Updated October 7, 2026. Quick answer: No, not once you move away. Connecticut’s nonresident return instructions say the pension line “This line does not apply to a nonresident.” while Connecticut residents may subtract pension income if federal adjusted gross income is under $100,000 for single filers or $150,000 for joint filers, with the subtraction phasing down from $75,000 and $100,000 respectively.
Federal civil service pensions in Connecticut: does Connecticut tax federal pensions.
How Connecticut treats a pension earned elsewhere
| Item | What the state documents say |
|---|---|
| Nonresidents | On Form CT-1040NR/PY, the line for taxable amounts of pensions and annuities, and the line for IRA distributions, each say that the line does not apply to a nonresident. A nonresident’s Connecticut income is limited to income derived from or connected with Connecticut sources. This rests on the line 8 and line 9 instructions of the nonresident and part-year booklet. |
| Residents with a pension earned elsewhere | A resident starts from federal adjusted gross income, so a pension earned in another state is part of the starting figure. Line 48b then allows a pension and annuity subtraction for a filer with federal adjusted gross income under $100,000 (single, married filing separately or head of household) or under $150,000 (married filing jointly), with the Pension and Annuity Worksheet phasing the subtraction down starting at $75,000 of federal adjusted gross income for single, married filing separately and head of household filers and at $100,000 for joint filers, covering distributions from defined benefit plans, 401(k), 403(b) and 457(b) plans and 75% of non-Roth IRA distributions. Military retirement pay and railroad retirement benefits are fully exempt. The source says: “you may qualify for this subtraction modification”. This rests on the line 1 and line 48b instructions of the resident CT-1040 booklet. |
| Part-year residents (year of a move) | A part-year resident allocates income on Schedule CT-1040AW, and the pension and annuity line takes only the amount allocated to the residency portion of the year. Tax is figured as for a resident and then prorated by the share of Connecticut adjusted gross income earned during residency. The source says: “Part-Year Resident Enter the amount from Schedule CT-1040AW”. This rests on the line 9 and line 57 instructions of the CT-1040NR/PY booklet. |
| Rate | Connecticut prints a graduated schedule for 2025 that runs from 2.00% at the bottom bracket to 6.99% on income over the top threshold. The source says: “$31,250 plus 6.99% of the excess over $500,000”. |
| Return to file | Residents file Form CT-1040. Nonresidents and part-year residents file Form CT-1040NR/PY. The source says: “Connecticut Nonresident and Part-Year Resident Income Tax Return”. |
A $40,000 move-year example
A retiree receives $40,000 of pension in the year of a move: $20,000 before the move date, as a Connecticut resident, and $20,000 after leaving.
The first $20,000 can be taxed by Connecticut; the rest is outside its reach under the federal rule below. Taxed wholly at the lowest printed rate, 2.00%, the tax on it is computed as $20,000 x 0.02 = $400; taxed wholly at the highest, 6.99%, it is computed as $20,000 x 0.0699 = $1,398. The real figure falls between these bounds before any exclusion or credit. Federal tax still applies.
The federal rule that protects a nonresident
4 U.S.C. 114(a) bars a state income tax on retirement income of an individual “who is not a resident or domiciliary of such State”. Retirement income means any income from a qualified retirement plan, a simplified employee pension, a 403(a) or 403(b) plan, an individual retirement plan, an eligible 457 plan or a governmental plan. Income from a nonqualified deferred compensation plan counts only if it is part of a “series of substantially equal periodic payments” made for life or for a period of at least 10 years, or is a payment after termination of employment from a plan that exists only to provide benefits above the Internal Revenue Code limits, so not every payment is covered. Retired pay of a member of a uniform service is also covered.
Related: how Connecticut taxes retirement income, whether Connecticut taxes pensions, Connecticut to Arizona retirement taxes, Connecticut to Florida retirement taxes, out-of-state pension tax by state, and deferred compensation lump sums after a move.
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Answer againSources
- 2025 Form CT-1040 Connecticut Resident Income Tax Return Instructions (Connecticut Department of Revenue Services): portal.ct.gov
- 2025 Form CT-1040NR/PY Nonresident and Part-Year Resident Income Tax Return Instructions (Connecticut Department of Revenue Services): portal.ct.gov
- 4 U.S.C. 114, Limitation on State income taxation of certain pension income (U.S. Government Publishing Office, 2023 edition): https://www.govinfo.gov/content/pkg/USCODE-2023-title4/html/USCODE-2023-title4-chap4-sec114.htm
Sources: the primary documents linked above, read on October 7, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.