT) is the only state that still imposes a gift tax, which is unified with the Connecticut estate tax in the same way as the federal estate and gift tax system.
- Recent legislation modified the CT tax law, specifically the estate and gift tax.
- We encourage you to consult with your tax advisor to review your estate plan in light of these changes to the CT tax system.
In October, 2017, the Connecticut state legislature passed Senate Bill 1502, and Governor Daniel P. Malloy signed into law the Connecticut State Budget for the period ending June 30, 2019. As part of broader legislation, this Bill modified the Connecticut estate and gift tax. Connecticut is the only state that still imposes a gift tax, which is unified with the Connecticut estate tax in the same way as the federal estate and gift tax system.
Under the Bill, CT’s estate tax exemption increased to $2,600,000 on January 1, 2018 and is slated to increase to $3,600,000 in 2019. Starting in 2020, the Connecticut exemption should equal the federal exemption. Connecticut does not tax gifts of tangible or real property that are sitused outside of the state. Thus, a Connecticut resident may gift his or her out of state tangible or real property with no CT gift tax implications. For a nonresident estate, Connecticut can still levy estate tax on the tangible and real property situated or having situs in the state.
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