Connecticut 2019 Regular Session

Connecticut House Bill HB06891 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1
2	2
	3	+	LCO No. 3236 1 of 2
3	4
4		-	LCO No. 5400 1 of 10
5		-
6		-	General Assembly Committee Bill No. 6891
	5	+	General Assembly Proposed Bill No. 6891
7	6		January Session, 2019
8		-	LCO No. ~~5400~~
	7	+	LCO No. 3236
9	8
10	9
11	10		Referred to Committee on HIGHER EDUCATION AND
12	11		EMPLOYMENT ADVANCEMENT
13	12
14	13
15	14		Introduced by:
16		-	(HED)
	15	+	REP. HADDAD, 54
	16	+	th Dist.
	17	+	SEN. FLEXER, 29
	18	+	th Dist.
	19	+
	20	+
17	21
18	22
19	23
20	24		AN ACT CONCERNING A DEDUCTION FROM THE PERSONAL
21	25		INCOME TAX FOR STUDENT LOAN INTEREST.
22	26		Be it enacted by the Senate and House of Representatives in General
23	27		Assembly convened:
24	28
25		-	Section 1. Subparagraph (B) of subdivision (20) of subsection (a) of 1
26		-	section 12-701 of the general statutes is repealed and the following is 2
27		-	substituted in lieu thereof (Effective July 1, 2019, and applicable to taxable 3
28		-	years commencing on or after January 1, 2020): 4
29		-	(B) There shall be subtracted therefrom: 5
30		-	(i) To the extent properly includable in gross income for federal 6
31		-	income tax purposes, any income with respect to which taxation by 7
32		-	any state is prohibited by federal law; 8
33		-	(ii) To the extent allowable under section 12-718, exempt dividends 9
34		-	paid by a regulated investment company; 10
35		-	(iii) To the extent properly includable in gross income for federal 11
36		-	income tax purposes, the amount of any refund or credit for 12
37		-	overpayment of income taxes imposed by this state, or any other state 13
38		-	Committee Bill No. 6891
	29	+	That title 12 of the general statutes be amended to establish a 1
	30	+	deduction from the personal income tax for student loan interest, 2
	31	+	provided (1) the taxpayer's filing status is any filing status except 3
	32	+	married filing separately, (2) no other person is claiming an exemption 4
	33	+	for the taxpayer on such other person's return, (3) the taxpayer is 5
	34	+	legally obligated to pay interest on a qualified student loan, (4) the 6
	35	+	taxpayer paid interest on a qualified student loan, and (5) the 7
	36	+	maximum annual modification shall be equal to the amount of interest 8
	37	+	paid on a qualified student loan, but (A) shall not exceed two thousand 9
	38	+	five hundred dollars for each taxpayer, and (B) shall be prorated or 10
	39	+	eliminated if the taxpayer's modified adjusted gross income is an 11
	40	+	amount that would cause the same deduction to be prorated or 12
	41	+	eliminated under federal law. 13 Proposed Bill No. 6891
39	42
40	43
41		-	LCO No. 5400 2 of 10
42		-
43		-	of the United States or a political subdivision thereof, or the District of 14
44		-	Columbia; 15
45		-	(iv) To the extent properly includable in gross income for federal 16
46		-	income tax purposes and not otherwise subtracted from federal 17
47		-	adjusted gross income pursuant to clause (x) of this subparagraph in 18
48		-	computing Connecticut adjusted gross income, any tier 1 railroad 19
49		-	retirement benefits; 20
50		-	(v) To the extent any additional allowance for depreciation under 21
51		-	Section 168(k) of the Internal Revenue Code for property placed in 22
52		-	service after September 27, 2017, was added to federal adjusted gross 23
53		-	income pursuant to subparagraph (A)(ix) of this subdivision in 24
54		-	computing Connecticut adjusted gross income, twenty-five per cent of 25
55		-	such additional allowance for depreciation in each of the four 26
56		-	succeeding taxable years; 27
57		-	(vi) To the extent properly includable in gross income for federal 28
58		-	income tax purposes, any interest income from obligations issued by or 29
59		-	on behalf of the state of Connecticut, any political subdivision thereof, 30
60		-	or public instrumentality, state or local authority, district or similar 31
61		-	public entity created under the laws of the state of Connecticut; 32
62		-	(vii) To the extent properly includable in determining the net gain 33
63		-	or loss from the sale or other disposition of capital assets for federal 34
64		-	income tax purposes, any gain from the sale or exchange of obligations 35
65		-	issued by or on behalf of the state of Connecticut, any political 36
66		-	subdivision thereof, or public instrumentality, state or local authority, 37
67		-	district or similar public entity created under the laws of the state of 38
68		-	Connecticut, in the income year such gain was recognized; 39
69		-	(viii) Any interest on indebtedness incurred or continued to 40
