Connecticut Senate Bill SB00873

Connecticut 2021 Regular Session

• Introduced: 2/10/21
• Refer: 2/10/21

Caption

An Act Mitigating Adverse Tax Consequences Resulting From Employees Working Remotely During Covid-19, And Concerning The Removal Of Liens On The Property Of Public Assistance Beneficiaries And A Three-tiered Grants In Lieu Of Taxes Program.

Impact

This legislation is set to change how state law interacts with taxation related to remote work, particularly in the context of the COVID-19 pandemic. It specifically addresses issues related to the collection of tax from employees who were not working in their home state, which could lead to improved financial situations for many individuals who may have faced dual taxation claims from different jurisdictions. Furthermore, by clarifying tax obligations in this unforeseen context, the bill aims to foster a more favorable environment for businesses that are adapting to new working models.

Summary

SB00873 is designed to mitigate the adverse tax consequences stemming from employees working remotely due to COVID-19. The bill includes provisions for allowing residents who paid income tax to other states—while they were required to work remotely due to the pandemic—to claim a credit against their Connecticut income tax. Additionally, it provides clarity regarding state tax nexus concerning employers of remote workers. By doing so, the bill seeks to alleviate the financial liability for individuals and companies that faced unexpected tax burdens as a result of statewide lockdowns and remote work requirements.

Contention

Notably, the bill also touches on provisions that eliminate the state's ability to recover assistance payments from beneficiaries' estates if the value of the estate is below a certain threshold of $250,000. This aspect has raised concerns among some legislators who argue that the state should retain the right to seek reimbursement for public assistance provided, particularly for larger estates. However, proponents argue this will provide necessary relief to low-income families, preventing them from losing their homes upon inheriting a modest estate.