Connecticut Again Changes Estate and Gift Taxes – Increased Exemptions to be Phased in Over 5 Years
May 15, 2018
On May 15, 2018 Governor Dannel P. Malloy signed “An Act Concerning Revisions to the State Budget for Fiscal Year 2019 and Deficiency Appropriations for Fiscal Year 2018”.
As under current law, effective January 1, 2018, the Connecticut exemption amount from estate and gift tax has been increased from its prior level of $2,000,000 per individual to $2,600,000. A further increase to $3,600,000 is still slated to take effect on January 1, 2019. However, rather than matching the federal exemption of $10,000,000 indexed for inflation beginning on January 1, 2020, the Connecticut estate and gift tax exemption will phase in to match the federal exemption over the course of several years so that the Connecticut exemption amount will be $5,100,000 in 2020, $7,100,000 in 2021, $9,100,000 in 2022 and will match the federal exemption amount effective January 1, 2023. The estate and gift tax cap, the maximum amount an individual is liable to pay to Connecticut in combined estate and gift tax, is still scheduled to be reduced from $20,000,000 to $15,000,000 effective January 1, 2019.