70		-	purchase or carry obligations or securities the interest on which is 41
71		-	subject to tax under this chapter but exempt from federal income tax, 42
72		-	to the extent that such interest on indebtedness is not deductible in 43
73		-	determining federal adjusted gross income and is attributable to a 44
74		-	Committee Bill No. 6891
75		-
76		-
77		-	LCO No. 5400 3 of 10
78		-
79		-	trade or business carried on by such individual; 45
80		-	(ix) Ordinary and necessary expenses paid or incurred during the 46
81		-	taxable year for the production or collection of income which is subject 47
82		-	to taxation under this chapter but exempt from federal income tax, or 48
83		-	the management, conservation or maintenance of property held for the 49
84		-	production of such income, and the amortizable bond premium for the 50
85		-	taxable year on any bond the interest on which is subject to tax under 51
86		-	this chapter but exempt from federal income tax, to the extent that 52
87		-	such expenses and premiums are not deductible in determining federal 53
88		-	adjusted gross income and are attributable to a trade or business 54
89		-	carried on by such individual; 55
90		-	(x) (I) For taxable years commencing prior to January 1, 2019, for a 56
91		-	person who files a return under the federal income tax as an 57
92		-	unmarried individual whose federal adjusted gross income for such 58
93		-	taxable year is less than fifty thousand dollars, or as a married 59
94		-	individual filing separately whose federal adjusted gross income for 60
95		-	such taxable year is less than fifty thousand dollars, or for a husband 61
96		-	and wife who file a return under the federal income tax as married 62
97		-	individuals filing jointly whose federal adjusted gross income for such 63
98		-	taxable year is less than sixty thousand dollars or a person who files a 64
99		-	return under the federal income tax as a head of household whose 65
100		-	federal adjusted gross income for such taxable year is less than sixty 66
101		-	thousand dollars, an amount equal to the Social Security benefits 67
102		-	includable for federal income tax purposes; 68
103		-	(II) For taxable years commencing prior to January 1, 2019, for a 69
104		-	person who files a return under the federal income tax as an 70
105		-	unmarried individual whose federal adjusted gross income for such 71
106		-	taxable year is fifty thousand dollars or more, or as a married 72
107		-	individual filing separately whose federal adjusted gross income for 73
108		-	such taxable year is fifty thousand dollars or more, or for a husband 74
109		-	and wife who file a return under the federal income tax as married 75
110		-	individuals filing jointly whose federal adjusted gross income from 76
111		-	Committee Bill No. 6891
112		-
113		-
114		-	LCO No. 5400 4 of 10
115		-
116		-	such taxable year is sixty thousand dollars or more or for a person who 77
117		-	files a return under the federal income tax as a head of household 78
118		-	whose federal adjusted gross income for such taxable year is sixty 79
119		-	thousand dollars or more, an amount equal to the difference between 80
120		-	the amount of Social Security benefits includable for federal income tax 81
121		-	purposes and the lesser of twenty-five per cent of the Social Security 82
122		-	benefits received during the taxable year, or twenty-five per cent of the 83
123		-	excess described in Section 86(b)(1) of the Internal Revenue Code; 84
124		-	(III) For the taxable year commencing January 1, 2019, and each 85
125		-	taxable year thereafter, for a person who files a return under the 86
126		-	federal income tax as an unmarried individual whose federal adjusted 87
127		-	gross income for such taxable year is less than seventy-five thousand 88
128		-	dollars, or as a married individual filing separately whose federal 89
129		-	adjusted gross income for such taxable year is less than seventy-five 90
130		-	thousand dollars, or for a husband and wife who file a return under 91
131		-	the federal income tax as married individuals filing jointly whose 92
132		-	federal adjusted gross income for such taxable year is less than one 93
133		-	hundred thousand dollars or a person who files a return under the 94
134		-	federal income tax as a head of household whose federal adjusted 95
135		-	gross income for such taxable year is less than one hundred thousand 96
136		-	dollars, an amount equal to the Social Security benefits includable for 97
137		-	federal income tax purposes; and 98
138		-	(IV) For the taxable year commencing January 1, 2019, and each 99
