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General Assembly Substitute Bill No. 5408
February Session, 2022
AN ACT CONCERNING THE QUALIFYING INCOME THRESHOLDS
FOR CERTAIN PERSONAL INCOME TAX DEDUCTIONS FOR
MARRIED INDIVIDUALS FILING JOINTLY.
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section 12-701 of the 2022 supplement to the general statutes is repealed 2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, and 3
applicable to taxable years commencing on or after January 1, 2022): 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 any 7
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
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 Substitute Bill No. 5408
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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 or 33
loss from the sale or other disposition of capital assets for federal income 34
tax purposes, any gain from the sale or exchange of obligations issued 35
by or on behalf of the state of Connecticut, any political subdivision 36
thereof, or public instrumentality, state or local authority, district or 37
similar public entity created under the laws of the state of Connecticut, 38
in the income year such gain was recognized; 39
(viii) Any interest on indebtedness incurred or continued to purchase 40
or carry obligations or securities the interest on which is subject to tax 41
under this chapter but exempt from federal income tax, to the extent that 42
such interest on indebtedness is not deductible in determining federal 43
adjusted gross income and is attributable to a trade or business carried 44
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 Substitute Bill No. 5408
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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 such 52
expenses and premiums are not deductible in determining federal 53
adjusted gross income and are attributable to a trade or business carried 54
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 unmarried 57
individual whose federal adjusted gross income for such taxable year is 58
less than fifty thousand dollars, or as a married individual filing 59
separately whose federal adjusted gross income for such taxable year is 60
less than fifty thousand dollars, or for a husband and wife who file a 61
return under the federal income tax as married individuals filing jointly 62
whose federal adjusted gross income for such taxable year is less than 63
sixty thousand dollars or a person who files a return under the federal 64
income tax as a head of household whose federal adjusted gross income 65
for such taxable year is less than sixty thousand dollars, an amount 66
equal to the Social Security benefits includable for federal income tax 67
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 unmarried 70
individual whose federal adjusted gross income for such taxable year is 71
fifty thousand dollars or more, or as a married individual filing 72
separately whose federal adjusted gross income for such taxable year is 73
fifty thousand dollars or more, or for a husband and wife who file a 74
return under the federal income tax as married individuals filing jointly 75
whose federal adjusted gross income from such taxable year is sixty 76
thousand dollars or more or for a person who files a return under the 77
federal income tax as a head of household whose federal adjusted gross 78
income for such taxable year is sixty thousand dollars or more, an 79
amount equal to the difference between the amount of Social Security 80 Substitute Bill No. 5408
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benefits includable for federal income tax purposes and the lesser of 81
twenty-five per cent of the Social Security benefits received during the 82
taxable year, or twenty-five per cent of the excess described in Section 83
86(b)(1) of the Internal Revenue Code; 84
(III) For the taxable [year] years commencing January 1, 2019, [and 85
each taxable year thereafter] but prior to January 1, 2022, for a person 86
who files a return under the federal income tax as an unmarried 87
individual whose federal adjusted gross income for such taxable year is 88
less than seventy-five thousand dollars, or as a married individual filing 89
separately whose federal adjusted gross income for such taxable year is 90
less than seventy-five thousand dollars, or for a husband and wife who 91
file a return under the federal income tax as married individuals filing 92
jointly whose federal adjusted gross income for such taxable year is less 93
than one hundred thousand dollars or a person who files a return under 94
the federal income tax as a head of household whose federal adjusted 95
gross income for such taxable year is less than one hundred thousand 96
dollars, an amount equal to the Social Security benefits includable for 97
federal income tax purposes; [and] 98
(IV) For the taxable [year] years commencing January 1, 2019, [and 99
each taxable year thereafter] but prior to January 1, 2022, for a person 100
who files a return under the federal income tax as an unmarried 101
individual whose federal adjusted gross income for such taxable year is 102
seventy-five thousand dollars or more, or as a married individual filing 103
separately whose federal adjusted gross income for such taxable year is 104
seventy-five thousand dollars or more, or for a husband and wife who 105
file a return under the federal income tax as married individuals filing 106
jointly whose federal adjusted gross income from such taxable year is 107
one hundred thousand dollars or more or for a person who files a return 108
under the federal income tax as a head of household whose federal 109
adjusted gross income for such taxable year is one hundred thousand 110
dollars or more, an amount equal to the difference between the amount 111
of Social Security benefits includable for federal income tax purposes 112
and the lesser of twenty-five per cent of the Social Security benefits 113 Substitute Bill No. 5408
