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Connecticut LLC Taxes | LLC School
Connecticut LLC · Step 8 of 8 · Check current official instructions

Connecticut LLC Taxes — Step 8 of 8

The final step: understanding what you'll actually owe. As a default pass-through LLC, your profit flows to your personal return — taxed federally, hit with self-employment tax, and then Connecticut's graduated rate on top. Here's the full picture, with an estimator.

Ahmad AdilWritten by Ahmad Adil, LLC School · Check current official instructions
CT TAX = $
Quick Answer

By default, a Connecticut LLC is a pass-through entity — profits flow to your personal 1040, taxed at federal rates plus 15.3% self-employment tax (Social Security + Medicare). Connecticut then applies its graduated rate (2%–6.99% across seven brackets) starting from your federal AGI — Connecticut has no separate state standard deduction. Multi-member LLCs can also elect the Pass-Through Entity Tax as a SALT-cap workaround. This is entirely separate from the $80 Annual Report (Step 6) and any sales tax (Step 7).

Step 8 — Fast Facts
Default tax status
Pass-through
SE tax rate
15.3%
CT state tax
Graduated, 2%–6.99%
CT tax base
Federal AGI
CT standard deduction
None
Pass-Through Entity Tax
Elective, 6.99%
Previous step
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How a Connecticut LLC Is Taxed by Default

An LLC itself pays no federal income tax — it's a "pass-through" entity by default. Profits flow to the owners' personal returns, where multiple layers of tax apply:

  • Single-member LLCs report profit on Schedule C, attached to the owner's personal Form 1040.
  • Multi-member LLCs file Form 1065 (informational) and issue each owner a Schedule K-1 showing their share of profit.
  • Self-employment tax (15.3%) applies to net profit — this covers Social Security and Medicare, since there's no employer withholding it for you.
  • Federal income tax applies via the standard progressive brackets, after the QBI deduction and standard deduction.
  • Connecticut's graduated tax then applies on top, starting from your federal AGI — Connecticut has no state standard deduction, so the federal deduction and QBI benefit don't carry over to your Connecticut return.

Federal + Connecticut Tax Estimator

Enter your expected net profit to estimate total federal + Connecticut tax as a default pass-through LLC:

Federal + Connecticut Tax Estimator
SE tax + federal brackets + CT graduated brackets
Self-Employment Tax
$0
Federal Income Tax
$0
Total Estimated Tax (Fed + CT, No Sales Tax)
$0
Connecticut taxable income (federal AGI, no CT std. deduction)$0
Connecticut tax (graduated 2%–6.99% brackets)$0
Effective total tax rate0%

Illustrative existing model only: it simplifies federal deductions and Connecticut adjustments and excludes PE Tax, owner credits, SALT itemizing, personal exemptions/credits and several high-income provisions. It does not prepare a tax return or certify total liability. Use the applicable federal and Connecticut instructions for an actual calculation.

The Pass-Through Entity Tax (Elective)

Connecticut’s elective PE Tax is separate from a federal S-corporation election. Eligible partnerships and S corporations must coordinate the annual election, entity tax base, payments and member credits. The 6.99% entity rate does not mean a dollar-for-dollar credit or guaranteed federal savings. Review the current DRS return instructions and each owner’s circumstances. For tax year 2026, the federal itemized SALT deduction limit is $40,400, or $20,200 for married filing separately. The limit phases down above modified AGI of $505,000, or $252,500 for separate filers, with floors of $10,000 and $5,000 respectively. It is not a universal $10,000 cap or a guaranteed deduction. Compare itemizing, owner circumstances and the separate Connecticut PE Tax election using the actual tax-year instructions.

The S-Corp Election Option

An S-corporation election requires eligibility, reasonable compensation, payroll costs and owner-specific analysis. There is no universal profit threshold that establishes savings. Evaluate Connecticut’s separate PE Tax election and owner credits as part of the comparison.

