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General Assembly Raised Bill No. 5371
February Session, 2022
LCO No. 2628
Referred to Committee on VETERANS' AFFAIRS
Introduced by:
(VA)
AN ACT ESTABLISHING A PERSONAL INCOME TAX DEDUCTION
FOR HONOR GUARD DETAIL COMPENSATION.
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section 12-701 of the 2022 supplement to the general statutes is repealed 2
and the following is substituted in lieu thereof (Effective July 1, 2022): 3
(B) There shall be subtracted therefrom: 4
(i) To the extent properly includable in gross income for federal 5
income tax purposes, any income with respect to which taxation by any 6
state is prohibited by federal law; 7
(ii) To the extent allowable under section 12-718, exempt dividends 8
paid by a regulated investment company; 9
(iii) To the extent properly includable in gross income for federal 10
income tax purposes, the amount of any refund or credit for 11
overpayment of income taxes imposed by this state, or any other state 12
of the United States or a political subdivision thereof, or the District of 13
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Columbia; 14
(iv) To the extent properly includable in gross income for federal 15
income tax purposes and not otherwise subtracted from federal 16
adjusted gross income pursuant to clause (x) of this subparagraph in 17
computing Connecticut adjusted gross income, any tier 1 railroad 18
retirement benefits; 19
(v) To the extent any additional allowance for depreciation under 20
Section 168(k) of the Internal Revenue Code for property placed in 21
service after September 27, 2017, was added to federal adjusted gross 22
income pursuant to subparagraph (A)(ix) of this subdivision in 23
computing Connecticut adjusted gross income, twenty-five per cent of 24
such additional allowance for depreciation in each of the four 25
succeeding taxable years; 26
(vi) To the extent properly includable in gross income for federal 27
income tax purposes, any interest income from obligations issued by or 28
on behalf of the state of Connecticut, any political subdivision thereof, 29
or public instrumentality, state or local authority, district or similar 30
public entity created under the laws of the state of Connecticut; 31
(vii) To the extent properly includable in determining the net gain or 32
loss from the sale or other disposition of capital assets for federal income 33
tax purposes, any gain from the sale or exchange of obligations issued 34
by or on behalf of the state of Connecticut, any political subdivision 35
thereof, or public instrumentality, state or local authority, district or 36
similar public entity created under the laws of the state of Connecticut, 37
in the income year such gain was recognized; 38
(viii) Any interest on indebtedness incurred or continued to purchase 39
or carry obligations or securities the interest on which is subject to tax 40
under this chapter but exempt from federal income tax, to the extent that 41
such interest on indebtedness is not deductible in determining federal 42
adjusted gross income and is attributable to a trade or business carried 43
on by such individual; 44
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(ix) Ordinary and necessary expenses paid or incurred during the 45
taxable year for the production or collection of income which is subject 46
to taxation under this chapter but exempt from federal income tax, or 47
the management, conservation or maintenance of property held for the 48
production of such income, and the amortizable bond premium for the 49
taxable year on any bond the interest on which is subject to tax under 50
this chapter but exempt from federal income tax, to the extent that such 51
expenses and premiums are not deductible in determining federal 52
adjusted gross income and are attributable to a trade or business carried 53
on by such individual; 54
(x) (I) For taxable years commencing prior to January 1, 2019, for a 55
person who files a return under the federal income tax as an unmarried 56
individual whose federal adjusted gross income for such taxable year is 57
less than fifty thousand dollars, or as a married individual filing 58
separately whose federal adjusted gross income for such taxable year is 59
less than fifty thousand dollars, or for a husband and wife who file a 60
return under the federal income tax as married individuals filing jointly 61
whose federal adjusted gross income for such taxable year is less than 62
sixty thousand dollars or a person who files a return under the federal 63
income tax as a head of household whose federal adjusted gross income 64
for such taxable year is less than sixty thousand dollars, an amount 65
equal to the Social Security benefits includable for federal income tax 66
purposes; 67
(II) For taxable years commencing prior to January 1, 2019, for a 68
person who files a return under the federal income tax as an unmarried 69
individual whose federal adjusted gross income for such taxable year is 70
fifty thousand dollars or more, or as a married individual filing 71
separately whose federal adjusted gross income for such taxable year is 72
fifty thousand dollars or more, or for a husband and wife who file a 73
return under the federal income tax as married individuals filing jointly 74
whose federal adjusted gross income from such taxable year is sixty 75
thousand dollars or more or for a person who files a return under the 76
federal income tax as a head of household whose federal adjusted gross 77
income for such taxable year is sixty thousand dollars or more, an 78
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amount equal to the difference between the amount of Social Security 79
