(a) A tax is hereby imposed on (1) all dividends and interest income earned, received in fact or constructively, accrued or credited to the taxpayer during his taxable year except that no such tax shall be imposed unless the taxpayer’s adjusted gross income in such year equals or exceeds fifty-four thousand dollars, in accordance with the following schedule:

Adjusted Gross Income
In Taxable Year

 

Rate of Tax
On All Dividends
And Interest Income

At least $54,000

 

 

but less than $56,000

 

 .75%

At least $56,000

 

 

but less than $58,000

 

 1.5%

At least $58,000

 

 

but less than $60,000

 

 2%

At least $60,000

 

 

but less than $62,000

 

2.75%

At least $62,000

 

 

but less than $66,000

 

 3.5%

At least $66,000

 

 

but less than $70,000

 

 4%

At least $70,000

 

 

but less than $74,000

 

4.75%

At least $74,000

 

 

but less than $78,000

 

5.5%

At least $78,000

 

 

but less than $82,000

 

 6%

At least $82,000

 

 

but less than $86,000

 

6.75%

At least $86,000

 

 

but less than $90,000

 

 7.5%

At least $90,000

 

 

but less than $100,000

 

 8.75%

$100,000 and over

 

9.75%

and (2) at the rate of four and three-fourths per cent on all gains from the sale or exchange of capital assets which have been earned, received in fact or constructively, accrued or credited to the taxpayer during his taxable year subject to the exemptions allowed in § 12-506c, and § 12-506f, when applicable, provided the amount of tax payable by any taxpayer under this subdivision (2) with respect to such gains for any taxable year may not exceed an amount equal to three and four-tenths per cent of the adjusted gross income of such taxpayer for such taxable year, as determined for purposes of the federal income tax.

Terms Used In Connecticut General Statutes 12-506

  • adjusted gross income: means adjusted gross income for the taxable year of any taxpayer as determined for purposes of the federal income tax, but exclusive of any social security or tier 1 railroad retirement benefits included in the taxpayer's total adjusted gross income for such taxable year. See Connecticut General Statutes 12-505
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • dividends: means those dividends taxable for federal income tax purposes without regard to the dividend exclusion, but exclusive of exempt dividends. See Connecticut General Statutes 12-505
  • gains from the sale or exchange of capital assets: means (A) net gain as determined for federal income tax purposes, after due allowance for losses and holding periods, and with respect to any such gain which is earned, received in fact or constructively, accrued or credited to the taxpayer on or after January 1, 1987, but not later than February 8, 1989, deduction of sixty per cent of the excess of the net long-term capital gain for the taxable year over the net short-term capital loss for such taxable year, from (i) sales or exchanges of capital assets or assets treated as capital assets, other than notes, bonds or other obligations of the state of Connecticut or any of the political subdivisions thereof, or its or their respective agencies or instrumentalities, or (ii) from transactions or events taxable to the taxpayer as such sales or exchanges, and being the net amount includable in the taxpayer's adjusted gross income, with respect to all such sales, exchanges, transactions, or events, under the provisions of the internal revenue code in effect for the taxable year, exclusive of any gain or loss from the holding or trading of any dealer equity options, as defined in Section 1256 of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended, and exclusive of any gain or loss of a nonresident taxpayer other than from the sale or exchange of real property located in Connecticut, provided such property is a capital asset or an asset treated as a capital asset or such sale or exchange is a transaction or event taxable as a sale or exchange of a capital asset and (B) net gains from sales or exchanges of certain property, as determined in accordance with Internal Revenue Service Form 4797, exclusive of any such net gain includable under subparagraph (A) in this definition of gains from the sale or exchange of capital assets. See Connecticut General Statutes 12-505
  • interest income: means (A) any interest income taxable for federal income tax purposes, exclusive of any such income with respect to which taxation by any state is prohibited by federal law, less any amounts forfeited to a bank, savings bank, savings and loan association, credit union or other depository institution, wherever located, as a penalty for premature withdrawal of funds from a time savings account, certificate of deposit, or similar class of deposit, and (B) any interest income from obligations issued by or on behalf of any state, political subdivision thereof, or public instrumentality, state or local authority, district, or similar public entity, exclusive of such income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district, or similar public entity created under the laws of the state of Connecticut. See Connecticut General Statutes 12-505
  • taxable year: means the same accounting period as the taxpayer's taxable year for federal income tax purposes or that portion of such year as either commences when the taxpayer becomes a resident or ends when the taxpayer ceases to be a resident of this state. See Connecticut General Statutes 12-505
  • Taxpayer: means (A) a husband and wife both of whom are residents in this state, whether or not they file for the taxable year a single federal income tax return jointly, and (B) each and every other individual who is a resident in this state, who have or has earnings received, credited or accrued in any taxable year from gains from the sale or exchange of capital assets, or from dividends or interest income subject to tax under this chapter and any husband and wife when either of such husband or wife, or both, are not residents in this state and who file for the taxable year a single federal income tax return jointly, and each and every other individual who is not a resident in this state, who have or has earnings received, credited or accrued in any taxable year from gains from the sale or exchange of real property located in Connecticut, provided such property is a capital asset or an asset treated as a capital asset or such sale or exchange is a transaction or event taxable as a sale or exchange of a capital asset. See Connecticut General Statutes 12-505

(b) Any taxpayer whose adjusted gross income in any taxable year is less than fifty-four thousand dollars and whose net gains from the sale or exchange of capital assets in such year do not exceed (1) two hundred dollars in the case of a husband and wife and (2) one hundred dollars in all other cases or any taxpayer whose total tax liability as determined under subsection (a) of this section in respect to any taxable year would be less than ten dollars and any taxpayer who is sixty-five years of age or older and whose adjusted gross income in any taxable year, less any gains from the sale or exchange of capital assets, is less than ten thousand dollars and any taxpayer whose adjusted gross income in any taxable year is below the level at which such taxpayer would be required to file an income tax return under the Internal Revenue Code of 1986 or any subsequent corresponding internal revenue code of the United States, as from time to time amended, shall not be subject to the tax imposed by subsection (a) of this section, and shall not be required to file any return under the provisions of § 12-508, for such year. For purposes of this subsection, in the case of a husband and wife both of whom are residents of this state and who file for the taxable year a single federal income tax return jointly, they shall be considered a taxpayer who is sixty-five years of age or older if either of them is sixty-five years of age or older.

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