Connecticut 2019 Regular Session

Connecticut House Bill HB06174 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2	2
3		-	LCO \\PRDFS1\HCOUSERS\BARRYJN\WS\2019HB-06174-R01-
4		-	HB.docx
5		-	1 of 9
	3	+	LCO No. 3343 1 of 9
6	4
7		-	General Assembly ~~Substitute~~ Bill No. 6174
	5	+	General Assembly Raised Bill No. 6174
8	6		January Session, 2019
	7	+	LCO No. 3343
	8	+
	9	+
	10	+	Referred to Committee on AGING
	11	+
	12	+
	13	+	Introduced by:
	14	+	(AGE)
	15	+
9	16
10	17
11	18
12	19		AN ACT EXEMPTING SOC IAL SECURITY BENEFITS FROM STATE
13	20		INCOME TAX AND STUDY ING THE EFFECT OF THE EXEMPTION ON
14	21		TAXPAYER MIGRATION O UT OF STATE.
15	22		Be it enacted by the Senate and House of Representatives in General
16	23		Assembly convened:
17	24
18	25		Section 1. Subparagraph (B) of subdivision (20) of subsection (a) of 1
19	26		section 12-701 of the general statutes is repealed and the following is 2
20	27		substituted in lieu thereof (Effective from passage and applicable to taxable 3
21	28		years commencing on or after January 1, 2019): 4
22	29		(B) There shall be subtracted therefrom: 5
23	30		(i) To the extent properly includable in gross income for federal 6
24	31		income tax purposes, any income with respect to which taxation by 7
25	32		any state is prohibited by federal law; 8
26	33		(ii) To the extent allowable under section 12-718, exempt dividends 9
27	34		paid by a regulated investment company; 10
28	35		(iii) To the extent properly includable in gross income for federal 11
29		-	income tax purposes, the amount of any refund or credit for 12
	36	+	income tax purposes, the amount of any refund or credit for 12 Raised Bill No. 6174
	37	+
	38	+
	39	+
	40	+	LCO No. 3343 2 of 9
	41	+
30	42		overpayment of income taxes imposed by this state, or any other state 13
31	43		of the United States or a political subdivision thereof, or the District of 14
32	44		Columbia; 15
33	45		(iv) To the extent properly includable in gross income for federal 16
34		-	income tax purposes and not otherwise subtracted from federal 17 Substitute Bill No. 6174
35		-
36		-
37		-	LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2019HB-06174-
38		-	R01-HB.docx }
39		-	2 of 9
40		-
	46	+	income tax purposes and not otherwise subtracted from federal 17
41	47		adjusted gross income pursuant to clause (x) of this subparagraph in 18
42	48		computing Connecticut adjusted gross income, any tier 1 railroad 19
43	49		retirement benefits; 20
44	50		(v) To the extent any additional allowance for depreciation under 21
45	51		Section 168(k) of the Internal Revenue Code for property placed in 22
46	52		service after September 27, 2017, was added to federal adjusted gross 23
47	53		income pursuant to subparagraph (A)(ix) of this subdivision in 24
48	54		computing Connecticut adjusted gross income, twenty-five per cent of 25
49	55		such additional allowance for depreciation in each of the four 26
50	56		succeeding taxable years; 27
51	57		(vi) To the extent properly includable in gross income for federal 28
52	58		income tax purposes, any interest income from obligations issued by or 29
53	59		on behalf of the state of Connecticut, any political subdivision thereof, 30
54	60		or public instrumentality, state or local authority, district or similar 31
55	61		public entity created under the laws of the state of Connecticut; 32
56	62		(vii) To the extent properly includable in determining the net gain 33
57	63		or loss from the sale or other disposition of capital assets for federal 34
58	64		income tax purposes, any gain from the sale or exchange of obligations 35
59	65		issued by or on behalf of the state of Connecticut, any political 36
60	66		subdivision thereof, or public instrumentality, state or local authority, 37
61	67		district or similar public entity created under the laws of the state of 38
62	68		Connecticut, in the income year such gain was recognized; 39
63	69		(viii) Any interest on indebtedness incurred or continued to 40
64	70		purchase or carry obligations or securities the interest on which is 41
65	71		subject to tax under this chapter but exempt from federal income tax, 42
66	72		to the extent that such interest on indebtedness is not deductible in 43
67		-	determining federal adjusted gross income and is attributable to a 44
	73	+	determining federal adjusted gross income and is attributable to a 44 Raised Bill No. 6174
	74	+
	75	+
	76	+
	77	+	LCO No. 3343 3 of 9
	78	+
68	79		trade or business carried on by such individual; 45
69	80		(ix) Ordinary and necessary expenses paid or incurred during the 46
70	81		taxable year for the production or collection of income which is subject 47
71		-	to taxation under this chapter but exempt from federal income tax, or 48 Substitute Bill No. 6174
72		-
73		-
