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General Assembly Raised Bill No. 7411
January Session, 2019
LCO No. 6797
Referred to Committee on FINANCE, REVENUE AND
BONDING
Introduced by:
(FIN)
AN ACT ESTABLISHING A PERSONAL INCOME TAX DEDUCTION
FOR INDIVIDUAL HEALTH INSURANCE PREMIUM PAYMENTS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Subparagraph (B) of subdivision (20) of subsection (a) of 1
section 12-701 of the general statutes is repealed and the following is 2
substituted in lieu thereof (Effective July 1, 2019, and applicable to taxable 3
years commencing on or after January 1, 2019): 4
(B) There shall be subtracted therefrom: 5
(i) To the extent properly includable in gross income for federal 6
income tax purposes, any income with respect to which taxation by 7
any state is prohibited by federal law; 8
(ii) To the extent allowable under section 12-718, exempt dividends 9
paid by a regulated investment company; 10
(iii) To the extent properly includable in gross income for federal 11
income tax purposes, the amount of any refund or credit for 12
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overpayment of income taxes imposed by this state, or any other state 13
of the United States or a political subdivision thereof, or the District of 14
Columbia; 15
(iv) To the extent properly includable in gross income for federal 16
income tax purposes and not otherwise subtracted from federal 17
adjusted gross income pursuant to clause (x) of this subparagraph in 18
computing Connecticut adjusted gross income, any tier 1 railroad 19
retirement benefits; 20
(v) To the extent any additional allowance for depreciation under 21
Section 168(k) of the Internal Revenue Code for property placed in 22
service after September 27, 2017, was added to federal adjusted gross 23
income pursuant to subparagraph (A)(ix) of this subdivision in 24
computing Connecticut adjusted gross income, twenty-five per cent of 25
such additional allowance for depreciation in each of the four 26
succeeding taxable years; 27
(vi) To the extent properly includable in gross income for federal 28
income tax purposes, any interest income from obligations issued by or 29
on behalf of the state of Connecticut, any political subdivision thereof, 30
or public instrumentality, state or local authority, district or similar 31
public entity created under the laws of the state of Connecticut; 32
(vii) To the extent properly includable in determining the net gain 33
or loss from the sale or other disposition of capital assets for federal 34
income tax purposes, any gain from the sale or exchange of obligations 35
issued by or on behalf of the state of Connecticut, any political 36
subdivision thereof, or public instrumentality, state or local authority, 37
district or similar public entity created under the laws of the state of 38
Connecticut, in the income year such gain was recognized; 39
(viii) Any interest on indebtedness incurred or continued to 40
purchase or carry obligations or securities the interest on which is 41
subject to tax under this chapter but exempt from federal income tax, 42
to the extent that such interest on indebtedness is not deductible in 43
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determining federal adjusted gross income and is attributable to a 44
trade or business carried on by such individual; 45
(ix) Ordinary and necessary expenses paid or incurred during the 46
taxable year for the production or collection of income which is subject 47
to taxation under this chapter but exempt from federal income tax, or 48
the management, conservation or maintenance of property held for the 49
production of such income, and the amortizable bond premium for the 50
taxable year on any bond the interest on which is subject to tax under 51
this chapter but exempt from federal income tax, to the extent that 52
such expenses and premiums are not deductible in determining federal 53
adjusted gross income and are attributable to a trade or business 54
carried on by such individual; 55
(x) (I) For taxable years commencing prior to January 1, 2019, for a 56
person who files a return under the federal income tax as an 57
unmarried individual whose federal adjusted gross income for such 58
taxable year is less than fifty thousand dollars, or as a married 59
individual filing separately whose federal adjusted gross income for 60
such taxable year is less than fifty thousand dollars, or for [a husband 61
and wife] persons who file a return under the federal income tax as 62
married individuals filing jointly whose federal adjusted gross income 63
for such taxable year is less than sixty thousand dollars or a person 64
who files a return under the federal income tax as a head of household 65
whose federal adjusted gross income for such taxable year is less than 66
sixty thousand dollars, an amount equal to the Social Security benefits 67
includable for federal income tax purposes; 68
(II) For taxable years commencing prior to January 1, 2019, for a 69
person who files a return under the federal income tax as an 70
unmarried individual whose federal adjusted gross income for such 71
taxable year is fifty thousand dollars or more, or as a married 72
individual filing separately whose federal adjusted gross income for 73
such taxable year is fifty thousand dollars or more, or for [a husband 74
and wife] persons who file a return under the federal income tax as 75
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married individuals filing jointly whose federal adjusted gross income 76
