Your February 2026 Tax Update: What New Haven Taxpayers Need to Know Right Now

February 8, 2026 • Giveaways

New Haven, CT – February 8, 2026 – Tax season is officially underway, and this year brings significant changes for Connecticut taxpayers. The One Big Beautiful Bill Act introduced over 100 modifications to the tax code, creating new deductions and opportunities for tax planning. At the same time, IRS staffing reductions mean longer processing times and limited customer service availability.

If you're preparing to file your 2025 tax return, understanding these changes now can help you maximize your tax refund and avoid costly delays.

File Electronically with Direct Deposit – This Is Critical!

The IRS is operating with 27% fewer employees in 2026 compared to previous years. This staffing shortage has created significant delays across all channels:

Phone support wait times exceed 60 minutes
In-person appointments are limited and booked weeks in advance
Paper returns take 90+ days to process

Electronic filing with direct deposit remains your fastest option. E-filed returns with direct deposit typically deliver refunds within 21 days. Paper checks extend this timeline to 60+ days, and paper-filed returns can take 90 days or longer.

Action steps for New Haven taxpayers:

Gather all tax documents (W-2s, 1099s, receipts for deductions)
Use IRS-approved tax preparation software or work with a certified tax professional
File electronically before March 15 to avoid the mid-season rush
Select direct deposit to receive your refund faster
Double-check bank account numbers before submitting

The extended processing times mean errors or incomplete returns will face even longer delays. Ensure accuracy before filing.

New Senior Deductions Can Save You Thousands!

Single filers aged 65 and older can now claim a $6,000 deduction. Married couples filing jointly can deduct up to $12,000 if both spouses meet the age requirement.

This deduction applies to tax years 2025 through 2028 and is claimed using the new Schedule 1-A form.

Who qualifies:

You must be 65 or older by December 31, 2025
The deduction is available regardless of income level
You can claim this in addition to the standard deduction

Example calculation:

A married couple, both over 65, filing jointly with $80,000 in taxable income:

Standard deduction: $31,500
Senior deduction: $12,000
Total deductions: $43,500
New taxable income: $36,500

This reduces their federal tax liability by approximately $2,640, assuming a 22% tax bracket.

For New Haven seniors on fixed incomes, this deduction provides meaningful tax relief. Consult with your tax preparer to ensure you claim this correctly on Schedule 1-A.

Overtime and Tip Deductions: New Opportunities for Working Families

Two additional deductions benefit New Haven's working families:

Overtime Pay Deduction:

Employees can deduct qualified overtime pay up to $12,500 per return
Married couples filing jointly can deduct up to $25,000
Overtime must be documented on your W-2 in Box 14

Tip Deduction:

Tipped workers can deduct up to $25,000 annually in qualified tips
Tips must be reported to your employer and included on your W-2
Independent contractors cannot claim this deduction

Both deductions are claimed using Schedule 1-A. Proper documentation is essential. Save pay stubs, tip logs, and employer statements showing overtime hours and tip income.

Common mistake to avoid: Do not attempt to deduct unreported tips. All tip income must be properly reported to your employer and included on your W-2 to qualify for this deduction.

Connecticut Estate Tax Update: Higher Exemption Levels

Connecticut's estate tax exemption increased to $15 million per person beginning in 2026, up from $13.99 million in 2025. This exemption is indexed annually for inflation.

Married couples can now shield up to $30 million from Connecticut estate taxes through proper planning.

What this means for New Haven families:

If your estate is valued below $15 million, no Connecticut estate tax is due
Estates exceeding this threshold face progressive tax rates
Federal estate tax exemption remains separate at approximately $13.99 million per person

Estate planning strategies should be reviewed now if:

Your combined assets approach or exceed $15 million
You own significant real estate in New Haven or surrounding areas
You have not updated your estate plan in the last three years

Contact an estate planning attorney to discuss trust structures, gifting strategies, and beneficiary designations that may reduce your overall tax burden.

Local New Haven Tax Relief Programs Are Open Now!

Senior and Disabled Homeowners Tax Relief applications are currently being accepted through the New Haven Assessor's Office. This program provides property tax relief for qualifying residents.

Eligibility requirements:

Must be 65 or older, or permanently disabled
Must own and occupy the property as your primary residence
Income limitations apply (check with the Assessor's Office for current thresholds)

Application deadline: March 31, 2026

Additional Connecticut resources:

Volunteer Income Tax Assistance (VITA): Free tax preparation for households earning $64,000 or less
National Taxpayer Advocate Office: Call 1-877-777-4778 for help resolving serious IRS issues
Connecticut Department of Revenue Services: Offers guidance on state-specific tax questions

These programs can provide significant financial relief. Do not wait until the deadline – apply early to ensure processing.

The 2026 Standard Deduction Remains Unchanged

For tax planning purposes, the standard deduction for 2026 is:

$31,500 for married filing jointly
$15,750 for single filers
$23,625 for heads of household

These amounts remain unchanged from 2025. Taxpayers should evaluate whether itemizing deductions would provide greater tax savings, particularly with the new deductions available this year.

Why Professional Tax Preparation Delivers Measurable Results

Navigating 100+ tax code changes requires expertise. One documented case showed a taxpayer achieved $12,400 in reduced tax liability through proper documentation of business expenses and claiming newly available deductions.

The professional consultation fee was $3,500, generating a 3.5x return on investment.

Professional tax preparation helps you:

Identify all available deductions and credits
Properly document income and expenses
Navigate complex tax situations (self-employment, rental properties, investments)
Reduce audit risk through accurate filing
Maximize your tax refund legally

At Jose's Tax Service, we specialize in tax preparation for New Haven residents and small businesses. Our team stays current on federal and Connecticut tax law changes to ensure you receive every deduction you're entitled to claim.

Take Action Before February Ends!

Mark these critical dates on your calendar:

March 15, 2026: Deadline for S-Corporation and partnership returns
March 31, 2026: New Haven Senior & Disabled Homeowners Tax Relief application deadline
April 15, 2026: Individual tax return deadline
October 15, 2026: Extended filing deadline (if you file for an extension)

Your next steps:

Schedule your tax preparation appointment at Jose's Tax Service
Gather all tax documents and receipts
Review eligibility for new deductions (senior, overtime, tips)
Apply for local tax relief programs if you qualify
File electronically with direct deposit to receive your refund faster

Tax planning in 2026 requires understanding both new opportunities and operational challenges. The combination of new deductions and IRS staffing constraints means early preparation and professional guidance deliver the best results.

Contact our office today to discuss your specific tax situation and develop a strategy to maximize your tax refund this season.