74		-	LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2019HB-06174-
75		-	R01-HB.docx }
76		-	3 of 9
77		-
	82	+	to taxation under this chapter but exempt from federal income tax, or 48
78	83		the management, conservation or maintenance of property held for the 49
79	84		production of such income, and the amortizable bond premium for the 50
80	85		taxable year on any bond the interest on which is subject to tax under 51
81	86		this chapter but exempt from federal income tax, to the extent that 52
82	87		such expenses and premiums are not deductible in determining federal 53
83	88		adjusted gross income and are attributable to a trade or business 54
84	89		carried on by such individual; 55
85	90		(x) (I) For taxable years commencing prior to January 1, 2019, for a 56
86	91		person who files a return under the federal income tax as an 57
87	92		unmarried individual whose federal adjusted gross income for such 58
88	93		taxable year is less than fifty thousand dollars, or as a married 59
89	94		individual filing separately whose federal adjusted gross income for 60
90	95		such taxable year is less than fifty thousand dollars, or for a husband 61
91	96		and wife who file a return under the federal income tax as married 62
92	97		individuals filing jointly whose federal adjusted gross income for such 63
93	98		taxable year is less than sixty thousand dollars or a person who files a 64
94	99		return under the federal income tax as a head of household whose 65
95	100		federal adjusted gross income for such taxable year is less than sixty 66
96	101		thousand dollars, an amount equal to the Social Security benefits 67
97	102		includable for federal income tax purposes; 68
98	103		(II) For taxable years commencing prior to January 1, 2019, for a 69
99	104		person who files a return under the federal income tax as an 70
100	105		unmarried individual whose federal adjusted gross income for such 71
101	106		taxable year is fifty thousand dollars or more, or as a married 72
102	107		individual filing separately whose federal adjusted gross income for 73
103	108		such taxable year is fifty thousand dollars or more, or for a husband 74
104	109		and wife who file a return under the federal income tax as married 75
105	110		individuals filing jointly whose federal adjusted gross income from 76
106		-	such taxable year is sixty thousand dollars or more or for a person who 77
	111	+	such taxable year is sixty thousand dollars or more or for a person who 77 Raised Bill No. 6174
	112	+
	113	+
	114	+
	115	+	LCO No. 3343 4 of 9
	116	+
107	117		files a return under the federal income tax as a head of household 78
108	118		whose federal adjusted gross income for such taxable year is sixty 79
109	119		thousand dollars or more, an amount equal to the difference between 80
110		-	the amount of Social Security benefits includable for federal income tax 81 Substitute Bill No. 6174
111		-
112		-
113		-	LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2019HB-06174-
114		-	R01-HB.docx }
115		-	4 of 9
116		-
	120	+	the amount of Social Security benefits includable for federal income tax 81
117	121		purposes and the lesser of twenty-five per cent of the Social Security 82
118	122		benefits received during the taxable year, or twenty-five per cent of the 83
119	123		excess described in Section 86(b)(1) of the Internal Revenue Code; 84
120	124		(III) For the taxable year commencing January 1, 2019, and each 85
121	125		taxable year thereafter, for a person who files a return under the 86
122	126		federal income tax as an unmarried individual whose federal adjusted 87
123	127		gross income for such taxable year is less than [seventy-five] one 88
124	128		hundred thousand dollars, or as a married individual filing separately 89
125	129		whose federal adjusted gross income for such taxable year is less than 90
126	130		[seventy-five] one hundred thousand dollars, or for a husband and 91
127	131		wife who file a return under the federal income tax as married 92
128	132		individuals filing jointly whose federal adjusted gross income for such 93
129	133		taxable year is less than one hundred twenty-five thousand dollars or a 94
130	134		person who files a return under the federal income tax as a head of 95
131	135		household whose federal adjusted gross income for such taxable year 96
132	136		is less than one hundred twenty-five thousand dollars, an amount 97
133	137		equal to the Social Security benefits includable for federal income tax 98
134	138		purposes; and 99
135	139		(IV) For the taxable year commencing January 1, 2019, and each 100
136	140		taxable year thereafter, for a person who files a return under the 101
137	141		federal income tax as an unmarried individual whose federal adjusted 102
138	142		gross income for such taxable year is [seventy-five] one hundred 103