139		-	taxable year thereafter, for a person who files a return under the 100
140		-	federal income tax as an unmarried individual whose federal adjusted 101
141		-	gross income for such taxable year is seventy-five thousand dollars or 102
142		-	more, or as a married individual filing separately whose federal 103
143		-	adjusted gross income for such taxable year is seventy-five thousand 104
144		-	dollars or more, or for a husband and wife who file a return under the 105
145		-	federal income tax as married individuals filing jointly whose federal 106
146		-	adjusted gross income from such taxable year is one hundred 107
147		-	thousand dollars or more or for a person who files a return under the 108
148		-	federal income tax as a head of household whose federal adjusted 109
149		-	Committee Bill No. 6891
150		-
151		-
152		-	LCO No. 5400 5 of 10
153		-
154		-	gross income for such taxable year is one hundred thousand dollars or 110
155		-	more, an amount equal to the difference between the amount of Social 111
156		-	Security benefits includable for federal income tax purposes and the 112
157		-	lesser of twenty-five per cent of the Social Security benefits received 113
158		-	during the taxable year, or twenty-five per cent of the excess described 114
159		-	in Section 86(b)(1) of the Internal Revenue Code; 115
160		-	(xi) To the extent properly includable in gross income for federal 116
161		-	income tax purposes, any amount rebated to a taxpayer pursuant to 117
162		-	section 12-746; 118
163		-	(xii) To the extent properly includable in the gross income for 119
164		-	federal income tax purposes of a designated beneficiary, any 120
165		-	distribution to such beneficiary from any qualified state tuition 121
166		-	program, as defined in Section 529(b) of the Internal Revenue Code, 122
167		-	established and maintained by this state or any official, agency or 123
168		-	instrumentality of the state; 124
169		-	(xiii) To the extent allowable under section 12-701a, contributions to 125
170		-	accounts established pursuant to any qualified state tuition program, 126
171		-	as defined in Section 529(b) of the Internal Revenue Code, established 127
172		-	and maintained by this state or any official, agency or instrumentality 128
173		-	of the state; 129
174		-	(xiv) To the extent properly includable in gross income for federal 130
175		-	income tax purposes, the amount of any Holocaust victims' settlement 131
176		-	payment received in the taxable year by a Holocaust victim; 132
177		-	(xv) To the extent properly includable in gross income for federal 133
178		-	income tax purposes of an account holder, as defined in section 31-134
179		-	51ww, interest earned on funds deposited in the individual 135
180		-	development account, as defined in section 31-51ww, of such account 136
181		-	holder; 137
182		-	(xvi) To the extent properly includable in the gross income for 138
183		-	federal income tax purposes of a designated beneficiary, as defined in 139
184		-	Committee Bill No. 6891
185		-
186		-
187		-	LCO No. 5400 6 of 10
188		-
189		-	section 3-123aa, interest, dividends or capital gains earned on 140
190		-	contributions to accounts established for the designated beneficiary 141
191		-	pursuant to the Connecticut Homecare Option Program for the Elderly 142
192		-	established by sections 3-123aa to 3-123ff, inclusive; 143
193		-	(xvii) To the extent properly includable in gross income for federal 144
194		-	income tax purposes, any income received from the United States 145
195		-	government as retirement pay for a retired member of (I) the Armed 146
196		-	Forces of the United States, as defined in Section 101 of Title 10 of the 147
197		-	United States Code, or (II) the National Guard, as defined in Section 148
198		-	101 of Title 10 of the United States Code; 149
199		-	(xviii) To the extent properly includable in gross income for federal 150
200		-	income tax purposes for the taxable year, any income from the 151
201		-	discharge of indebtedness in connection with any reacquisition, after 152
202		-	December 31, 2008, and before January 1, 2011, of an applicable debt 153
203		-	instrument or instruments, as those terms are defined in Section 108 of 154
204		-	the Internal Revenue Code, as amended by Section 1231 of the 155
205		-	American Recovery and Reinvestment Act of 2009, to the extent any 156
206		-	such income was added to federal adjusted gross income pursuant to 157
207		-	subparagraph (A)(xi) of this subdivision in computing Connecticut 158
208		-	adjusted gross income for a preceding taxable year; 159
