Estate Tax Connecticut 2026: Exemption, Rates & Strategies

Who Owes Connecticut Estate Tax?

The $13.99 Million Per-Person Exemption Explained

• The exemption is a
• — it applies to the combined total of lifetime taxable gifts plus assets at death. Lifetime gifts above the annual exclusion ($19,000 per recipient in 2026) reduce the available exemption at death.
• The exemption applies per person. A single individual has one $13.99M exemption. A married couple has two — but only with proper planning (portability or credit shelter trust structures).
• The exemption is
• at death — unused exemption can pass to a surviving spouse only via portability (an election made on the deceased spouse
• The exemption applies to BOTH federal and Connecticut estate tax simultaneously. There is no separate state exemption.

Connecticut Estate Tax Rate: 12% Flat (with $15M Cap)

Federal Estate Tax Coordination

• Taxable estate: $25,000,000
• Less exemption: -$13,990,000
• Amount subject to tax: $11,010,000
• Federal estate tax: $11,010,000 × 40% = $4,404,000
• Connecticut estate tax: $11,010,000 × 12% = $1,321,200
• Total estate tax: $5,725,200 (effective rate: 22.9% of gross estate)

Portability for Married Couples

• Both spouses must be U.S. citizens (or planning around the non-citizen spouse rules using a Qualified Domestic Trust).
• The deceased spouse
• Connecticut adopted portability for state estate tax purposes effective for deaths after January 1, 2023, so the same election covers both federal and Connecticut DSUEA.

Connecticut Gift Tax (Now Merged with Estate Tax Exemption)

• Annual exclusion: $19,000 per recipient per year (2026 federal limit; CT follows federal). Gifts at or below this amount are not reported and do not reduce lifetime exemption. Married couples can elect
• to give $38,000 jointly per recipient.
• Lifetime exemption: $13.99M (matches estate tax exemption). Gifts above the annual exclusion reduce this lifetime exemption dollar-for-dollar.
• Connecticut gift tax rate: 12% flat above the exemption (matches estate tax rate).
• Federal gift tax rate: 40% above the exemption.
• Gift tax return: Federal Form 709 required for any gift above the annual exclusion. Connecticut Form CT-706/709 covers both estate and gift tax filings.
• Medical and tuition payments: unlimited and not counted against annual exclusion if paid directly to the medical provider or educational institution. Grandparents paying college tuition directly to UConn or Yale do not reduce annual exclusion or lifetime exemption.
• 529 plan contributions: can be
• with 5 years of annual exclusions in one year ($95K per recipient in 2026, or $190K from a married couple).

CT-706 Filing for ALL Connecticut Estates

• Form CT-706 NT (No Tax): filed for estates where the Connecticut taxable estate is at or below the exemption. Filed with the local Probate Court, not the Department of Revenue Services. Used to formally document that no tax is owed.
• Form CT-706/709: filed for estates where the Connecticut taxable estate exceeds the exemption, OR where there are taxable gifts in the year of death. Filed with the Connecticut Department of Revenue Services AND a copy to Probate Court.

The 2026 Sunset Question: Will the Exemption Drop?

7 Estate Tax Planning Strategies for Connecticut Families

Strategy 1: ILIT — Irrevocable Life Insurance Trust

Strategy 2: GRAT — Grantor Retained Annuity Trust

Strategy 3: IDGT — Intentionally Defective Grantor Trust

Strategy 4: QPRT — Qualified Personal Residence Trust

Strategy 5: CLAT — Charitable Lead Annuity Trust

Strategy 6: CRT — Charitable Remainder Trust

Strategy 7: Dynasty Trust + GST Planning

Annual Gifting Strategy (For Every CT High-Net-Worth Family)

Three Connecticut High-Net-Worth Scenarios

Scenario 1: $8M Estate, Married Couple, West Hartford

Scenario 2: $25M Estate, Widowed 70-Year-Old, Greenwich

Scenario 3: $75M Estate, Business Owner Couple, Stamford

Critical 2026-2027 Deadlines for CT Estate Planning

• March 15, 2026 — partnership and S-corp tax returns due (relevant for valuation of business interests).
• April 15, 2026 — gift tax returns (Form 709) for 2025 gifts due.
• December 31, 2026 — final deadline to make lifetime gifts using the current $13.99M exemption if exemption sunsets January 1, 2027.
• Every year — review beneficiary designations on all retirement accounts and life insurance.
• Every 3-5 years — review estate plan and trust structures with attorney.
• Every 5-10 years — formally restate trusts to reflect current tax law and family changes.
• Within 9 months of any death — federal Form 706 filing (with 6-month extension available).
• Within 6 months of any death — Connecticut Form CT-706/709 filing (with 6-month extension available).
• Within 12 months of any death — late portability election available for non-taxable estates under Rev. Proc. 2022-32 (5-year window).

Top 10 Connecticut Estate Tax Planning Mistakes

• Failing to elect portability at first spouse
• Failing to file CT-706 NT for non-taxable estates — required filing regardless of size; $25-$250 penalty per estate.
• Holding large life insurance policies personally instead of in an ILIT — exposes death benefit to 12% CT + 40% federal estate tax.
• Waiting too long to fund irrevocable trusts — once cognitive decline begins, planning capacity is questioned.
• Funding a GRAT or QPRT and dying during the term — entire benefit lost if grantor doesn
• Failing to use annual exclusion gifts — leaves $150K-$400K per year of tax-free transfer capacity unused.
• Naming the estate as beneficiary of retirement accounts — defeats tax-efficient stretch and exposes to creditors.
• Forgetting GST exemption allocation when funding dynasty trusts — wastes exemption that cannot be recovered.
• Using out-of-state estate planning for Connecticut assets — Connecticut-specific tax rules and Probate Court procedures require Connecticut counsel.
• Procrastinating on 2026 gifting opportunities — anti-clawback regulations make current exemption use safe, but only if completed before any potential sunset.

Connecticut Estate Tax FAQ

What is the Connecticut estate tax exemption in 2026?

Does Connecticut still have a separate gift tax?

Do I have to file a Connecticut estate tax return if no tax is owed?

What is portability and why does it matter?

Will the federal estate tax exemption drop in 2027?

How much does CT high-net-worth estate planning cost?

Series Complete: Coordinate Your CT Estate Plan With Insurance

Frequently Asked Questions