Self-Employment Tax in Connecticut (2026)

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 6, 2026 · Last updated Aug 6, 2026

Self-employment tax in Connecticut consists of federal Social Security and Medicare taxes (15.3% on net earnings up to annual limits) plus Connecticut state income tax, which ranges from 3% to 6.99% for 2026. Both federal and state taxes are typically paid via quarterly estimated tax payments.

Overview of Self-Employment Tax in Connecticut

Self-employment tax for individuals operating businesses in Connecticut involves two main components: federal self-employment tax and Connecticut state income tax. The federal self-employment tax covers Social Security and Medicare contributions for self-employed individuals, similar to the FICA taxes withheld from employee wages. Connecticut then imposes its own income tax on the net earnings from self-employment, which is calculated after certain federal deductions.

This guide details the rates, calculation methods, payment obligations, and specific Connecticut tax considerations for self-employed individuals, including sole proprietors, partners in a partnership, and members of a limited liability company (LLC) that is not taxed as a corporation. Understanding these obligations is crucial for compliance and avoiding penalties. For a broader perspective on federal self-employment tax, refer to our main self-employment tax guide.

Federal Self-Employment Tax (Social Security and Medicare)

The federal self-employment tax rate is 15.3%. This rate is composed of two parts:

• 12.4% for Social Security, applied to net earnings up to an annual limit (e.g., $168,600 for 2024, subject to change for 2026).
• 2.9% for Medicare, applied to all net earnings from self-employment, with no income limit.

For 2026, the Social Security earnings limit will be adjusted for inflation. Net earnings from self-employment are generally calculated as gross income from your trade or business minus allowable business deductions. However, for self-employment tax purposes, you calculate your net earnings by multiplying your total net earnings by 92.35% (0.9235). This adjustment accounts for the fact that employees do not pay Social Security and Medicare taxes on the portion of their wages that covers their employer's share of these taxes.

The federal self-employment tax is reported on IRS Schedule SE (Form 1040), Self-Employment Tax. One-half of your self-employment tax is deductible when calculating your adjusted gross income (AGI) for federal income tax purposes. This deduction effectively reduces your taxable income for both federal and state income tax calculations.

Connecticut State Income Tax on Self-Employment Income

Connecticut imposes a progressive individual income tax on residents and non-residents earning income from Connecticut sources. Self-employment income is included in your federal adjusted gross income (AGI), which is the starting point for calculating your Connecticut adjusted gross income (CT AGI). Connecticut's income tax rates for 2026 range from 3% to 6.99%, applied across various income brackets. These rates and brackets are subject to legislative changes each year.

For example, for a single filer in 2026, the first portion of taxable income might be taxed at 3%, with higher income levels taxed at progressively higher rates up to the top marginal rate of 6.99%. The specific brackets and thresholds are published annually by the Connecticut Department of Revenue Services (DRS). You can find the most current tax rate schedules on the DRS website.

Connecticut also has various credits and deductions that may reduce your state income tax liability. These can include property tax credit, earned income tax credit, and deductions for certain types of income or expenses. It is important to consult the official DRS publications or a tax professional to determine eligibility for these provisions.

Paying Self-Employment Tax: Federal and Connecticut Estimated Taxes

Since self-employment income is not subject to employer withholding, self-employed individuals are generally required to pay both federal and Connecticut state income taxes through estimated tax payments. These payments are typically made quarterly throughout the tax year.

Federal Estimated Taxes

You must pay federal estimated taxes if you expect to owe at least $1,000 in tax for the year. This includes your federal income tax liability plus your self-employment tax. Payments are made using IRS Form 1040-ES, Estimated Tax for Individuals. The payment due dates are generally:

• April 15 (for income earned January 1 to March 31)
• June 15 (for income earned April 1 to May 31)
• September 15 (for income earned June 1 to August 31)
• January 15 of the following year (for income earned September 1 to December 31)

If a due date falls on a weekend or holiday, the deadline shifts to the next business day. You can pay federal estimated taxes online via IRS Direct Pay, through the Electronic Federal Tax Payment System (EFTPS), or by mail with a payment voucher.

Connecticut Estimated Taxes

Similarly, you must pay Connecticut estimated taxes if you expect to owe at least $1,000 in Connecticut income tax for the year from sources other than wages subject to withholding. Payments are made using Form CT-1040ES, Estimated Connecticut Income Tax Payment Coupon for Individuals. The due dates generally align with the federal schedule:

• April 15
• June 15
• September 15
• January 15 of the following year

Connecticut estimated tax payments can be made online through the DRS Taxpayer Service Center (TSC) or by mail with payment coupons. Failure to pay enough estimated tax throughout the year can result in penalties from both the IRS and the Connecticut DRS.

Connecticut Pass-Through Entity Tax (PET)

Connecticut has a Pass-Through Entity Tax (PET) that applies to certain pass-through entities, such as partnerships, S corporations, and some LLCs taxed as partnerships or S corporations. The PET is an entity-level tax, meaning the business itself pays the tax, rather than the individual owners directly. For tax years beginning on or after January 1, 2018, the PET is mandatory for most affected entities.

The PET rate is 6.99% of the entity's Connecticut-sourced income. Owners of entities subject to the PET may be eligible for a credit against their individual Connecticut income tax for their share of the PET paid by the entity. This can effectively reduce the individual's state income tax liability on their share of the business income. Sole proprietors and single-member LLCs taxed as sole proprietors are generally not subject to the PET, as they are not considered pass-through entities for this purpose. For more details, consult the Connecticut DRS guidance on the PET.