139	143		thousand dollars or more, or as a married individual filing separately 104
140	144		whose federal adjusted gross income for such taxable year is [seventy-105
141	145		five] one hundred thousand dollars or more, or for a husband and wife 106
142	146		who file a return under the federal income tax as married individuals 107
143	147		filing jointly whose federal adjusted gross income from such taxable 108
144	148		year is one hundred twenty-five thousand dollars or more or for a 109
145	149		person who files a return under the federal income tax as a head of 110
146		-	household whose federal adjusted gross income for such taxable year 111
	150	+	household whose federal adjusted gross income for such taxable year 111 Raised Bill No. 6174
	151	+
	152	+
	153	+
	154	+	LCO No. 3343 5 of 9
	155	+
147	156		is one hundred twenty-five thousand dollars or more, an amount equal 112
148	157		to the difference between the amount of Social Security benefits 113
149		-	includable for federal income tax purposes and the lesser of twenty-114 Substitute Bill No. 6174
150		-
151		-
152		-	LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2019HB-06174-
153		-	R01-HB.docx }
154		-	5 of 9
155		-
	158	+	includable for federal income tax purposes and the lesser of twenty-114
156	159		five per cent of the Social Security benefits received during the taxable 115
157	160		year, or twenty-five per cent of the excess described in Section 86(b)(1) 116
158	161		of the Internal Revenue Code; 117
159	162		(xi) To the extent properly includable in gross income for federal 118
160	163		income tax purposes, any amount rebated to a taxpayer pursuant to 119
161	164		section 12-746; 120
162	165		(xii) To the extent properly includable in the gross income for 121
163	166		federal income tax purposes of a designated beneficiary, any 122
164	167		distribution to such beneficiary from any qualified state tuition 123
165	168		program, as defined in Section 529(b) of the Internal Revenue Code, 124
166	169		established and maintained by this state or any official, agency or 125
167	170		instrumentality of the state; 126
168	171		(xiii) To the extent allowable under section 12-701a, contributions to 127
169	172		accounts established pursuant to any qualified state tuition program, 128
170	173		as defined in Section 529(b) of the Internal Revenue Code, established 129
171	174		and maintained by this state or any official, agency or instrumentality 130
172	175		of the state; 131
173	176		(xiv) To the extent properly includable in gross income for federal 132
174	177		income tax purposes, the amount of any Holocaust victims' settlement 133
175	178		payment received in the taxable year by a Holocaust victim; 134
176	179		(xv) To the extent properly includable in gross income for federal 135
177	180		income tax purposes of an account holder, as defined in section 31-136
178	181		51ww, interest earned on funds deposited in the individual 137
179	182		development account, as defined in section 31-51ww, of such account 138
180	183		holder; 139
181	184		(xvi) To the extent properly includable in the gross income for 140
182	185		federal income tax purposes of a designated beneficiary, as defined in 141
183		-	section 3-123aa, interest, dividends or capital gains earned on 142
	186	+	section 3-123aa, interest, dividends or capital gains earned on 142 Raised Bill No. 6174
	187	+
	188	+
	189	+
	190	+	LCO No. 3343 6 of 9
	191	+
184	192		contributions to accounts established for the designated beneficiary 143
185	193		pursuant to the Connecticut Homecare Option Program for the Elderly 144
186		-	established by sections 3-123aa to 3-123ff, inclusive; 145 Substitute Bill No. 6174
187		-
188		-
189		-	LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2019HB-06174-
190		-	R01-HB.docx }
191		-	6 of 9
192		-
	194	+	established by sections 3-123aa to 3-123ff, inclusive; 145
193	195		(xvii) To the extent properly includable in gross income for federal 146
194	196		income tax purposes, any income received from the United States 147
195	197		government as retirement pay for a retired member of (I) the Armed 148
196	198		Forces of the United States, as defined in Section 101 of Title 10 of the 149
197	199		United States Code, or (II) the National Guard, as defined in Section 150
198	200		101 of Title 10 of the United States Code; 151
199	201		(xviii) To the extent properly includable in gross income for federal 152
200	202		income tax purposes for the taxable year, any income from the 153
201	203		discharge of indebtedness in connection with any reacquisition, after 154
202	204		December 31, 2008, and before January 1, 2011, of an applicable debt 155
203	205		instrument or instruments, as those terms are defined in Section 108 of 156
