Credits and breaks for Connecticut families: the 40% EITC, and not much else

For a Connecticut family above the earned income credit range, children do not appear on Form CT-1040 at all. The return starts from federal adjusted gross income, so the federal child tax credit, the dependent care credit and the education credits, all of which reduce federal tax below the AGI line, never reach it. Connecticut’s personal exemption is $15,000 single, $19,000 head of household or $24,000 joint regardless of how many people the household feeds, and it is gone by $44,000, $56,000 or $71,000 of Connecticut AGI anyway. The one family-specific item is the Connecticut earned income tax credit: 40% of the federal credit, refundable, plus $250 for any eligible filer with a qualifying child. For a working single parent that can be more than $3,000 back. For a two-earner couple at $90,000 with two children, the children change nothing; the return is the same as a childless couple’s.

That is not an accident of drafting. Connecticut’s help for low-income families runs through the earned income credit and the personal tax credit, which refunds up to 75% of the tax at the lowest incomes, rather than through per-child exemptions. The permanent child tax credit the Governor and legislative leaders proposed in 2025 and again in 2026, $600 per child capped at $1,800, did not pass either year. The one-time $250-per-child rebate of 2022 was just that.

The Connecticut earned income tax credit

The Connecticut EITC is a percentage of the federal credit, claimed on Schedule CT-EITC and attached to Form CT-1040. If the federal credit is $7,316, the 2026 maximum for a family with two children, the Connecticut credit is $2,926, and because there is a qualifying child another $250 is added, for $3,176. The credit is refundable: it is paid out in full even when the Connecticut tax is zero, which for most families who qualify it is.

The federal maximums are the 2026 figures; the Department has published only the 2025 Connecticut maximums ($260, $1,731, $2,861 and $3,218 before the $250), so the 2026 state figures above are arithmetic and should be checked against the 2026 Schedule CT-EITC when it appears. The $250 was added by a 2025 act for tax years beginning in 2025 and has no end date in the act (verify).

The rules follow the federal credit, with three Connecticut additions. The filer must be a full-year Connecticut resident; a part-year resident or nonresident gets nothing, even for the months in the state. The filer must actually have claimed the federal EITC, so a family that is eligible but skips the federal credit skips the state one too. And everyone on the claim, the filer, a spouse on a joint return and each qualifying child, must have a Social Security number valid for employment by the due date of the return; a filer with an ITIN is out. The federal income and investment-income limits carry over automatically, since the state credit is a percentage of the federal one. The Department reviews Connecticut EITC claims closely, and self-employed claimants are sent Form CT-EITC SEQ, a questionnaire about the business, before the credit is paid.

The $250 bonus is a flat amount, not a percentage, so it matters most at the edges of the federal credit: a filer whose federal credit has phased down to $300 gets $120 from the 40% and $250 from the bonus. One qualifying child is enough; a second adds nothing to the $250.

Head of household

Connecticut uses the federal filing status, and for a single parent the head-of-household status carries more weight on the state return than on the federal one. The exemption is $19,000 instead of $15,000 and begins to phase out at $38,000 of Connecticut AGI instead of $30,000, disappearing at $56,000 rather than $44,000. The brackets are 60% wider: the 2% rate runs to $16,000 rather than $10,000, and the 4.5% rate to $80,000 rather than $50,000. The personal tax credit keeps its 75% rate to $24,000 of Connecticut AGI instead of $18,800 and does not end until $78,500 instead of $64,500. The property tax credit stays at its full $300 to about $54,500 (verify). A single parent earning $50,000 pays about $1,380 of Connecticut tax before the property tax credit as head of household and about $1,800 as a single filer, a difference of some $420 a year from the status alone.

The status is decided by federal rules: unmarried, or treated as unmarried, at year end; more than half the cost of keeping up a home; and a qualifying person who lived there more than half the year. The federal article Head of household covers the tests. Whichever parent claims the child federally claims the Connecticut EITC bonus too; there is no splitting.

Dependents: information only

Schedule CT-Dependent, filed with the CT-1040, lists each dependent’s name, Social Security number, date of birth and relationship. It changes nothing on the return; the Department uses it to check EITC claims (verify). A dependent adds no exemption. Two parents with four children and a single person at the same income get the same $24,000 or $15,000.

Child care

Connecticut has no child and dependent care credit. The federal credit, enlarged for 2026 by the 2025 federal law, reduces federal tax only. A dependent care flexible spending account at work does help here, because the $5,000 excluded from wages never enters federal AGI and so never enters Connecticut AGI; at 4.5% that is $225 of state tax saved on top of the federal saving. The state’s one child-care item on the 2026 return is on the provider’s side: the owner of a state-licensed family child care home may claim a refundable credit of $500 per home, new for tax years beginning in 2026.

529 plans: the CHET subtraction

Contributions to CHET, the Connecticut Higher Education Trust 529 plan, are subtracted from federal AGI on Schedule 1 and Schedule CT-CHET: up to $5,000 a year on a single return and $10,000 on a joint return, with any excess carried forward for five years. Out-of-state 529 plans do not qualify. The subtraction is worth the contributor’s marginal Connecticut rate, 4.5% to 6.99%, so a $10,000 joint contribution saves $450 to $699, and because it reduces Connecticut AGI it can also pull a household back toward the exemption, personal-credit or property-tax-credit lines. Grandparents and other relatives who file Connecticut returns can take the subtraction on their own contributions to a child’s CHET account.

Withdrawals follow the federal definition of qualified expenses, now including K-12 tuition up to the federal limit and the other uses the 2025 federal law added (verify). A nonqualified withdrawal of money that was deducted in an earlier year is added back on Schedule 1. Employers who contribute to an employee’s CHET account have a credit of their own, 25% of the contribution up to $500 per employee, enacted in 2025.

Education

Connecticut offers no tuition deduction or credit of its own, and the federal American Opportunity and Lifetime Learning credits, taken against federal tax, do not touch the state return. What flows through is anything that reduces federal AGI: the student loan interest deduction and the educator expense deduction both lower Connecticut tax as well as federal. A student who is a Connecticut resident and works part time files like anyone else, with the $15,000 exemption, and usually gets back whatever was withheld.

What the 2025 federal law did and did not change here

The 2025 federal law raised the child tax credit to $2,200, created deductions for tips and overtime, and opened new accounts for children. Of these, only the items that change federal AGI matter in Connecticut. The child tax credit and the tips and overtime deductions do not; they sit below the line, so a Connecticut family keeps paying state tax on tips and overtime at the full rates. A 2026 bill to exempt tips and overtime from Connecticut tax was referred to committee and did not pass. Contributions to the new children’s savings accounts are expected to follow federal treatment through AGI (verify).

Coming in 2027

A family caregiver credit, 50% of eligible expenses up to $2,000 for a filer caring for a relative, nonrefundable and limited to federal AGI under $50,000 single or $100,000 joint, was enacted in 2026 for tax years beginning in 2027. It is not on the 2026 return. Whether the 2027 session takes up the child tax credit again depends on the governor and legislature elected this November.