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received during the taxable year, or twenty-five per cent of the excess 114
described in Section 86(b)(1) of the Internal Revenue Code; 115
(V) For the taxable year commencing January 1, 2022, and each 116
taxable year thereafter, for a person who files a return under the federal 117
income tax as an unmarried individual whose federal adjusted gross 118
income for such taxable year is less than seventy-five thousand dollars, 119
or as a married individual filing separately whose federal adjusted gross 120
income for such taxable year is less than seventy-five thousand dollars, 121
or for a husband and wife who file a return under the federal income tax 122
as married individuals filing jointly whose federal adjusted gross 123
income for such taxable year is less than one hundred fifty thousand 124
dollars or a person who files a return under the federal income tax as a 125
head of household whose federal adjusted gross income for such taxable 126
year is less than one hundred thousand dollars, an amount equal to the 127
Social Security benefits includable for federal income tax purposes; and 128
(VI) For the taxable year commencing January 1, 2022, and each 129
taxable year thereafter, for a person who files a return under the federal 130
income tax as an unmarried individual whose federal adjusted gross 131
income for such taxable year is seventy-five thousand dollars or more, 132
or as a married individual filing separately whose federal adjusted gross 133
income for such taxable year is seventy-five thousand dollars or more, 134
or for a husband and wife who file a return under the federal income tax 135
as married individuals filing jointly whose federal adjusted gross 136
income from such taxable year is one hundred fifty thousand dollars or 137
more or for a person who files a return under the federal income tax as 138
a head of household whose federal adjusted gross income for such 139
taxable year is one hundred thousand dollars or more, an amount equal 140
to the difference between the amount of Social Security benefits 141
includable for federal income tax purposes and the lesser of twenty-five 142
per cent of the Social Security benefits received during the taxable year, 143
or twenty-five per cent of the excess described in Section 86(b)(1) of the 144
Internal Revenue Code; 145
(xi) To the extent properly includable in gross income for federal 146 Substitute Bill No. 5408
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income tax purposes, any amount rebated to a taxpayer pursuant to 147
section 12-746; 148
(xii) To the extent properly includable in the gross income for federal 149
income tax purposes of a designated beneficiary, any distribution to 150
such beneficiary from any qualified state tuition program, as defined in 151
Section 529(b) of the Internal Revenue Code, established and 152
maintained by this state or any official, agency or instrumentality of the 153
state; 154
(xiii) To the extent allowable under section 12-701a, contributions to 155
accounts established pursuant to any qualified state tuition program, as 156
defined in Section 529(b) of the Internal Revenue Code, established and 157
maintained by this state or any official, agency or instrumentality of the 158
state; 159
(xiv) To the extent properly includable in gross income for federal 160
income tax purposes, the amount of any Holocaust victims' settlement 161
payment received in the taxable year by a Holocaust victim; 162
(xv) To the extent properly includable in gross income for federal 163
income tax purposes of an account holder, as defined in section 31-164
51ww, interest earned on funds deposited in the individual 165
development account, as defined in section 31-51ww, of such account 166
holder; 167
(xvi) To the extent properly includable in the gross income for federal 168
income tax purposes of a designated beneficiary, as defined in section 169
3-123aa, interest, dividends or capital gains earned on contributions to 170
accounts established for the designated beneficiary pursuant to the 171
Connecticut Homecare Option Program for the Elderly established by 172
sections 3-123aa to 3-123ff, inclusive; 173
(xvii) To the extent properly includable in gross income for federal 174
income tax purposes, any income received from the United States 175
government as retirement pay for a retired member of (I) the Armed 176
Forces of the United States, as defined in Section 101 of Title 10 of the 177 Substitute Bill No. 5408
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United States Code, or (II) the National Guard, as defined in Section 101 178
of Title 10 of the United States Code; 179
(xviii) To the extent properly includable in gross income for federal 180
income tax purposes for the taxable year, any income from the discharge 181
of indebtedness in connection with any reacquisition, after December 182
31, 2008, and before January 1, 2011, of an applicable debt instrument or 183
instruments, as those terms are defined in Section 108 of the Internal 184
Revenue Code, as amended by Section 1231 of the American Recovery 185
and Reinvestment Act of 2009, to the extent any such income was added 186
to federal adjusted gross income pursuant to subparagraph (A)(xi) of 187
this subdivision in computing Connecticut adjusted gross income for a 188
preceding taxable year; 189
(xix) To the extent not deductible in determining federal adjusted 190
gross income, the amount of any contribution to a manufacturing 191
reinvestment account established pursuant to section 32-9zz in the 192
taxable year that such contribution is made; 193
(xx) To the extent properly includable in gross income for federal 194
income tax purposes, (I) for the taxable year commencing January 1, 195
2015, ten per cent of the income received from the state teachers' 196
retirement system, (II) for the taxable years commencing January 1, 197
