The accumulation of wealth is a very good thing. However, from an estate planning perspective, it can present some added challenges depending on the extent of your resources.
2023 Connecticut State Estate Tax Exclusion
There are 12 states in the union and have state-level estate taxes. As luck would have it, Connecticut is among the unfortunate dozen. That’s the bad news, but there is good news for most residents. This tax is only applicable on the portion of an estate that exceeds the exclusion.
For the rest of 2022, the Connecticut state estate tax exclusion is $9.1 million. This is the highest exclusion among the states that have estate taxes. The rates are variable depending on the actual value of your estate, but the maximum is 12 percent at the present time.
In addition to the state-level tax, there is also a federal estate tax that is applicable in all 50 states. Once again, there is a large exclusion that will allow most families to avoid the tax. During the current calendar year, it is $12.06 million. The top rate of the federal estate tax is 40 percent.
Each year, this figure is indexed for inflation. Since there has been a lot of it this year, the increase should reflect that reality. The figure for next year has not been formally released at the time of this writing. However, Bloomberg has used IRS codes to make a projection based on current economic realities. They suggest that the exclusion will be $12.92 million in 2023.
When the new year rolls around, the Connecticut estate tax exclusion is going to mirror the federal exclusion. Plus, the rate will be a contact form and we will get back in touch with you promptly.
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