Income tax, the $80 Annual Report and sales/use tax are separate obligations. Sales/use tax can apply to taxable goods or taxable services. Budget and register for the obligations that actually apply.

Ahmad Adil's Take: Connecticut's income tax is more work than a flat-rate state — seven brackets, no standard deduction, and a personal exemption credit that phases out. The self-employment tax is almost always the bigger number people underestimate, so set aside roughly a quarter to a third of your net profit for combined federal, SE, and Connecticut tax as a starting rule of thumb. If your LLC is profitable and multi-member, ask a CPA whether the Pass-Through Entity Tax election makes sense for your situation — the federal SALT-cap benefit can be meaningful for higher earners.
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2026 federal SALT limits and the separate PE election

For tax year 2026, the federal itemized SALT deduction limit is $40,400, or $20,200 for married filing separately. The limit phases down above modified AGI of $505,000, or $252,500 for separate filers, with floors of $10,000 and $5,000 respectively. It is not a universal $10,000 cap or a guaranteed deduction. Compare itemizing, owner circumstances and the separate Connecticut PE Tax election using the actual tax-year instructions. Connecticut’s elective PE Tax is separate from a federal S-corporation election. Eligible partnerships and S corporations must coordinate the annual election, entity tax base, payments and member credits. The 6.99% entity rate does not mean a dollar-for-dollar credit or guaranteed federal savings. Review the current DRS return instructions and each owner’s circumstances.

Official requirements and instructions

Frequently Asked Questions

Connecticut LLC Taxes — FAQ

What is Connecticut's state income tax rate for LLCs?
A graduated rate across seven brackets, from 2% to 6.99%, since a default LLC's profit passes through to the owner's personal return, taxed at Connecticut's individual bracket rates.
Does Connecticut have its own standard deduction?
No. Connecticut uses your federal adjusted gross income (AGI) as the starting point, without a separate deduction. It instead offers a phasing-out personal exemption credit.
Does a Connecticut LLC pay a separate business income tax?
No, not by default. A default LLC is a pass-through entity — profits are taxed on the owner's personal return, not at the entity level, unless the LLC elects the Pass-Through Entity Tax or corporate tax treatment.
What is Connecticut's Pass-Through Entity Tax?
Connecticut’s elective PE Tax is separate from a federal S-corporation election. Eligible partnerships and S corporations must coordinate the annual election, entity tax base, payments and member credits. The 6.99% entity rate does not mean a dollar-for-dollar credit or guaranteed federal savings. Review the current DRS return instructions and each owner’s circumstances. For tax year 2026, the federal itemized SALT deduction limit is $40,400, or $20,200 for married filing separately. The limit phases down above modified AGI of $505,000, or $252,500 for separate filers, with floors of $10,000 and $5,000 respectively. It is not a universal $10,000 cap or a guaranteed deduction. Compare itemizing, owner circumstances and the separate Connecticut PE Tax election using the actual tax-year instructions.
What is self-employment tax?
A 15.3% tax covering Social Security and Medicare, applied to 92.35% of your LLC's net profit. It replaces the payroll taxes an employer would normally withhold and match.
Can I reduce my Connecticut LLC's tax burden with an S-corp election?
Evaluate federal eligibility, reasonable compensation, payroll costs and the owners’ actual circumstances. A federal S election and Connecticut PE Tax election are separate; state entity tax and credits must also be modeled.
Is Connecticut's Annual Report a form of business income tax?
No. The $80 Annual Report is a flat annual filing fee unrelated to profit or income — it's entirely separate from Connecticut's graduated income tax.
Ahmad Adil, founder of LLC School
About the Author
Ahmad Adil

Ahmad Adil is the founder and CEO of LLC School. The tax figures here — the 15.3% self-employment rate, Connecticut's seven-bracket graduated rate on federal AGI, and the elective Pass-Through Entity Tax — reflect current IRS and Connecticut Department of Revenue Services guidance. This is educational information, not tax advice; consult a CPA for your specific situation.

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