Key Takeaways

  • The Connecticut corporate income tax rate in 2025 remains at a flat 7.5% for most C corporations, with a surtax applying to larger companies.
  • Businesses must file Form CT-1120 annually and pay at least a $250 minimum tax, even with no income.
  • The business entity tax (BET) was repealed in 2020, but certain businesses still have ongoing filing obligations.
  • Pass-through entities (PTEs) such as partnerships and S corporations are subject to a separate Connecticut PTE tax.
  • Connecticut offers tax credits and incentives for certain industries, including R&D, job creation, and investments.
  • Businesses must comply with strict due dates and electronic filing rules to avoid penalties.

The Connecticut corporate tax rate is levied against the gross taxable income of any business or corporation registered in or doing business within the state. Also known as a corporation business tax, this tax is similar to personal income taxes and must be filed annually.

About the Connecticut Corporate Tax Rate

Corporate income tax in the U.S. is usually a flat rate and averages from 4 to 10 percent of the business's income. At 9 percent, Connecticut currently has the sixth highest corporate income tax rate in the United States.

Even if your business makes no money, the state requires a minimum payment of $250 annually when filing the state business tax return.

Connecticut Corporate Income Tax Rate 2025 Overview

As of 2025, the Connecticut corporate income tax rate is 7.5%, applied to the net income of C corporations doing business in the state. However, corporations with over $100 million in gross income may be subject to a temporary 10% surtax, which has been extended through at least 2025. This brings the effective rate to 8.25% for qualifying businesses.

Corporations must also pay the greater of the calculated corporate tax liability or the $250 minimum tax. Net income is determined after accounting for allowable deductions and apportionment for multistate businesses.

What Is the Business Entity Tax?

Connecticut assesses a business entity tax (BET) on any limited liability company other than C corporations, including:

  • Limited partnerships
  • Limited liability partnerships
  • Limited liability companies (LLCs)
  • S corporations

This tax has a flat rate of $250 for each taxable year and is assessed every two years. The due date varies depending on the business's tax year.

Repeal of the Business Entity Tax (BET)

The Business Entity Tax (BET), once applicable to S corporations, LLCs, LPs, and LLPs, was repealed for tax years beginning on or after January 1, 2020. However, entities previously subject to BET still need to file certain forms and maintain good standing with the Connecticut Department of Revenue Services (DRS). Businesses should ensure they remain compliant with any remaining administrative or informational filings.

How Are Corporations Taxed?

  • Sole Proprietorship: Any business income is distributed to the sole proprietor, who then reports the federal and state taxes due on their personal tax return.
  • Partnership: Any business income is distributed to the individual partners, who then report the federal and state taxes due on the amount they each receive on their personal tax return.
  • Limited Liability Company: Any business income is distributed among LLC members, who then report the federal and state taxes due on the amount they each receive on their personal tax return. An LLC is not required to pay corporation business taxes but must pay the state BET every two years.
  • S Corporation: Each shareholder must report the federal and state taxes due on their share of the company's income on their personal tax return. An S corporation is not required to pay corporation business taxes but must pay the state BET every two years.
  • C Corporation: Each shareholder must report the federal and state taxes due on their share of any income they receive on their personal tax return. In addition, a C corporation must report federal and state taxes due on any revenue on their corporate tax return. This is known as double taxation.

Connecticut Pass-Through Entity (PTE) Tax

Connecticut imposes a Pass-Through Entity Tax (PET) on partnerships, S corporations, and LLCs treated as partnerships for tax purposes. The tax is assessed at 6.99% of the entity's income and is paid by the entity itself, not the individual partners or members.

Owners receive a refundable credit on their personal income tax returns for their share of the PET paid. This structure was implemented in response to the federal SALT deduction cap and aims to allow full deductibility at the entity level.

What Forms Do You Need to File Corporation Business Taxes?

