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General Assembly Raised Bill No. 1401
January Session, 2025
LCO No. 5519
Referred to Committee on BANKING
Introduced by:
(BA)
AN ACT ESTABLISHING DISASTER SAVINGS ACCOUNTS AND A
RELATED TAX DEDUCTION AND CREDIT.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. (NEW) (Effective from passage) (a) For the purposes of this 1
section: 2
(1) "Account holder" means an individual who, either individually or 3
jointly with another individual, establishes a disaster savings account; 4
(2) "Commissioner" means the Commissioner of Revenue Services; 5
(3) "Disaster savings account" means an account established by one 6
or more account holders with a financial institution that the account 7
holders designate as an account exclusively containing funds to pay or 8
reimburse eligible costs incurred by the qualified beneficiary of the 9
account; 10
(4) "Eligible costs" means payment by a qualified beneficiary (A) of 11
an insurance deductible under a homeowners insurance policy that 12
insures against loss or damage by wildfire, flood, rain, hurricane, 13
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tornado or other severe storm, which was incurred because of a claim 14
made for such loss or damage, and (B) for loss or damage to such 15
qualified beneficiary's single-family residence caused by wildfire, flood, 16
rain, hurricane, tornado or other severe storm; 17
(5) "Financial institution" means a bank, out-of-state bank, 18
Connecticut credit union, federal credit union or out-of-state credit 19
union, as those terms are defined in section 36a-2 of the general statutes, 20
and any affiliate or third-party provider of such entities; 21
(6) "Qualified beneficiary" means a homeowner who (A) is 22
designated as the qualified beneficiary of a disaster savings account, and 23
(B) resides in a single-family residence in this state that is owned by the 24
homeowner; and 25
(7) "Single-family residence" means a single-family residential 26
dwelling, including, but not limited to, a mobile manufactured home or 27
a residential unit in a cooperative, common interest community or 28
condominium. 29
(b) For purposes of implementing the deduction allowed under 30
subparagraph (B) of subdivision (20) of subsection (a) of section 12-701 31
of the general statutes, as amended by this act, and the credit allowed 32
under section 3 of this act, the commissioner shall prepare forms for (1) 33
the designation of accounts as disaster savings accounts, (2) the 34
designation of qualified beneficiaries, and (3) account holders to submit 35
to the commissioner the information described in subparagraph (B) of 36
subdivision (1) of subsection (d) of this section and any additional 37
information that the commissioner reasonably requires pursuant to the 38
provisions of this section. 39
(c) An individual may establish one or more disaster savings 40
accounts with a financial institution. Two individuals may jointly 41
establish and serve as the account holders of a disaster savings account, 42
provided such account holders shall file a joint return for the tax 43
imposed under chapter 229 of the general statutes for each taxable year 44
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during which such account exists. The account holder or account 45
holders shall, not later than April fifteenth of the taxable year 46
immediately following the taxable year during which such account 47
holder or account holders established a disaster savings account, 48
designate the qualified beneficiary of such account. The account holder 49
or account holders of a disaster savings account may designate a new 50
qualified beneficiary of the account at any time, provided there shall not 51
be more than one qualified beneficiary of such account at any time. No 52
individual may establish or serve as an account holder of multiple 53
disaster savings accounts that have the same qualified beneficiary. 54
Disaster savings accounts shall exclusively contain cash and there shall 55
be no limit on the amount of contributions made to, or contained in, such 56
accounts. Any person may contribute to a disaster savings account, 57
including, but not limited to, employers of the qualified beneficiary, 58
account holder or account holders of such account. If a qualified 59
beneficiary or account holder of a disaster savings account leaves 60
employment with an employer that contributed to such account while 61
such qualified beneficiary or account holder was employed by such 62
employer, such employer shall not seek reimbursement of any 63
contribution to such account. The account holder or account holders 64
may invest funds deposited in a disaster savings account in money 65
market funds. 66
(d) (1) Each account holder shall: 67
(A) Not use any portion of the funds deposited in a disaster savings 68