from such taxable year is sixty thousand dollars or more or for a 77
person who files a return under the federal income tax as a head of 78
household whose federal adjusted gross income for such taxable year 79
is sixty thousand dollars or more, an amount equal to the difference 80
between the amount of Social Security benefits includable for federal 81
income tax purposes and the lesser of twenty-five per cent of the Social 82
Security benefits received during the taxable year, or twenty-five per 83
cent of the excess described in Section 86(b)(1) of the Internal Revenue 84
Code; 85
(III) For the taxable year commencing January 1, 2019, and each 86
taxable year thereafter, for a person who files a return under the 87
federal income tax as an unmarried individual whose federal adjusted 88
gross income for such taxable year is less than seventy-five thousand 89
dollars, or as a married individual filing separately whose federal 90
adjusted gross income for such taxable year is less than seventy-five 91
thousand dollars, or for [a husband and wife] persons who file a return 92
under the federal income tax as married individuals filing jointly 93
whose federal adjusted gross income for such taxable year is less than 94
one hundred thousand dollars or a person who files a return under the 95
federal income tax as a head of household whose federal adjusted 96
gross income for such taxable year is less than one hundred thousand 97
dollars, an amount equal to the Social Security benefits includable for 98
federal income tax purposes; and 99
(IV) For the taxable year commencing January 1, 2019, and each 100
taxable year thereafter, for a person who files a return under the 101
federal income tax as an unmarried individual whose federal adjusted 102
gross income for such taxable year is seventy-five thousand dollars or 103
more, or as a married individual filing separately whose federal 104
adjusted gross income for such taxable year is seventy-five thousand 105
dollars or more, or for [a husband and wife] persons who file a return 106
under the federal income tax as married individuals filing jointly 107
whose federal adjusted gross income from such taxable year is one 108
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hundred thousand dollars or more or for a person who files a return 109
under the federal income tax as a head of household whose federal 110
adjusted gross income for such taxable year is one hundred thousand 111
dollars or more, an amount equal to the difference between the 112
amount of Social Security benefits includable for federal income tax 113
purposes and the lesser of twenty-five per cent of the Social Security 114
benefits received during the taxable year, or twenty-five per cent of the 115
excess described in Section 86(b)(1) of the Internal Revenue Code; 116
(xi) To the extent properly includable in gross income for federal 117
income tax purposes, any amount rebated to a taxpayer pursuant to 118
section 12-746; 119
(xii) To the extent properly includable in the gross income for 120
federal income tax purposes of a designated beneficiary, any 121
distribution to such beneficiary from any qualified state tuition 122
program, as defined in Section 529(b) of the Internal Revenue Code, 123
established and maintained by this state or any official, agency or 124
instrumentality of the state; 125
(xiii) To the extent allowable under section 12-701a, contributions to 126
accounts established pursuant to any qualified state tuition program, 127
as defined in Section 529(b) of the Internal Revenue Code, established 128
and maintained by this state or any official, agency or instrumentality 129
of the state; 130
(xiv) To the extent properly includable in gross income for federal 131
income tax purposes, the amount of any Holocaust victims' settlement 132
payment received in the taxable year by a Holocaust victim; 133
(xv) To the extent properly includable in gross income for federal 134
income tax purposes of an account holder, as defined in section 31-135
51ww, interest earned on funds deposited in the individual 136
development account, as defined in section 31-51ww, of such account 137
holder; 138
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(xvi) To the extent properly includable in the gross income for 139
federal income tax purposes of a designated beneficiary, as defined in 140
section 3-123aa, interest, dividends or capital gains earned on 141
contributions to accounts established for the designated beneficiary 142
pursuant to the Connecticut Homecare Option Program for the Elderly 143
established by sections 3-123aa to 3-123ff, inclusive; 144
(xvii) To the extent properly includable in gross income for federal 145
income tax purposes, any income received from the United States 146
government as retirement pay for a retired member of (I) the Armed 147
Forces of the United States, as defined in Section 101 of Title 10 of the 148
United States Code, or (II) the National Guard, as defined in Section 149
101 of Title 10 of the United States Code; 150
(xviii) To the extent properly includable in gross income for federal 151
income tax purposes for the taxable year, any income from the 152
discharge of indebtedness in connection with any reacquisition, after 153
December 31, 2008, and before January 1, 2011, of an applicable debt 154
instrument or instruments, as those terms are defined in Section 108 of 155
the Internal Revenue Code, as amended by Section 1231 of the 156
American Recovery and Reinvestment Act of 2009, to the extent any 157