The following forms and instructions are available on the Connecticut Department of Revenue website:

  • Sole Proprietorship (Individual): Form CT-1040
  • Sole Proprietorship (Nonresident but doing business in Connecticut): CT-1040NR
  • Partnership: Form CT-1065
  • S Corporation: Form CT-1120SI
  • C Corporation: Form CT-1120

Any business or corporation registered or doing business in Connecticut must file Form CT-1120 with the state Department of Revenue and a federal business tax return (Form 1120) with the IRS. However, if the business type is not subject to corporation business taxes, this can be an informational tax return.

Companies required to pay the biennial business entity tax must also submit Form OP-424, which can also be found on the state Department of Revenue website.

Electronic Filing and Payment Requirements

Connecticut requires most business tax filings and payments to be made electronically via the Taxpayer Service Center (TSC) on the DRS website. This includes Form CT-1120, estimated tax payments, and annual reports.

Failure to file electronically may result in penalties unless the taxpayer can show reasonable cause. Businesses should register for a TSC account early to ensure timely compliance.

When Are State Corporation Business Taxes Due?

Connecticut requires that corporations file business tax returns on the 15th day of the first month after the business's federal tax return is due. If your corporation's tax year corresponds with the calendar year, your business tax return is due on May 15th.

Estimated Payments and Penalties

Corporations with an expected annual tax liability over $1,000 must make estimated payments quarterly using Form CT-1120 ESA, ESB, ESC, or ESD. Failure to make timely estimated payments may result in interest and penalties.

Estimated payments are typically due on the 15th day of the fourth, sixth, ninth, and twelfth months of the corporation’s tax year. For calendar-year taxpayers, those due dates are April 15, June 15, September 15, and December 15.

Does Your Business Qualify for Tax-Exempt Status?

To gain tax-exempt status in Connecticut, a corporation must qualify as a 501(c) and get a nonprofit tax-exempt ID number from the IRS. The state might also require these companies to file additional paperwork with the Connecticut Department of Revenue to gain exemption from state corporate taxes.

The following types of organizations typically qualify for tax exemptions. These are covered under § 501(c)(3) of the Internal Revenue Code (IRC):

  • Agricultural and horticultural organizations, such as forestry or livestock institutes and animal welfare organizations.
  • Benevolence or charitable organizations.
  • Fraternities, societies, and associations, as long as the group's primary purpose is not for profit.
  • Nonprofit educational organizations, including nonprofit schools and colleges.
  • Nonprofit scientific groups, including certain research institutions.
  • Churches and religious institutions.
  • Social welfare organizations.
  • Trade associations, such as labor unions and worker's organizations.
  • Veterans' organizations.

Connecticut Corporate Tax Credits and Incentives

Connecticut offers several tax credits to encourage business development and economic growth. Common credits include:

  • Research and Development Credit: For companies conducting qualified R&D in the state.
  • Job Expansion Tax Credit: For businesses creating new full-time jobs in Connecticut.
  • Fixed Capital Investment Credit: For investments in depreciable tangible personal property.
  • Film and Digital Media Production Tax Credit: For qualifying production expenses incurred in-state.

Corporations must apply for and claim these credits properly on their tax returns to benefit.

Frequently Asked Questions

  1. What is the Connecticut corporate income tax rate in 2025?
    The rate is 7.5%, with a 10% surtax for large corporations earning over $100 million, resulting in an 8.25% effective rate.
  2. Is the Business Entity Tax still in effect in 2025?
    No, it was repealed in 2020, but businesses may still have filing responsibilities.
  3. Who pays the Connecticut Pass-Through Entity Tax?
    Pass-through entities like S corporations and partnerships pay the tax, while owners receive a credit on their personal income tax returns.
  4. When are estimated payments due for Connecticut corporate taxes?
    Quarterly, on April 15, June 15, September 15, and December 15 for calendar-year filers.
  5. Are there tax incentives for Connecticut businesses?
    Yes. R&D, job creation, capital investment, and media production are eligible for credits. Proper application and compliance are required.

If you need help with the connecticut corporate income tax rate 2025, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.