- Connecticut residents may subtract 50% of their Teachers' Retirement System income on the 2025 CT-1040 (Line 45), with no income limit, or use the pension and annuity subtraction (up to 100%, phased out between $75,000 and $100,000 federal AGI for single filers and $100,000 and $150,000 for joint filers), but not both on the same income. It was 25% for 2020.Connecticut DRS Form CT-1040 Instructions (Rev. 12/25), pp. 9-10, 25; Connecticut TRB webpage '2022 Income Tax Exemption for Teacher Pensions'
- If you move out of Connecticut, the pension is no longer subject to Connecticut income tax, but you must ask Connecticut TRB to stop withholding it. Connecticut TRB withholds only federal and Connecticut tax.Filing for Retirement / New Retiree Q&A (AI_FNRQA_200628), p. 3; Active Teachers' Handbook (2022), p. 41
Connecticut: two subtractions, pick one
Connecticut residents owe state income tax on the pension; nonresidents do not. On the CT-1040 you may subtract 50% of your Teachers' Retirement System income (Line 45), with no income limit, or use the pension and annuity subtraction (Line 48b, up to 100%, phased out by federal AGI), but not both on the same income. Connecticut DRS Form CT-1040 Instructions (Rev. 12/25), pp. 9-10, Lines 45 and 48b; Connecticut TRB webpage '2022 Income Tax Exemption for Teacher Pensions'; Filing for Retirement / New Retiree Q&A (AI_FNRQA_200628), p. 3
- Line 45, the teacher subtraction: 50% of your Teachers' Retirement System income, whatever your income. It has gone up over time: 25% for 2020, 50% for 2022, 50% for 2025. Connecticut TRB webpage '2022 Income Tax Exemption for Teacher Pensions' (2020: 25%; 2022: 50%); Connecticut DRS Form CT-1040 Instructions (Rev. 12/25), p. 9, Line 45 (50%)
- Line 48b, the pension and annuity subtraction: up to 100% of pension income, phased out by federal adjusted gross income (AGI). Connecticut DRS Form CT-1040 Instructions (Rev. 12/25), p. 25, Pension and Annuity Phase-Out Table
Connecticut TRB says the teacher pension subtraction was 25% for 2020 and 50% for 2022. The sources we have don't say what it was for 2021.
What would settle it: DRS 2021 CT-1040 instructions or Special Notice 2022(4).
DRS's examples
- A single filer with $30,000 of Teachers' Retirement System income and $38,000 of other pension income, federal AGI less than $75,000: Line 45 = $0, Line 48b = $68,000. Connecticut DRS Form CT-1040 Instructions (Rev. 12/25), p. 10, Line 48b Example 1 (Anna)
- A single filer with $40,000 of Teachers' Retirement System income and $25,000 of other pension income, federal AGI more than $100,000: Line 45 = $20,000, Line 48b = $0. Connecticut DRS Form CT-1040 Instructions (Rev. 12/25), p. 10, Line 48b Example 2 (Aubrey)
The phase-out table
| Federal AGI | Share you can subtract |
|---|---|
| Under $75,000 | 100% |
| $75,000 – $77,499 | 85% |
| $77,500 – $79,999 | 70% |
| $80,000 – $82,499 | 55% |
| $82,500 – $84,999 | 40% |
| $85,000 – $87,499 | 25% |
| $87,500 – $89,999 | 10% |
| $90,000 – $94,999 | 5% |
| $95,000 – $99,999 | 2.5% |
| $100,000 or more | 0% |
| Federal AGI | Share you can subtract |
|---|---|
| Under $100,000 | 100% |
| $100,000 – $104,999 | 85% |
| $105,000 – $109,999 | 70% |
| $110,000 – $114,999 | 55% |
| $115,000 – $119,999 | 40% |
| $120,000 – $124,999 | 25% |
| $125,000 – $129,999 | 10% |
| $130,000 – $139,999 | 5% |
| $140,000 – $149,999 | 2.5% |
| $150,000 or more | 0% |
Federal AGI. Connecticut DRS Form CT-1040 Instructions (Rev. 12/25), p. 25, Pension and Annuity Phase-Out Table Engine uses the p. 25 phase-out table.
Which is bigger for you?
Our engine on DRS's rules: a single filer with $40,000 of Teachers' Retirement System income and no other pension.
| Federal AGI | Line 45 | Line 48b |
|---|---|---|
| $70,000 | $0 | $40,000 |
| $80,000 | $0 | $22,000 |
| $95,000 | $20,000 | $0 |
| $120,000 | $20,000 | $0 |
CT-1040 instructions p. 10 (Line 48b) and Example 1 let a retired teacher put Teachers' Retirement System income in the pension and annuity subtraction, but the p. 24 worksheet line 2 says to subtract Connecticut teachers' retirement pay from the Line 5b amount. We follow the Line 48b text and Example 1. Check with Connecticut TRB
Federal tax
Pensions are federally taxable except the part from after-tax contributions (made before July 1, 1991), which Connecticut TRB spreads over your payments (IRS Simplified Method). Active Teachers' Handbook (2022), pp. 41-42, Taxation of Your Retirement Benefit; Taxability of Your Retirement Benefit (RT_Taxability_200719), p. 1
- $40,000 of after-tax contributions, age 66: $190.47 of each monthly payment is tax-free. Taxability of Your Retirement Benefit (RT_Taxability_200719), p. 1 (Connie Teacher)
- $67,000 of after-tax contributions, age 60 with a Plan D co-participant of 58: $186.11 of each monthly payment is tax-free. Taxability of Your Retirement Benefit (RT_Taxability_200719), p. 1 (Bob Jones)
Connecticut TRB withholds federal and Connecticut tax only; not other states'. Active Teachers' Handbook (2022), p. 41
Questions
Is my Connecticut teacher pension taxed by Connecticut?
Yes, if you live in Connecticut, but you can subtract 50% of it on your 2025 CT-1040 (Line 45) with no income limit, or use the pension and annuity subtraction (Line 48b) if that's larger, not both on the same income. If you move out of Connecticut, it isn't subject to Connecticut income tax.
Is it taxed federally?
Yes, except the part that comes from after-tax contributions you made before July 1, 1991, which Connecticut TRB spreads over your payments.
Source: CTRS Active Teachers' Handbook, July 1, 2022, pp. 41-42, 41. Also: Connecticut TRB webpage '2022 Income Tax Exemption for Teacher Pensions'; Taxability of Your Retirement Benefit p. 1; Connecticut DRS Form CT-1040 Instructions pp. 9-10, 9, 10, 25; Filing for Retirement / New Retiree Q&A p. 3; 2022: 50%). Last reviewed .