Self-employed taxes and LLC costs in Connecticut, 2026
Connecticut dropped its business entity tax years ago; what a freelancer feels now is a graduated income tax that takes back its low brackets as income rises.
Total tax on this income in 2026
$21,395
Put aside 25% of each payment · $5,349 per quarter
| Self-employment tax (15.3%) | $12,010 |
| Federal income tax | $5,790 |
| Connecticut income tax | $3,595 |
| QBI deduction used | $12,579 |
| Effective rate on all income | 25.2% |
With an S corp election and a $34,000 salary, about $3,278 less tax (check it).
Computed by Radif Partners from IRS and Connecticut agency documents read on October 15, 2026 · How we calculate
Connecticut charges $120 to form an LLC and $80 for each annual report, and nothing else at the state level since the $250 business entity tax was repealed from 2020, so five years of state fees come to $520. The real cost is income tax. Rates run from 2 % to 6.99 %, but above certain levels of Connecticut AGI the state recaptures the benefit of its lower brackets, so a high earner ends up paying close to the top rate on every dollar. On $75,000 of freelance profit, a single filer owes about $3,084 to Connecticut and $18,578 in all; at $120,000 the state share is $5,441. Connecticut follows the S election, and from 2024 the pass-through entity tax at 6.99 % is optional rather than mandatory. With a $50,000 salary on $120,000 of profit, the election saves about $4,754 a year.
Connecticut at a glance, 2026
| LLC filing fee | $120 |
| LLC Annual Report | $80 a year |
| Income tax | 2 % to 6.99 % |
| S corporation election | followed by the state |
| Tax on $75,000 of profit (single) | $18,578 in all, $3,084 to Connecticut |
The table of Connecticut brackets further down tells only half of the story. Section 12-700 of the General Statutes adds a phase-out of the 2 % bracket for single filers whose Connecticut AGI passes $56,500, and further recapture amounts above $105,000, $200,000 and $500,000, with the joint thresholds doubled (Connecticut General Statutes, chapter 229). The effect is a marginal rate that briefly exceeds the bracket rate while the benefit is being clawed back, and an average rate that converges on the top bracket for high earners. A self-employed consultant crossing those lines in a good year sees the state bill rise faster than the schedule suggests.
State income tax on a freelance profit
Connecticut income tax
$7,114
| State share of profit | 4.7% |
| Total with federal | $44,722 |
What the LLC costs to keep
The Certificate of Organization, which includes the appointment of a statutory agent, costs $120 and is filed online at business.ct.gov. Each year after formation the LLC files an annual report for $80 (CT Secretary of the State, annual report fees). Connecticut used to add a $250 business entity tax on top; that tax was repealed from 2020 and has not come back. The LLC cost comparison puts the total next to neighboring New York and Massachusetts.
Interest instead of a penalty
Connecticut charges underpayment interest of 1% a month rather than a separate penalty, and none is owed when the tax on the return, less Connecticut withholding, is under $1,000. Filing the return and paying in full by January 31 replaces the fourth installment (chapter 229, estimated tax). Freelancers who would rather not send a January payment can use that route. Farmers and fishermen follow a separate rule, with a single installment due on January 15 instead of four. The estimated tax calendar lists the federal dates, which Connecticut shares.
S corporations and the optional PET
From 2018 to 2023, Connecticut required S corporations and partnerships to pay its pass-through entity tax and gave owners a credit. Since 2024 the tax is elective, still at 6.99 %, and the 2025 form is titled the Optional Pass-Through Entity Tax Return (DRS, Form CT-PET 2025). The 2026 form had not been published when these figures were read.
Unemployment tax on the owner's salary
For 2026 the Department of Labor raised the taxable wage base from $26,100 to $27,000 and lowered the new employer rate from 2.2% to 1.9 % (CT DOL, 2026 rates). On a $50,000 salary that is $513 a year. The LLC vs S corp calculator adds it to the payroll side with Connecticut selected.
Connecticut income tax brackets
| Taxable income, single | Rate | Taxable income, joint | Rate |
|---|---|---|---|
| $0 to $10,000 | 2 % | $0 to $20,000 | 2 % |
| $10,000 to $50,000 | 4.5 % | $20,000 to $100,000 | 4.5 % |
| $50,000 to $100,000 | 5.5 % | $100,000 to $200,000 | 5.5 % |
| $100,000 to $200,000 | 6 % | $200,000 to $400,000 | 6 % |
| $200,000 to $250,000 | 6.5 % | $400,000 to $500,000 | 6.5 % |
| $250,000 to $500,000 | 6.9 % | $500,000 to $1,000,000 | 6.9 % |
| over $500,000 | 6.99 % | over $1,000,000 | 6.99 % |