Impact of Business Structure on Self-Employment Tax

The type of business structure you choose can affect how your self-employment income is taxed, particularly for federal self-employment tax purposes:

• Sole Proprietorship: The business and owner are the same for tax purposes. All net business income is subject to federal self-employment tax and Connecticut income tax.
• Partnership: Each partner's share of the partnership's net earnings is subject to federal self-employment tax and Connecticut income tax.
• Limited Liability Company (LLC):
  • Single-Member LLC (SMLLC): By default, an SMLLC is treated as a disregarded entity (sole proprietorship) for tax purposes. The owner reports business income and expenses on Schedule C (Form 1040), and net earnings are subject to federal self-employment tax and Connecticut income tax.
  • Multi-Member LLC (MMLLC): By default, an MMLLC is treated as a partnership for tax purposes. Each member's share of net earnings is subject to federal self-employment tax and Connecticut income tax.
  • LLC electing S-Corporation status: An LLC can elect to be taxed as an S-corporation. In this case, owners who are also employees can take a reasonable salary, which is subject to FICA taxes (Social Security and Medicare) withheld by the LLC. Any remaining profits distributed to owners as dividends are generally not subject to federal self-employment tax. This can potentially reduce the overall self-employment tax burden, but it comes with additional payroll and compliance requirements.

The choice of business structure has significant tax implications, and it is advisable to consult with a tax professional to determine the most suitable structure for your specific situation. For more on business structures, see forming an LLC in Connecticut or S-Corp vs. LLC.

Recordkeeping and Compliance

Accurate recordkeeping is essential for self-employed individuals in Connecticut. You must keep detailed records of all business income and expenses to correctly calculate your net earnings from self-employment. This includes invoices, receipts, bank statements, and mileage logs. Good records support the deductions you claim and help you prepare accurate tax returns.

Compliance also involves:

• Obtaining an Employer Identification Number (EIN): While sole proprietors without employees may use their Social Security Number, an EIN is generally required for partnerships, LLCs, and sole proprietors with employees.
• Filing federal income tax returns: This includes Form 1040, Schedule C (for sole proprietors/SMLLCs), Schedule K-1 (for partners/MMLLC members), and Schedule SE.
• Filing Connecticut income tax returns: This typically involves Form CT-1040, Connecticut Resident Income Tax Return, or the appropriate non-resident form.
• Maintaining business licenses and permits: Ensure you have all necessary Connecticut business licenses and permits at the state and local levels.

Failure to maintain proper records or comply with tax obligations can lead to audits, penalties, and interest charges from both the IRS and the Connecticut DRS.

Frequently Asked Questions

What is the self-employment tax rate in Connecticut?

The federal self-employment tax rate is 15.3% (12.4% for Social Security up to the annual limit, plus 2.9% for Medicare). Connecticut state income tax rates for individuals range from 3% to 6.99% for 2026, applied to taxable income.

How do I pay self-employment tax in Connecticut?

You pay federal self-employment tax and Connecticut state income tax through estimated tax payments, typically made quarterly. Use IRS Form 1040-ES for federal and Form CT-1040ES for Connecticut. Payments can be made online or by mail.

Is self-employment tax deductible in Connecticut?

Yes, one-half of your federal self-employment tax is deductible when calculating your adjusted gross income (AGI) for federal income tax purposes. This federal deduction also reduces your federal AGI, which is the starting point for Connecticut state income tax calculations.

What is the Connecticut Pass-Through Entity Tax (PET)?

The Connecticut Pass-Through Entity Tax (PET) is an entity-level tax on certain pass-through entities, such as partnerships and S corporations. While it can reduce the income passed through to owners, it is generally not directly paid by sole proprietors or single-member LLCs taxed as sole proprietors.

Do I need to pay estimated taxes in Connecticut?

Yes, if you expect to owe at least $1,000 in Connecticut income tax for the year from sources other than wages subject to withholding, you generally must pay estimated taxes. This includes income from self-employment. Payments are typically due April 15, June 15, September 15, and January 15 of the following year.

Related

• Self-Employment Tax: A Complete Guide (federal hub)
• Self-Employment Tax Calculator
• Business Tax Hub
• How to Form an LLC in Connecticut
• Connecticut Sales Tax
• How to Get an EIN
• S-Corp vs. LLC

Sources

1. IRS - Self-Employment Tax (Social Security and Medicare Taxes).
2. IRS - About Schedule SE (Form 1040), Self-Employment Tax.
3. IRS - Tax Topic 554, Self-Employment Tax.
4. IRS - About Form 1040-ES, Estimated Tax for Individuals.
5. Connecticut Department of Revenue Services (DRS) - Individual Income Tax.
6. Connecticut DRS - Individual Income Tax Rates.
7. Connecticut DRS - Estimated Income Tax (Form CT-1040ES).
8. Connecticut DRS - Business Taxes.
9. Connecticut DRS - Pass-Through Entity Tax (PET).
10. Cornell Law School Legal Information Institute - 26 U.S. Code § 1401 - Rate of tax (Federal SE Tax).
11. Cornell Law School Legal Information Institute - 26 U.S. Code § 1402 - Definitions (Net earnings from self-employment).
12. Cornell Law School Legal Information Institute - 26 U.S. Code § 6654 - Failure by individual to pay estimated income tax.
13. Connecticut General Statutes - Chapter 229 - Income Tax.
14. Connecticut General Statutes - Chapter 228 - Corporation Business Tax (relevant for S-corps).
15. Connecticut General Statutes - Chapter 228a - Pass-Through Entity Tax.

LegalGlass provides general information for educational purposes and is not a law firm or a substitute for advice from a licensed attorney or tax professional. Laws, fees, and thresholds change; verify current requirements with the IRS and the Connecticut Department of Revenue Services before acting.