CT Estimated Tax Payments | What You Should Know

February, 07 2025 by Steve Banner, EA, MBA

Let us begin by clarifying what we mean when we use the term “estimated tax.” Just in case you were worried when you saw the title of this article, I want to reassure you that we’re not going to be talking about having your tax return prepared by one of those fly-by-night crooks who prey on unsuspecting taxpayers by plucking a “guesstimate” out of thin air rather than an accurate assessment of your true tax liability!

Instead, what we are talking about is the system used by the Connecticut State Department of Revenue Services (DRS) that allows you to estimate the amount of state tax likely to be due on certain types of income that was not taxed before you received it. If you are like most people, and your only income for the year is a regular paycheck from your employer, you will not have to bother with estimated taxes because your employer typically withholds both state and federal taxes on your behalf.

Of course, not all taxpayers fall into that category. For example, taxes are normally not withheld from the payments received by small business owners, freelancers, independent contractors, and other self-employed taxpayers. Other types of taxpayers can also be affected because estimated taxes may be made for any type of taxable income that has not been subjected to withholding. This can include earned income, dividend income, interest income, capital gains, rental income, and even income from cryptocurrency. Rather than wait until the end of the year to pay the accumulated taxes on their diverse types of income, these folks may make a tax payment up to four times each year based on their estimated income for the period.
 

Who IS NOT Required to Make Estimated Tax Payments to Connecticut in 2025?

You do not have to make estimated income tax payments if:

1. You were a Connecticut resident during the 2024 taxable year, and you did not file a 2024 income tax return because you had no Connecticut income tax liability,
   
   or
    
2. You were a nonresident or part-year resident with Connecticut-sourced income during the 2024 taxable year and you did not file a 2024 income tax return because you had no Connecticut income tax liability.

Who IS Required to Make Estimated Tax Payments to Connecticut?

If this applies to you, please do not be concerned that you will have to make estimated tax payments for the $20 in interest that you receive from your Liberty Bank account each month. But you are liable to make estimated tax payments if you expect that:
 

1. Your Connecticut income tax (minus any Connecticut tax withheld and any Pass‑Through Entity Tax Credit (PE Tax Credit) you are allowed to claim) will be $1,000 or more,
   
   and
    
2. Your Connecticut income tax withheld (including any PE Tax Credit) will be less than your required annual payment for the 2025 taxable year.

Although it is not compulsory for you to make estimated tax payments if you meet the above conditions, it is wise for you to do so. If you have not made those payments during the year, you will have to pay the full amount of CT taxes owed when you file your tax return – in addition to interest and penalties on the unpaid amounts. In other words, it is in your best interests to make your regular estimated tax payments during the year instead of producing a lump sum at the end of the year, with interest and penalties added.

But for some taxpayers whose income fluctuates throughout the year (for example, self-employed snowplow drivers), it can be exceedingly difficult to avoid underpayment penalties because they cannot know in advance exactly what their tax liability will be. For this reason, the DRS offers a safe harbor. Taxpayers can avoid the penalty for 2024 if they use four equal, timely installments to pay at least 90% of the CT income tax shown on their 2025 return or 100% of the CT income tax shown on their 2024 return.

Alternatively, our snowplow driver could use the DRS's Annualized Income Installment method. This method would allow him to eliminate or reduce his estimated tax payment for one or more periods during the year. More information can be found in DRS Informational Publication 2018(11).
 

When are Estimated Tax Payments Due?

Estimated tax installment payments are normally due on the following dates unless the 15th falls on a weekend or holiday. In that case, the payment will be due on the next business day:
 

• April 15th,
• June 15th,
• September 15th, and
• January 15th of the following year.

For taxpayers who use a fiscal year instead of the calendar year, the first three payments are due on the 15th day of the 4th, 6th, and 9th months of their fiscal year, followed by the final payment on the 15th of the first month of the next fiscal year.

Payments may be made electronically through myconneCT or via mail by using Form CT-1040ES. For more information, refer to Informational Publication 2018(16) - Estimated Connecticut Income Taxes.