CT taxes any federal tax-free bond income, when that bond is issued by a state other than CT.
Munis are typically exempt from federal income tax. They are often excused from local and state tax as well, particularly when the bond’s investor lives in the state in which the bond was issued.
Under 1991 Conn. Pub. Acts 3, §52(a)(20) (June Spec. Sess.), any interest income from State and municipal government obligations (other than obligations of the State of Connecticut or Connecticut municipalities) is, to the extent properly not includable in gross income for federal income tax purposes, to be added to federal adjusted gross income in computing Connecticut adjusted gross income.