204	206		the Internal Revenue Code, as amended by Section 1231 of the 157
205	207		American Recovery and Reinvestment Act of 2009, to the extent any 158
206	208		such income was added to federal adjusted gross income pursuant to 159
207	209		subparagraph (A)(xi) of this subdivision in computing Connecticut 160
208	210		adjusted gross income for a preceding taxable year; 161
209	211		(xix) To the extent not deductible in determining federal adjusted 162
210	212		gross income, the amount of any contribution to a manufacturing 163
211	213		reinvestment account established pursuant to section 32-9zz in the 164
212	214		taxable year that such contribution is made; 165
213	215		(xx) To the extent properly includable in gross income for federal 166
214	216		income tax purposes, (I) for the taxable year commencing January 1, 167
215	217		2015, ten per cent of the income received from the state teachers' 168
216	218		retirement system, (II) for the taxable years commencing January 1, 169
217	219		2016, January 1, 2017, and January 1, 2018, twenty-five per cent of the 170
218	220		income received from the state teachers' retirement system, and (III) 171
219	221		for the taxable year commencing January 1, 2019, and each taxable year 172
220	222		thereafter, fifty per cent of the income received from the state teachers' 173
221		-	retirement system or the percentage, if applicable, pursuant to clause 174
	223	+	retirement system or the percentage, if applicable, pursuant to clause 174 Raised Bill No. 6174
	224	+
	225	+
	226	+
	227	+	LCO No. 3343 7 of 9
	228	+
222	229		(xxi) of this subparagraph; 175
223	230		(xxi) To the extent properly includable in gross income for federal 176
224		-	income tax purposes, except for retirement benefits under clause (iv) of 177 Substitute Bill No. 6174
225		-
226		-
227		-	LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2019HB-06174-
228		-	R01-HB.docx }
229		-	7 of 9
230		-
	231	+	income tax purposes, except for retirement benefits under clause (iv) of 177
231	232		this subparagraph and retirement pay under clause (xvii) of this 178
232	233		subparagraph, for a person who files a return under the federal income 179
233	234		tax as an unmarried individual whose federal adjusted gross income 180
234	235		for such taxable year is less than seventy-five thousand dollars, or as a 181
235	236		married individual filing separately whose federal adjusted gross 182
236	237		income for such taxable year is less than seventy-five thousand dollars, 183
237	238		or as a head of household whose federal adjusted gross income for 184
238	239		such taxable year is less than seventy-five thousand dollars, or for a 185
239	240		husband and wife who file a return under the federal income tax as 186
240	241		married individuals filing jointly whose federal adjusted gross income 187
241	242		for such taxable year is less than one hundred thousand dollars, (I) for 188
242	243		the taxable year commencing January 1, 2019, fourteen per cent of any 189
243	244		pension or annuity income, (II) for the taxable year commencing 190
244	245		January 1, 2020, twenty-eight per cent of any pension or annuity 191
245	246		income, (III) for the taxable year commencing January 1, 2021, forty-192
246	247		two per cent of any pension or annuity income, (IV) for the taxable 193
247	248		year commencing January 1, 2022, fifty-six per cent of any pension or 194
248	249		annuity income, (V) for the taxable year commencing January 1, 2023, 195
249	250		seventy per cent of any pension or annuity income, (VI) for the taxable 196
250	251		year commencing January 1, 2024, eighty-four per cent of any pension 197
251	252		or annuity income, and (VII) for the taxable year commencing January 198
252	253		1, 2025, and each taxable year thereafter, any pension or annuity 199
253	254		income; 200
254	255		(xxii) The amount of lost wages and medical, travel and housing 201
255	256		expenses, not to exceed ten thousand dollars in the aggregate, incurred 202
256	257		by a taxpayer during the taxable year in connection with the donation 203
257	258		to another person of an organ for organ transplantation occurring on 204
258	259		or after January 1, 2017; 205
259	260		(xxiii) To the extent properly includable in gross income for federal 206
260		-	income tax purposes, the amount of any financial assistance received 207
	261	+	income tax purposes, the amount of any financial assistance received 207 Raised Bill No. 6174
	262	+
	263	+
	264	+
	265	+	LCO No. 3343 8 of 9
	266	+
261	267		from the Crumbling Foundations Assistance Fund or paid to or on 208
262	268		behalf of the owner of a residential building pursuant to sections 8-442 209
263		-	and 8-443; [, and] 210 Substitute Bill No. 6174
264		-
265		-