209		-	(xix) To the extent not deductible in determining federal adjusted 160
210		-	gross income, the amount of any contribution to a manufacturing 161
211		-	reinvestment account established pursuant to section 32-9zz in the 162
212		-	taxable year that such contribution is made; 163
213		-	(xx) To the extent properly includable in gross income for federal 164
214		-	income tax purposes, (I) for the taxable year commencing January 1, 165
215		-	2015, ten per cent of the income received from the state teachers' 166
216		-	retirement system, (II) for the taxable years commencing January 1, 167
217		-	2016, January 1, 2017, and January 1, 2018, twenty-five per cent of the 168
218		-	income received from the state teachers' retirement system, and (III) 169
219		-	for the taxable year commencing January 1, 2019, and each taxable year 170
220		-	thereafter, fifty per cent of the income received from the state teachers' 171
221		-	Committee Bill No. 6891
222		-
223		-
224		-	LCO No. 5400 7 of 10
225		-
226		-	retirement system or the percentage, if applicable, pursuant to clause 172
227		-	(xxi) of this subparagraph; 173
228		-	(xxi) To the extent properly includable in gross income for federal 174
229		-	income tax purposes, except for retirement benefits under clause (iv) of 175
230		-	this subparagraph and retirement pay under clause (xvii) of this 176
231		-	subparagraph, for a person who files a return under the federal income 177
232		-	tax as an unmarried individual whose federal adjusted gross income 178
233		-	for such taxable year is less than seventy-five thousand dollars, or as a 179
234		-	married individual filing separately whose federal adjusted gross 180
235		-	income for such taxable year is less than seventy-five thousand dollars, 181
236		-	or as a head of household whose federal adjusted gross income for 182
237		-	such taxable year is less than seventy-five thousand dollars, or for a 183
238		-	husband and wife who file a return under the federal income tax as 184
239		-	married individuals filing jointly whose federal adjusted gross income 185
240		-	for such taxable year is less than one hundred thousand dollars, (I) for 186
241		-	the taxable year commencing January 1, 2019, fourteen per cent of any 187
242		-	pension or annuity income, (II) for the taxable year commencing 188
243		-	January 1, 2020, twenty-eight per cent of any pension or annuity 189
244		-	income, (III) for the taxable year commencing January 1, 2021, forty-190
245		-	two per cent of any pension or annuity income, (IV) for the taxable 191
246		-	year commencing January 1, 2022, fifty-six per cent of any pension or 192
247		-	annuity income, (V) for the taxable year commencing January 1, 2023, 193
248		-	seventy per cent of any pension or annuity income, (VI) for the taxable 194
249		-	year commencing January 1, 2024, eighty-four per cent of any pension 195
250		-	or annuity income, and (VII) for the taxable year commencing January 196
251		-	1, 2025, and each taxable year thereafter, any pension or annuity 197
252		-	income; 198
253		-	(xxii) The amount of lost wages and medical, travel and housing 199
254		-	expenses, not to exceed ten thousand dollars in the aggregate, incurred 200
255		-	by a taxpayer during the taxable year in connection with the donation 201
256		-	to another person of an organ for organ transplantation occurring on 202
257		-	or after January 1, 2017; 203
258		-	Committee Bill No. 6891
259		-
260		-
261		-	LCO No. 5400 8 of 10
262		-
263		-	(xxiii) To the extent properly includable in gross income for federal 204
264		-	income tax purposes, the amount of any financial assistance received 205
265		-	from the Crumbling Foundations Assistance Fund or paid to or on 206
266		-	behalf of the owner of a residential building pursuant to sections 8-442 207
267		-	and 8-443; [, and] 208
268		-	(xxiv) To the extent properly includable in gross income for federal 209
269		-	income tax purposes, the amount calculated pursuant to subsection (b) 210
270		-	of section 12-704g for income received by a general partner of a 211
271		-	venture capital fund, as defined in 17 CFR 275.203(l)-1, as amended 212
272		-	from time to time; [and] 213
273		-	(xxv) To the extent any portion of a deduction under Section 179 of 214
274		-	the Internal Revenue Code was added to federal adjusted gross income 215
275		-	pursuant to subparagraph (A)(xiv) of this subdivision in computing 216
276		-	Connecticut adjusted gross income, twenty-five per cent of such 217
277		-	disallowed portion of the deduction in each of the four succeeding 218
278		-	taxable years; and 219
