Is military retirement taxed in Connecticut?

How it works in Connecticut

Take the taxable amount from the 1099-R that DFAS sends, the same figure that sits on line 5b of your federal Form 1040, and enter it on Schedule 1, line 44 of the 2025 Form CT-1040. The instructions open line 44 to a retired member of the armed forces of the United States or the National Guard, and to a beneficiary receiving survivor benefits under an option or election the retired member made. Line 44 rolls into the line 50 total, which comes off on Form CT-1040, line 4.

Because the pension leaves Connecticut adjusted gross income, it cannot shrink tax breaks that key off that figure. A single filer's $15,000 personal exemption starts falling once Connecticut AGI passes $30,000 and is gone above $44,000, and the Table C add-back that claws back the 2% bracket starts at $56,500 for single filers. On an assumed $36,000 pension, a single filer whose other income keeps taxable income in the 5.5% bracket ($50,000 to $100,000) saves about $1,980 a year at that rate.

Two other tests read federal adjusted gross income on line 1, and that number still contains the pension. Social Security is fully exempt on line 41 only when line 1 is under $75,000 single or $100,000 joint, and the line 48b subtraction for other pensions and IRA withdrawals ends at $100,000 single or $150,000 joint, phasing down from $75,000 single and $100,000 joint. When you work the line 48b worksheet, take military retirement pay out of the federal line 5b figure first; the instructions say it is reported only on line 44.

To recover Connecticut tax paid on retired pay in an earlier year, file that year's Form CT-1040X; the form is year specific, and myconneCT accepts it electronically. The 2025 CT-1040X instructions close the refund window three years after the return's due date for most filers, so in October 2026 the 2023, 2024 and 2025 returns can still be corrected.

If DFAS has been withholding Connecticut tax from your retired pay, stop it in myPay or on DD Form 2866. DFAS lists Connecticut among the states it can withhold for, and money held back on a fully subtracted pension only returns as a refund after you file.

What trips Connecticut retirees up

• A former spouse's share does not qualify. The 2025 instructions exclude from line 44 any payment a former spouse receives under a final decree of divorce, dissolution, annulment or legal separation, or a court ordered, ratified or approved property settlement that divides military retirement pay. The retiree subtracts only the retired pay that is in his or her own federal adjusted gross income.
• The statute ties line 44 to the armed forces as 10 U.S.C. § 101 defines them (Army, Navy, Air Force, Marine Corps, Space Force and Coast Guard) plus the National Guard. That federal definition leaves out the NOAA Commissioned Corps and the Public Health Service Commissioned Corps, and DRS has published nothing on retirees of those two corps (read October 10, 2026). They may be able to use the income-limited line 48b pension subtraction instead.
• The survivor rule is written around an election made by a deceased retired member, and DRS's 2019 armed forces publication adds that the benefits must have begun upon the member's death. A Survivor Benefit Plan annuity paid because a member died on active duty, or a reserve-component annuity paid when a reservist died before retired pay started, may fall outside that wording as written, and DRS has not addressed those cases.
• Connecticut moved in two steps. P.A. 05-251 created a 50% subtraction for taxable years beginning on or after January 1, 2008, and P.A. 15-244 raised it to the full amount for taxable years beginning on or after January 1, 2015, according to the history note in Chapter 229 of the General Statutes.