Funds that would avoid CT state taxes.
In preparing my taxes this year, I learned that CT has an additional subtle way of screwing over and taxing its residence.
Last year with the good interest rates, we had a significant amount of interest/dividends from money market funds and the like. Sounds like some of this should be tax-exempt as it is from treasury obligations, however CT is one of the few states that has a threshold in which if it is not met none of the income is tax exempt.
Any savvy CT investors want to share where they are parking emergency fund/ money on the sideline too grow that meets the threshold to avoid paying CT taxes on it? (Other than owning a treasury bond out right)
Also it seemed to me that this is just a manual calculation that the tax preparer has to perform in filling out their CT tax form. Is that correct?
I'm looking at CT 1040 lines 31 and 32 in particular ask for modifications to the federal adjusted gross income in asking if there were any interest on state and government applications other than CT or mutual funds exempt interest dividends.