benefits includable for federal income tax purposes and the lesser of 80
twenty-five per cent of the Social Security benefits received during the 81
taxable year, or twenty-five per cent of the excess described in Section 82
86(b)(1) of the Internal Revenue Code; 83
(III) For the taxable year commencing January 1, 2019, and each 84
taxable year thereafter, for a person who files a return under the federal 85
income tax as an unmarried individual whose federal adjusted gross 86
income for such taxable year is less than seventy-five thousand dollars, 87
or as a married individual filing separately whose federal adjusted gross 88
income for such taxable year is less than seventy-five thousand dollars, 89
or for a husband and wife who file a return under the federal income tax 90
as married individuals filing jointly whose federal adjusted gross 91
income for such taxable year is less than one hundred thousand dollars 92
or a person who files a return under the federal income tax as a head of 93
household whose federal adjusted gross income for such taxable year is 94
less than one hundred thousand dollars, an amount equal to the Social 95
Security benefits includable for federal income tax purposes; and 96
(IV) For the taxable year commencing January 1, 2019, and each 97
taxable year thereafter, for a person who files a return under the federal 98
income tax as an unmarried individual whose federal adjusted gross 99
income for such taxable year is seventy-five thousand dollars or more, 100
or as a married individual filing separately whose federal adjusted gross 101
income for such taxable year is seventy-five thousand dollars or more, 102
or for a husband and wife who file a return under the federal income tax 103
as married individuals filing jointly whose federal adjusted gross 104
income from such taxable year is one hundred thousand dollars or more 105
or for a person who files a return under the federal income tax as a head 106
of household whose federal adjusted gross income for such taxable year 107
is one hundred thousand dollars or more, an amount equal to the 108
difference between the amount of Social Security benefits includable for 109
federal income tax purposes and the lesser of twenty-five per cent of the 110
Social Security benefits received during the taxable year, or twenty-five 111
per cent of the excess described in Section 86(b)(1) of the Internal 112
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Revenue Code; 113
(xi) To the extent properly includable in gross income for federal 114
income tax purposes, any amount rebated to a taxpayer pursuant to 115
section 12-746; 116
(xii) To the extent properly includable in the gross income for federal 117
income tax purposes of a designated beneficiary, any distribution to 118
such beneficiary from any qualified state tuition program, as defined in 119
Section 529(b) of the Internal Revenue Code, established and 120
maintained by this state or any official, agency or instrumentality of the 121
state; 122
(xiii) To the extent allowable under section 12-701a, contributions to 123
accounts established pursuant to any qualified state tuition program, as 124
defined in Section 529(b) of the Internal Revenue Code, established and 125
maintained by this state or any official, agency or instrumentality of the 126
state; 127
(xiv) To the extent properly includable in gross income for federal 128
income tax purposes, the amount of any Holocaust victims' settlement 129
payment received in the taxable year by a Holocaust victim; 130
(xv) To the extent properly includable in gross income for federal 131
income tax purposes of an account holder, as defined in section 31-132
51ww, interest earned on funds deposited in the individual 133
development account, as defined in section 31-51ww, of such account 134
holder; 135
(xvi) To the extent properly includable in the gross income for federal 136
income tax purposes of a designated beneficiary, as defined in section 137
3-123aa, interest, dividends or capital gains earned on contributions to 138
accounts established for the designated beneficiary pursuant to the 139
Connecticut Homecare Option Program for the Elderly established by 140
sections 3-123aa to 3-123ff, inclusive; 141
(xvii) To the extent properly includable in gross income for federal 142
income tax purposes, any income received from the United States 143
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government as retirement pay for a retired member of (I) the Armed 144
Forces of the United States, as defined in Section 101 of Title 10 of the 145
United States Code, or (II) the National Guard, as defined in Section 101 146
of Title 10 of the United States Code; 147
(xviii) To the extent properly includable in gross income for federal 148
income tax purposes for the taxable year, any income from the discharge 149
of indebtedness in connection with any reacquisition, after December 150
31, 2008, and before January 1, 2011, of an applicable debt instrument or 151
instruments, as those terms are defined in Section 108 of the Internal 152
Revenue Code, as amended by Section 1231 of the American Recovery 153
and Reinvestment Act of 2009, to the extent any such income was added 154
to federal adjusted gross income pursuant to subparagraph (A)(xi) of 155
this subdivision in computing Connecticut adjusted gross income for a 156
preceding taxable year; 157
(xix) To the extent not deductible in determining federal adjusted 158
gross income, the amount of any contribution to a manufacturing 159
reinvestment account established pursuant to section 32-9zz in the 160
taxable year that such contribution is made; 161
(xx) To the extent properly includable in gross income for federal 162
