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.
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).
- 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
- ← Step 7
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:
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.
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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.
Connecticut LLC Taxes — FAQ
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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From naming your LLC to understanding your tax bill, you now have everything you need to form and run a Connecticut LLC with confidence. Bookmark this guide — you'll likely come back to it as your business grows.