2016, to January 1, 2020, inclusive, twenty-five per cent of the income 198
received from the state teachers' retirement system, and (III) for the 199
taxable year commencing January 1, 2021, and each taxable year 200
thereafter, fifty per cent of the income received from the state teachers' 201
retirement system or, for a taxpayer whose federal adjusted gross 202
income does not exceed the applicable threshold under clause (xxi) of 203
this subparagraph, the percentage pursuant to said clause of the income 204
received from the state teachers' retirement system, whichever 205
deduction is greater; 206
(xxi) To the extent properly includable in gross income for federal 207
income tax purposes, except for retirement benefits under clause (iv) of 208
this subparagraph and retirement pay under clause (xvii) of this 209 Substitute Bill No. 5408
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subparagraph, for a person who files a return under the federal income 210
tax as an unmarried individual whose federal adjusted gross income for 211
such taxable year is less than seventy-five thousand dollars, or as a 212
married individual filing separately whose federal adjusted gross 213
income for such taxable year is less than seventy-five thousand dollars, 214
or as a head of household whose federal adjusted gross income for such 215
taxable year is less than seventy-five thousand dollars, or for a husband 216
and wife who file a return under the federal income tax as married 217
individuals filing jointly whose federal adjusted gross income for [such] 218
taxable [year] years commencing prior to January 1, 2022, is less than 219
one hundred thousand dollars and for taxable years commencing on or 220
after January 1, 2022, is less than one hundred fifty thousand dollars, (I) 221
for the taxable year commencing January 1, 2019, fourteen per cent of 222
any pension or annuity income, (II) for the taxable year commencing 223
January 1, 2020, twenty-eight per cent of any pension or annuity income, 224
(III) for the taxable year commencing January 1, 2021, forty-two per cent 225
of any pension or annuity income, (IV) for the taxable year commencing 226
January 1, 2022, fifty-six per cent of any pension or annuity income, (V) 227
for the taxable year commencing January 1, 2023, seventy per cent of any 228
pension or annuity income, (VI) for the taxable year commencing 229
January 1, 2024, eighty-four per cent of any pension or annuity income, 230
and (VII) for the taxable year commencing January 1, 2025, and each 231
taxable year thereafter, any pension or annuity income; 232
(xxii) The amount of lost wages and medical, travel and housing 233
expenses, not to exceed ten thousand dollars in the aggregate, incurred 234
by a taxpayer during the taxable year in connection with the donation 235
to another person of an organ for organ transplantation occurring on or 236
after January 1, 2017; 237
(xxiii) To the extent properly includable in gross income for federal 238
income tax purposes, the amount of any financial assistance received 239
from the Crumbling Foundations Assistance Fund or paid to or on 240
behalf of the owner of a residential building pursuant to sections 8-442 241
and 8-443; 242 Substitute Bill No. 5408
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(xxiv) To the extent properly includable in gross income for federal 243
income tax purposes, the amount calculated pursuant to subsection (b) 244
of section 12-704g for income received by a general partner of a venture 245
capital fund, as defined in 17 CFR 275.203(l)-1, as amended from time to 246
time; 247
(xxv) To the extent any portion of a deduction under Section 179 of 248
the Internal Revenue Code was added to federal adjusted gross income 249
pursuant to subparagraph (A)(xiv) of this subdivision in computing 250
Connecticut adjusted gross income, twenty-five per cent of such 251
disallowed portion of the deduction in each of the four succeeding 252
taxable years; and 253
(xxvi) To the extent properly includable in gross income for federal 254
income tax purposes, for a person who files a return under the federal 255
income tax as an unmarried individual whose federal adjusted gross 256
income for such taxable year is less than seventy-five thousand dollars, 257
or as a married individual filing separately whose federal adjusted gross 258
income for such taxable year is less than seventy-five thousand dollars, 259
or as a head of household whose federal adjusted gross income for such 260
taxable year is less than seventy-five thousand dollars, or for a husband 261
and wife who file a return under the federal income tax as married 262
individuals filing jointly whose federal adjusted gross income for such 263
taxable year is less than one hundred fifty thousand dollars, (I) for the 264
taxable year commencing January 1, 2023, twenty-five per cent of any 265
distribution from an individual retirement account other than a Roth 266
individual retirement account, (II) for the taxable year commencing 267
January 1, 2024, fifty per cent of any distribution from an individual 268
retirement account other than a Roth individual retirement account, (III) 269
for the taxable year commencing January 1, 2025, seventy-five per cent 270
of any distribution from an individual retirement account other than a 271
Roth individual retirement account, and (IV) for the taxable year 272
commencing January 1, 2026, and each taxable year thereafter, any 273
distribution from an individual retirement account other than a Roth 274
individual retirement account. 275 Substitute Bill No. 5408
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This act shall take effect as follows and shall amend the following
sections:
Section 1 July 1, 2022, and
applicable to taxable years
commencing on or after
January 1, 2022
12-701(a)(20)(B)
Statement of Legislative Commissioners:
In Subpara. (B)(x)(III) and (IV), "year" was changed to "[year] years" for
accuracy.
FIN Joint Favorable Subst. -LCO