279		-	(xxvi) To the extent not deductible in determining federal adjusted 220
280		-	gross income, and to the extent allowable under section 2 of this act, 221
281		-	the amount of payments made during the taxable year for interest on a 222
282		-	student loan. 223
283		-	Sec. 2. (NEW) (Effective July 1, 2019, and applicable to taxable years 224
284		-	commencing on or after January 1, 2020) (a) For the purposes of this 225
285		-	section: 226
286		-	(1) "Qualified student loan" means a loan taken out solely to pay 227
287		-	qualified education expenses (A) for the taxpayer, the taxpayer's 228
288		-	spouse or a person who was a dependent of the taxpayer at the time 229
289		-	when the taxpayer took out the loan, (B) paid or incurred within a 230
290		-	reasonable period of time before or after the taxpayer took out the 231
291		-	loan, (C) from a private or governmental lender, and (D) for education 232
292		-	provided during an academic period for an eligible student; 233
293		-	Committee Bill No. 6891
294		-
295		-
296		-	LCO No. 5400 9 of 10
297		-
298		-	(2) "Qualified education expenses" means the total costs of attending 234
299		-	an eligible institution of higher education, including graduate school, 235
300		-	and includes amounts paid for the following items: (A) Tuition and 236
301		-	fees; (B) room and board, provided the cost of room and board 237
302		-	qualifies only to the extent that it is not more than the greater of (i) the 238
303		-	allowance for room and board, as determined by the eligible 239
304		-	institution of higher education, that was included in the cost of 240
305		-	attendance for a particular academic period and living arrangement of 241
306		-	the student, or (ii) the actual amount charged if the student is residing 242
307		-	in housing owned or operated by the eligible institution of higher 243
308		-	education; (C) books, supplies and equipment; and (D) other necessary 244
309		-	expenses, including, but not limited to, transportation; 245
310		-	(3) "Eligible institution of higher education" means any institution of 246
311		-	higher education that is eligible to participate in a student aid program 247
312		-	administered by the United States Department of Education; and 248
313		-	(4) "Eligible student" means a student who is or was enrolled at least 249
314		-	half-time in a certificate or degree program at an eligible institution of 250
315		-	higher education. 251
316		-	(b) The maximum annual modification under subparagraph (B)(xxi) 252
317		-	of subdivision (20) of subsection (a) of section 12-701 of the general 253
318		-	statutes, as amended by this act, shall be equal to the amount of 254
319		-	interest paid on a qualified student loan, but shall not exceed two 255
320		-	thousand five hundred dollars for each taxpayer, provided (1) the 256
321		-	taxpayer's filing status is any filing status except married filing 257
322		-	separately, (2) the taxpayer's modified adjusted gross income is not 258
323		-	more than seventy-five thousand dollars for taxpayers whose filing 259
324		-	status is single, head of household or qualifying widow or widower or 260
325		-	not more than one hundred fifty thousand dollars for taxpayers whose 261
326		-	filing status is married filing jointly, (3) no other person is claiming an 262
327		-	exemption for the taxpayer on such other person's return, (4) the 263
328		-	taxpayer is legally obligated to pay interest on a qualified student loan, 264
329		-	and (5) the taxpayer paid interest on a qualified student loan. 265
330		-	Committee Bill No. 6891
331		-
332		-
333		-	LCO No. 5400 10 of 10
334		-
335		-	This act shall take effect as follows and shall amend the following
336		-	sections:
337		-
338		-	Section 1 July 1, 2019, and
339		-	applicable to taxable years
340		-	commencing on or after
341		-	January 1, 2020
342		-	12-701(a)(20)(B)
343		-	Sec. 2 July 1, 2019, and
344		-	applicable to taxable years
345		-	commencing on or after
346		-	January 1, 2020
347		-	New section
	44	+	LCO No. 3236 2 of 2
348	45
349	46		Statement of Purpose:
350		-	To provide a tax deduction from personal income tax for the payment
351		-	of student loan interest.
352		-	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline,
353		-	except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is
354		-	not underlined.]
355		-
356		-	Co-Sponsors: REP. HADDAD, 54th Dist.; SEN. FLEXER, 29th Dist.
357		-	REP. MICHEL, 146th Dist.
358		-
359		-	H.B. 6891
360		-
361		-
	47	+	To provide tax relief to persons paying student loan interest by
	48	+	establishing a deduction from the personal income tax for student loan
	49	+	interest.