Interest from Connecticut bonds, including Connecticut Higher Education Trust Bonds, or bonds issued by Connecticut municipalities or government obligations of Puerto Rico, Guam, American Samoa and the U.S. Virgin Islands is exempt from federal and state tax.
If you earned interest from bonds issued by a state other than Connecticut or municipal bonds issued by a city or county outside Connecticut, this interest is subject to Connecticut income tax.
If you earned dividends from a fund that invests in obligations of many states, only the portion derived from Connecticut obligations or government obligations of Puerto Rico, Guam, American Samoa and the U.S. Virgin Islands is exempt from Connecticut income tax.
Complete Schedule 1 of Form CT-1040 or Form CT-1040NR/PY to add to your federal adjusted gross income, the interest and dividends earned from other states' obligations.
For additional information, review PS 2005(2).