Updated October 16, 2026. Quick answer: Connecticut’s CT-1040 instructions address survivors directly: a “survivor or beneficiary of a plan participant” may claim the pension and annuity subtraction as the participant would have, if the income is reported the same way on the federal return, and the worksheet counts 75% of federal taxable IRA distributions toward it.
Connecticut at a glance
| Item | What the documents say |
|---|---|
| How the state taxes retirement-account income | Taxed as income, with a pension and annuity subtraction that counts 75% of taxable IRA distributions (Roth IRA distributions are left out) |
| Do the state’s documents address beneficiaries? | Addressed: a survivor or beneficiary of a plan participant may claim the subtraction as the participant would have, if they report the income the same way |
| Retirement exclusion or credit | Pension and annuity subtraction only when federal AGI is under $100,000 (single, head of household, married filing separately) or $150,000 (married filing jointly); the worksheet phase-out table cuts it below 100% starting at $75,000 or $100,000 (married filing jointly) |
| Rate in the documents read | Graduated rates from 2.00% to 6.99% in Table B of the 2025 CT-1040 instructions, depending on filing status and income |
| State inheritance or estate tax | Not mentioned in the documents read |
| Changed for 2026? | The documents read are the 2025 tax year instructions and do not describe any change for 2026 |
What the Connecticut documents say
The Line 48b instructions cover “distributions from an IRA (other than a Roth IRA)”. The worksheet begins with the pension and annuity line of the federal return and then tells filers to “add 75% of the amount reported on federal Form 1040”. That federal line is the taxable amount of IRA distributions.
The subtraction only applies under federal AGI limits. The Department’s senior tax tips list the joint-filer cutoff as “Married filing jointly with federal AGI of less than $150,000”. The instructions give $100,000 for single filers, married filing separately and head of household.
On survivors, the instructions say a “survivor or beneficiary of a plan participant” may claim the 100% subtraction in the same manner the participant would have been allowed, if the survivor or beneficiary must report the pension and annuity income on the federal return in the same manner as the participant would have. The passage is written around plan participants and does not separately describe a non-spouse beneficiary of an inherited IRA.
The federal 10-year rule and your Connecticut tax year
IRS Publication 590-B says a beneficiary may be required to take the entire account balance by the “end of the 10th year following the year of the owner’s death”, with exceptions for certain beneficiaries. Because the balance generally has to come out within that window, the timing of each withdrawal decides which tax year it lands in. See the 10-year rule and annual RMDs, lump sum versus spreading withdrawals and inherited IRA rules.
Withholding and other state taxes
Whether a state withholds from a withdrawal is a separate rule: see state withholding on retirement withdrawals. For Connecticut’s own death taxes, see Connecticut inheritance tax.
What the documents do not say
- The instructions do not separately describe a non-spouse beneficiary’s inherited IRA; the survivor language is written around plan participants.
- No Connecticut statute section was read, so none is cited.
- They say nothing about a deduction or credit for estate tax or income in respect of a decedent.
Common mistakes
- Assuming Connecticut’s rule for your own retirement income also covers an account you inherited: read whether its documents address beneficiaries, and confirm the point with a Connecticut preparer.
Related: state tax on inherited IRA withdrawals, state by state, whether Connecticut taxes 401(k) and IRA withdrawals, Connecticut retirement taxes, Connecticut inheritance tax, inherited IRA rules, spouse versus non-spouse beneficiary rules, and state withholding on retirement withdrawals.
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Answer againSources
- Form CT-1040 Connecticut Resident Income Tax Return Instructions (Rev. 12/25): https://portal.ct.gov/-/media/drs/forms/2025/income/2025-ct-1040-instructions_1225.pdf?rev=d898db2e610641b9b3e6efe6f89c6fc2&hash=06D5D5DF44FBF63ABF90A972C507F9FE
- Connecticut Tax Tips for Senior Citizens: https://portal.ct.gov/drs/individuals/connecticut-tax-tips-for-senior-citizens
- IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs): https://www.irs.gov/pub/irs-pdf/p590b.pdf
Sources: the primary documents linked above, read on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.