Connecticut Estate Tax Return (CT-706 NT): Who Must File and When

The most common and most expensive mistake Connecticut executors make is assuming they do not need to file a state estate tax return because the estate is not taxable. That assumption is wrong — and it costs money.

Every Connecticut estate, regardless of its size or taxable status, must file a state estate tax return within six months of the date of death. Failing to file — or failing to request an extension before the deadline — triggers a compounding financial penalty.

Here is exactly what you need to know about Connecticut's estate tax return requirements, the 2026 exemption, and the gift tax that affects a small but significant number of estates.

Why Every Estate Must File

The CT-706 NT (Connecticut Estate Tax Return for Nontaxable Estates) is not primarily about paying estate tax. For the vast majority of Connecticut estates — those well below the $15 million exemption — the form serves a different purpose: it is the document the Probate Court uses to calculate and invoice the statutory probate fee.

The court cannot calculate the probate fee until it receives the estate tax return. And the probate fee penalty clock starts ticking whether or not you have filed. This is the paradox that catches executors off guard.

The filing requirement under Connecticut law: Form CT-706 NT must be filed with the local Probate Court — not with the Department of Revenue Services (DRS) — within six months of the date of death. There are no income thresholds, no asset value minimums, and no exceptions for small estates.

If the estate is a small estate eligible for the Form PC-212 simplified procedure, a modified version of this requirement still applies. The Probate Court will typically require estate tax documentation as part of that process.

The 2026 Connecticut Estate Tax Exemption

For deaths occurring in 2026, the Connecticut estate tax exemption is $15 million per individual, fully aligned with the federal basic exclusion amount.

An estate valued at or below $15 million owes no Connecticut estate tax. However, it must still file the CT-706 NT to confirm that status with the Probate Court.

For estates exceeding $15 million: Form CT-706/709 must be filed with the Department of Revenue Services, with an exact copy submitted to the Probate Court. Connecticut levies a flat 12% estate tax on the amount exceeding the $15 million exemption. Combined with the federal estate tax rate of up to 40%, estates above the threshold can face a marginal combined rate exceeding 47%.

The Six-Month Deadline and the 0.5% Penalty

File the CT-706 NT with the Probate Court within six months of the date of death. Not six months from the date you were appointed executor. Not six months from when you discovered assets. Six months from the date of death as recorded on the death certificate.

If you cannot file by the deadline: File Form CT-706 NT EXT (Application for Extension of Time to File) before the six-month mark. A timely extension request grants an additional six months — extending the deadline to twelve months from the date of death.

If you miss the deadline without filing an extension: The court assesses a 0.5% per month interest penalty on the eventual probate fee. This is not a one-time penalty — it compounds monthly until the fee is paid.

Example: A $500,000 estate generates a probate fee of approximately $1,865. Missing the deadline by 12 months means a $112 surcharge. Missing it by 18 months adds $168. These amounts may seem manageable on a modest fee, but on larger estates the numbers scale accordingly.

What the CT-706 NT Actually Contains

The form is essentially an inventory document:

• The gross value of all estate assets (probate and non-probate)
• Deductions for debts, administrative expenses, and out-of-state property
• The calculation of the Connecticut taxable estate
• A declaration of whether the estate is taxable or non-taxable under the $15 million threshold

The Probate Court judge reviews the return and, for non-taxable estates, signs a "Certificate of Opinion of No Tax." This signed certification is what formally closes the tax portion of the estate administration and triggers the probate fee invoice.

If the estate's value is close to the threshold, or if there are complex asset valuations involved, consider having a CPA assist with the form even though it is structurally less complex than a taxable return.

Connecticut's Unique Gift Tax

Connecticut is the only state in the United States to impose a standalone state gift tax. This affects the estate tax calculation in specific ways.

How the gift tax works: Connecticut's gift tax is unified with its estate tax. Taxable gifts made during the decedent's lifetime — those exceeding the annual federal exclusion of $19,000 per recipient in 2026 — are added back to the estate for purposes of calculating the Connecticut taxable estate.

In practical terms: if someone made $2 million in taxable gifts during their lifetime and dies with $13.5 million in assets, their total Connecticut taxable estate is $15.5 million — above the exemption — and estate tax applies on the $500,000 excess at the 12% rate.

What this means for smaller estates: The gift tax does not typically affect estates well below $15 million. But for families who engaged in significant gifting strategies — annual exclusion gifts to children and grandchildren, charitable giving, or gifts to fund 529 plans — the executor should review the decedent's gift tax history (filed Form CT-709 returns) to accurately calculate the Connecticut taxable estate.

The annual exclusion gifts are not added back. Only taxable gifts — those above the annual exclusion per recipient — reduce the remaining exemption. Properly structured annual exclusion gifts do not affect the estate tax calculation.

No Portability in Connecticut

This is the planning gap that affects surviving spouses most significantly. Under the federal estate tax system, a surviving spouse can "port" the deceased spouse's unused exemption — effectively doubling the available exemption for the surviving spouse's estate.

Connecticut does not allow portability. When the first spouse dies, their unused Connecticut estate tax exemption is lost if it was not utilized through proper trust planning. This means a married couple cannot rely on the federal portability mechanism to protect both of their Connecticut exemptions.

The standard solution for estates large enough to be concerned about this is an A-B trust structure (also called a credit shelter trust or bypass trust) that shelters the first spouse's exemption in a separate trust at death. This planning must be done in advance — it cannot be implemented after death.

For estates below the exemption threshold, portability is not a concern. But for estates approaching $10 million or above, the absence of Connecticut portability is a significant reason to consult an estate planning attorney before the first spouse dies.

What Happens After the CT-706 NT Is Filed

1. The Probate Court reviews the return
2. The judge signs the Certificate of Opinion of No Tax (for non-taxable estates)
3. The court calculates the statutory probate fee based on the return's asset values
4. The court invoices you for the probate fee
5. You have 30 days from the invoice date to pay the fee

Failing to pay the fee within 30 days adds to the penalty calculation. The process is sequential — you cannot close the estate or make final distributions until the probate fee is paid and the court has approved the final account.

Summary: CT-706 NT Checklist

• [ ] Identify all solely-owned and non-probate assets and their date-of-death values
• [ ] Review the decedent's gift tax history for taxable gifts that affect the exemption
• [ ] Calculate the gross Connecticut estate (probate inventory + non-probate assets)
• [ ] Deduct out-of-state real estate and tangible personal property
• [ ] Apply the surviving spouse 50% reduction to the applicable portion
• [ ] File CT-706 NT with the Probate Court — or CT-706/709 with DRS — within 6 months of death
• [ ] If more time is needed, file CT-706 NT EXT before the 6-month deadline
• [ ] Pay the probate fee within 30 days of the court's invoice

The Connecticut Probate Process Guide provides a step-by-step walkthrough of the CT-706 NT, including how to identify which assets count in the fee base, how to correctly deduct out-of-state property, and how to apply the spousal reduction — so you file the return correctly the first time and avoid the penalty.

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