266		-	LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2019HB-06174-
267		-	R01-HB.docx }
268		-	8 of 9
269		-
	269	+	and 8-443; [, and] 210
270	270		(xxiv) To the extent properly includable in gross income for federal 211
271	271		income tax purposes, the amount calculated pursuant to subsection (b) 212
272	272		of section 12-704g for income received by a general partner of a 213
273	273		venture capital fund, as defined in 17 CFR 275.203(l)-1, as amended 214
274	274		from time to time; and 215
275	275		(xxv) To the extent any portion of a deduction under Section 179 of 216
276	276		the Internal Revenue Code was added to federal adjusted gross income 217
277	277		pursuant to subparagraph (A)(xiv) of this subdivision in computing 218
278	278		Connecticut adjusted gross income, twenty-five per cent of such 219
279	279		disallowed portion of the deduction in each of the four succeeding 220
280	280		taxable years. 221
281		-	Sec. 2. (Effective from passage) The Commissioner of Revenue ~~Services~~ 222
282		-	shall study any change in migration out of the state of ~~taxpayers sixty-~~223
283		-	two years of age and older after Social Security benefits ~~are fully~~ 224
284		-	exempted from income tax for certain income brackets ~~pursuant to~~ 225
285		-	section 12-701 of the general statutes, as amended by this ~~act. Not later~~ 226
286		-	than July 1, 2020, the commissioner shall file a report in ~~accordance~~ 227
287		-	with the provisions of section 11-4a of the general statutes ~~with the~~ 228
288		-	joint standing committee of the General Assembly having ~~cognizance~~ 229
289		-	of matters relating to finance, revenue and bonding. The ~~report shall~~ 230
290		-	include, but not be limited to: (1) Any change in migration ~~of such~~ 231
291		-	taxpayers out of state from the effective date of this section to ~~the~~ 232
292		-	taxable year commencing January 1, 2020, (2) any change in state ~~tax~~ 233
293		-	revenue related to any decrease in migration of such taxpayers, (3) ~~any~~ 234
294		-	projected impact on state revenues in fiscal years 2021 to 2025, 235
	281	+	Sec. 2. (NEW) (Effective from passage) The Commissioner of Revenue 222
	282	+	Services shall study any change in migration out of the state of 223
	283	+	taxpayers sixty-two years of age and older after Social Security benefits 224
	284	+	are fully exempted from income tax for certain income brackets 225
	285	+	pursuant to section 12-701 of the general statutes, as amended by this 226
	286	+	act. Not later than July 1, 2020, the commissioner shall file a report in 227
	287	+	accordance with the provisions of section 11-4a of the general statutes 228
	288	+	with the joint standing committee of the General Assembly having 229
	289	+	cognizance of matters relating to finance, revenue and bonding. The 230
	290	+	report shall include, but not be limited to: (1) Any change in migration 231
	291	+	of such taxpayers out of state from the effective date of this section to 232
	292	+	the taxable year commencing January 1, 2020, (2) any change in state 233
	293	+	tax revenue related to any decrease in migration of such taxpayers, (3) 234
	294	+	any projected impact on state revenues in fiscal years 2021 to 2025, 235
295	295		inclusive, of fully exempting Social Security benefits from state income 236
296	296		tax for residents in certain income brackets, and (4) projected impact 237
297	297		on state revenues in fiscal years 2021 to 2025, inclusive, of fully 238
298	298		exempting Social Security benefits from state income tax for residents 239
299		-	in all income brackets. 240
	299	+	in all income brackets. 240 Raised Bill No. 6174
	300	+
	301	+
	302	+
	303	+	LCO No. 3343 9 of 9
	304	+
300	305		This act shall take effect as follows and shall amend the following
301	306		sections:
302		-	Substitute Bill No. 6174
303		-
304		-
305		-	LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2019HB-06174-
306		-	R01-HB.docx }
307		-	9 of 9
308	307
309	308		Section 1 from passage and
310	309		applicable to taxable years
311	310		commencing on or after
312	311		January 1, 2019
313	312		12-701(a)(20)(B)
314	313		Sec. 2 from passage New section
315	314
316		-	Statement of Legislative Commissioners:
317		-	In section 2, "(NEW)" was removed before the effective date for
318		-	accuracy.
319		-
320		-	AGE Joint Favorable Subst. -LCO
	315	+	Statement of Purpose:
	316	+	To raise the income level at which Social Security benefits may be
	317	+	deducted from state income tax and study whether the deductions
	318	+	decrease the numbers of taxpayers age sixty-two and older leaving the
	319	+	state.
	320	+	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline,
	321	+	except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is
	322	+	not underlined.]
321	323