A Connecticut resident is subject to Connecticut income tax on all of his income regardless of where the income is earned. However, if the resident works in another state that imposes an income tax, the individual is also subject to tax in the state in which he works.   

The employer will withhold tax for the state in which the individual works and will submit the tax to that state.  If the employer is also registered to withhold Connecticut income tax, Connecticut income tax must be withheld by the employer, but only to the extent that Connecticut income tax withholding exceeds the amount required to be withheld for the state in which the services are performed. For further information, employers should consult the Circular CT, Connecticut Employer's Tax Guide.

Returns to be Filed in Connecticut and in the Other State

A Connecticut resident who works in another state that imposes an income tax will be required to file a nonresident income tax return for the other state and a resident return for Connecticut.  The Connecticut resident will receive credit from Connecticut for income tax paid to the other state on income earned for services performed in the other state.  The credit allowed will be the lesser of the tax paid to the other state or the tax which Connecticut imposes on the resident's out-of-state wages. The credit is claimed by completing Form CT-1040, Schedule 2, and attaching a copy of the return filed with the other state. (Credit cannot be claimed on Form CT-1040EZ or the Telefile return.)  The resident should contact the state in which he or she worked to determine the correct form to file to report the income earned in that state.  

Estimated Payments to Connecticut May Be Required 

The taxpayer who owes $1,000 or more in Connecticut income tax, after subtracting the credit for taxes paid to another jurisdiction, should make estimated tax payments.  Estimated payments may be required if the taxpayer earns significant income that is not subject to withholding in the other state (such as interest income, capital gain, or dividends).  Estimated payments for calendar year taxpayer are due on April 15, June 15, September 15, and January 15 and are made using Form CT-1040ES.