such income was added to federal adjusted gross income pursuant to 158
subparagraph (A)(xi) of this subdivision in computing Connecticut 159
adjusted gross income for a preceding taxable year; 160
(xix) To the extent not deductible in determining federal adjusted 161
gross income, the amount of any contribution to a manufacturing 162
reinvestment account established pursuant to section 32-9zz in the 163
taxable year that such contribution is made; 164
(xx) To the extent properly includable in gross income for federal 165
income tax purposes, (I) for the taxable year commencing January 1, 166
2015, ten per cent of the income received from the state teachers' 167
retirement system, (II) for the taxable years commencing January 1, 168
2016, January 1, 2017, and January 1, 2018, twenty-five per cent of the 169
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income received from the state teachers' retirement system, and (III) 170
for the taxable year commencing January 1, 2019, and each taxable year 171
thereafter, fifty per cent of the income received from the state teachers' 172
retirement system or the percentage, if applicable, pursuant to clause 173
(xxi) of this subparagraph; 174
(xxi) To the extent properly includable in gross income for federal 175
income tax purposes, except for retirement benefits under clause (iv) of 176
this subparagraph and retirement pay under clause (xvii) of this 177
subparagraph, for a person who files a return under the federal income 178
tax as an unmarried individual whose federal adjusted gross income 179
for such taxable year is less than seventy-five thousand dollars, or as a 180
married individual filing separately whose federal adjusted gross 181
income for such taxable year is less than seventy-five thousand dollars, 182
or as a head of household whose federal adjusted gross income for 183
such taxable year is less than seventy-five thousand dollars, or for [a 184
husband and wife] persons who file a return under the federal income 185
tax as married individuals filing jointly whose federal adjusted gross 186
income for such taxable year is less than one hundred thousand 187
dollars, (I) for the taxable year commencing January 1, 2019, fourteen 188
per cent of any pension or annuity income, (II) for the taxable year 189
commencing January 1, 2020, twenty-eight per cent of any pension or 190
annuity income, (III) for the taxable year commencing January 1, 2021, 191
forty-two per cent of any pension or annuity income, (IV) for the 192
taxable year commencing January 1, 2022, fifty-six per cent of any 193
pension or annuity income, (V) for the taxable year commencing 194
January 1, 2023, seventy per cent of any pension or annuity income, 195
(VI) for the taxable year commencing January 1, 2024, eighty-four per 196
cent of any pension or annuity income, and (VII) for the taxable year 197
commencing January 1, 2025, and each taxable year thereafter, any 198
pension or annuity income; 199
(xxii) The amount of lost wages and medical, travel and housing 200
expenses, not to exceed ten thousand dollars in the aggregate, incurred 201
by a taxpayer during the taxable year in connection with the donation 202
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to another person of an organ for organ transplantation occurring on 203
or after January 1, 2017; 204
(xxiii) To the extent properly includable in gross income for federal 205
income tax purposes, the amount of any financial assistance received 206
from the Crumbling Foundations Assistance Fund or paid to or on 207
behalf of the owner of a residential building pursuant to sections 8-442 208
and 8-443; [, and] 209
(xxiv) To the extent properly includable in gross income for federal 210
income tax purposes, the amount calculated pursuant to subsection (b) 211
of section 12-704g for income received by a general partner of a 212
venture capital fund, as defined in 17 CFR 275.203(l)-1, as amended 213
from time to time; [and] 214
(xxv) To the extent any portion of a deduction under Section 179 of 215
the Internal Revenue Code was added to federal adjusted gross income 216
pursuant to subparagraph (A)(xiv) of this subdivision in computing 217
Connecticut adjusted gross income, twenty-five per cent of such 218
disallowed portion of the deduction in each of the four succeeding 219
taxable years; and 220
(xxvi) For the taxable year commencing January 1, 2019, the amount 221
of premiums actually paid by a taxpayer in a taxable year, not to 222
exceed five thousand dollars, for an individual health insurance policy 223
providing coverage of the type specified in subdivisions (1), (2), (4), 224
(11) and (12) of section 38a-469 in this state, including a qualified 225
health plan, as defined in section 38a-1080, purchased through the 226
Connecticut Health Insurance Exchange established under section 38a-227
1081. In the case of any persons who file a return under the federal 228
income tax for a taxable year as married individuals filing a joint 229
return, the deduction allowed, in the aggregate, shall not exceed such 230
amount for a taxable year. 231
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This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2019, and
applicable to taxable years
commencing on or after
January 1, 2019
12-701(a)(20)(B)
Statement of Purpose:
To establish a personal income tax deduction for premiums paid for
individual health insurance policies.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline,
except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is
not underlined.]