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Savings, CDs and tax

Connecticut After-Tax Yield Calculator

What a savings account or CD keeps after Connecticut's income tax (2% to 6.99% in 2026) and federal tax, and whether a Treasury bill, which Connecticut can't tax, keeps more.

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Savings keeps, after tax3.26%The answer

Savings keeps, after tax

3.26%

In Connecticut, a 4.5% APY keeps 3.26% after 22% federal and 5.5% state tax. A 4% Treasury bill, which Connecticut can't tax, keeps 3.12%, so the savings account keeps 0.14% more.

Treasury bill keeps, after tax
3.12%
Better after tax
Savings or CD
Treasury yield that matches the APY
4.18%

Connecticut income tax brackets, 2026 (taxable income)

RateSingle filersMarried filing jointly
2.00%$0 to $10,000$0 to $20,000
4.50%$10,000 to $50,000$20,000 to $100,000
5.50%$50,000 to $100,000$100,000 to $200,000
6.00%$100,000 to $200,000$200,000 to $400,000
6.50%$200,000 to $250,000$400,000 to $500,000
6.90%$250,000 to $500,000$500,000 to $1,000,000
6.99%Over $500,000Over $1,000,000

What a 4.50% APY keeps in Connecticut, by state bracket (22% federal bracket)

Connecticut rateSavings or CD keepsT-bill yield that matches it
2.00%3.42%4.38%
4.50%3.31%4.24%
5.50%3.26%4.18%
6.00%3.24%4.15%
6.50%3.22%4.13%
6.90%3.20%4.10%
6.99%3.20%4.10%

How this calculator works

Bank interest (savings, money market and CDs) is ordinary income to Connecticut and to the IRS. After-tax yield = APY × (1 − federal rate − Connecticut rate − local rate).

Treasury bills, notes and bonds are taxed only federally: federal law bars states from taxing their interest (31 U.S.C. 3124). After-tax yield = T-bill yield × (1 − federal rate).

The Connecticut rates are its 2026 brackets as compiled by the Tax Foundation from state law. Choose the bracket your taxable income falls in; the calculator starts at the rate for a single filer with $75,000 of taxable income (5.50%).

Questions people ask

Does Connecticut tax interest from savings accounts and CDs?

Yes. Connecticut taxes bank interest as ordinary income at 2% to 6.99% in 2026, on top of federal income tax.

Are Treasury bills taxable in Connecticut?

No. Interest on Treasury bills, notes, bonds and US savings bonds is exempt from Connecticut income tax by federal law. It is still taxed federally.

Is a T-bill or a CD better in Connecticut?

At Connecticut's 5.50% rate and a 22% federal bracket, a 4.50% CD keeps 3.26%, the same as a T-bill yielding 4.18%. A T-bill paying more than that keeps more.

Do Treasury money market funds avoid Connecticut tax?

Connecticut exempts the Treasury share of a fund's dividends only when at least half the fund's assets are US government obligations at each quarter's end; Treasury-only money market funds usually qualify.

Other states

Terms explained

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Sources

Updated by the RateHerald team. The maths is tested against worked examples; report a problem.