income tax purposes, (I) for the taxable year commencing January 1, 163
2015, ten per cent of the income received from the state teachers' 164
retirement system, (II) for the taxable years commencing January 1, 165
2016, to January 1, 2020, inclusive, twenty-five per cent of the income 166
received from the state teachers' retirement system, and (III) for the 167
taxable year commencing January 1, 2021, and each taxable year 168
thereafter, fifty per cent of the income received from the state teachers' 169
retirement system or, for a taxpayer whose federal adjusted gross 170
income does not exceed the applicable threshold under clause (xxi) of 171
this subparagraph, the percentage pursuant to said clause of the income 172
received from the state teachers' retirement system, whichever 173
deduction is greater; 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
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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 for 179
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 such 183
taxable year is less than seventy-five thousand dollars, or for a husband 184
and wife who file a return under the federal income tax as married 185
individuals filing jointly whose federal adjusted gross income for such 186
taxable year is less than one hundred thousand dollars, (I) for the taxable 187
year commencing January 1, 2019, fourteen per cent of any pension or 188
annuity income, (II) for the taxable year commencing January 1, 2020, 189
twenty-eight per cent of any pension or annuity income, (III) for the 190
taxable year commencing January 1, 2021, forty-two per cent of any 191
pension or annuity income, (IV) for the taxable year commencing 192
January 1, 2022, fifty-six per cent of any pension or annuity income, (V) 193
for the taxable year commencing January 1, 2023, seventy per cent of any 194
pension or annuity income, (VI) for the taxable year commencing 195
January 1, 2024, eighty-four per cent of any pension or annuity income, 196
and (VII) for the taxable year commencing January 1, 2025, and each 197
taxable year thereafter, any pension or annuity income; 198
(xxii) The amount of lost wages and medical, travel and housing 199
expenses, not to exceed ten thousand dollars in the aggregate, incurred 200
by a taxpayer during the taxable year in connection with the donation 201
to another person of an organ for organ transplantation occurring on or 202
after January 1, 2017; 203
(xxiii) To the extent properly includable in gross income for federal 204
income tax purposes, the amount of any financial assistance received 205
from the Crumbling Foundations Assistance Fund or paid to or on 206
behalf of the owner of a residential building pursuant to sections 8-442 207
and 8-443; 208
(xxiv) To the extent properly includable in gross income for federal 209
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income tax purposes, the amount calculated pursuant to subsection (b) 210
of section 12-704g for income received by a general partner of a venture 211
capital fund, as defined in 17 CFR 275.203(l)-1, as amended from time to 212
time; 213
(xxv) To the extent any portion of a deduction under Section 179 of 214
the Internal Revenue Code was added to federal adjusted gross income 215
pursuant to subparagraph (A)(xiv) of this subdivision in computing 216
Connecticut adjusted gross income, twenty-five per cent of such 217
disallowed portion of the deduction in each of the four succeeding 218
taxable years; [and] 219
(xxvi) To the extent properly includable in gross income for federal 220
income tax purposes, for a person who files a return under the federal 221
income tax as an unmarried individual whose federal adjusted gross 222
income for such taxable year is less than seventy-five thousand dollars, 223
or as a married individual filing separately whose federal adjusted gross 224
income for such taxable year is less than seventy-five thousand dollars, 225
or as a head of household whose federal adjusted gross income for such 226
taxable year is less than seventy-five thousand dollars, or for a husband 227
and wife who file a return under the federal income tax as married 228
individuals filing jointly whose federal adjusted gross income for such 229
taxable year is less than one hundred thousand dollars, (I) for the taxable 230
year commencing January 1, 2023, twenty-five per cent of any 231
distribution from an individual retirement account other than a Roth 232
individual retirement account, (II) for the taxable year commencing 233
January 1, 2024, fifty per cent of any distribution from an individual 234
retirement account other than a Roth individual retirement account, (III) 235
for the taxable year commencing January 1, 2025, seventy-five per cent 236
of any distribution from an individual retirement account other than a 237
Roth individual retirement account, and (IV) for the taxable year 238
commencing January 1, 2026, and each taxable year thereafter, any 239
distribution from an individual retirement account other than a Roth 240
individual retirement account; and 241
(xxvii) To the extent properly includable in gross income for federal 242
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income tax purposes, the amount of any compensation received for 243
attending a funeral as a member of an honor guard detail pursuant to 244
section 27-76. 245
This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2022 12-701(a)(20)(B)
Statement of Purpose:
To establish a personal income tax deduction for compensation received
as a result of participation in military honor guard details.
[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.]