account to pay any administrative fees or expenses, other than service 69
fees imposed by the depository financial institution, for such account; 70
and 71
(B) Submit to the commissioner such account holder's tax return for 72
each taxable year beginning on or after January 1, 2025, during which a 73
disaster savings account established by such account holder exists, 74
along with: 75
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(i) Any information required by the commissioner concerning such 76
disaster savings account for purposes of implementing the deduction 77
allowed under subparagraph (B) of subdivision (20) of subsection (a) of 78
section 12-701 of the general statutes, as amended by this act, and the 79
credit allowed under section 3 of this act; 80
(ii) The Internal Revenue Service Form 1099 issued by the depository 81
financial institution for such disaster savings account; and 82
(iii) If such account holder withdrew funds from such disaster 83
savings account during the taxable year that is the subject of such return, 84
a detailed accounting of all eligible costs and ineligible costs paid or 85
reimbursed using such funds during such taxable year and the balance 86
of funds remaining in such account. 87
(2) Each account holder may withdraw all, or any portion of, the 88
funds contributed to and deposited in a disaster savings account and 89
deposit such funds in another disaster savings account established by 90
such account holder at any financial institution. 91
(e) (1) The commissioner may require that financial institutions 92
furnish certain information about each disaster savings account. 93
(2) No financial institution shall be required to (A) designate an 94
account as a disaster savings account, (B) track the use of any funds 95
withdrawn from a disaster savings account, or (C) allocate funds in a 96
disaster savings account among account holders. 97
(3) No financial institution shall be liable or responsible for (A) 98
determining whether, or ensuring that, an account satisfies the 99
requirements established in this section concerning disaster savings 100
accounts or the funds in disaster savings accounts are used to pay or 101
reimburse eligible costs, or (B) disclosing or remitting taxes or penalties 102
concerning disaster savings accounts unless such disclosure or 103
remittance is required by applicable law. 104
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(4) Upon receiving proof of the death of an account holder and all 105
other information required by any contract governing a disaster savings 106
account established by the account holder, the depository financial 107
institution shall distribute the funds in the disaster savings account in 108
accordance with the terms of such contract. 109
(f) (1) Except as provided in subdivision (2) of this subsection, each 110
account holder who withdraws funds from a disaster savings account 111
for any reason other than paying or reimbursing the qualified 112
beneficiary of such account for eligible costs incurred by such qualified 113
beneficiary shall be liable to this state for a civil penalty in an amount 114
equal to ten per cent of the withdrawn amount. Such civil penalty shall 115
be collectible by the commissioner. If such funds were deducted by an 116
account holder in accordance with subparagraph (B) of subdivision (20) 117
of subsection (a) of section 12-701 of the general statutes, as amended by 118
this act, then such withdrawn funds shall be considered income. 119
(2) No account holder shall be liable for a penalty under subdivision 120
(1) of this subsection, nor shall funds withdrawn from a disaster savings 121
account be considered income, if the funds withdrawn from the disaster 122
savings account: 123
(A) Are deposited in another disaster savings account pursuant to 124
subdivision (2) of subsection (d) of this section; 125
(B) Are withdrawn due to the death or disability of an account holder 126
who established such account; 127
(C) Constitute a disbursement of the assets of such account pursuant 128
to a filing for protection under the United States Bankruptcy Code, as 129
amended from time to time; or 130
(D) Are not claimed as a deduction pursuant to subparagraph (B) of 131
subdivision (20) of subsection (a) of section 12-701 of the general 132
statutes, as amended by this act, by the account holder on a return for 133
the tax imposed under chapter 229 of the general statutes. 134
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(g) The commissioner may adopt regulations, in accordance with the 135
provisions of chapter 54 of the general statutes, to implement the 136
provisions of this section. 137
Sec. 2. Subparagraph (B) of subdivision (20) of subsection (a) of 138
section 12-701 of the general statutes is repealed and the following is 139
substituted in lieu thereof (Effective from passage and applicable to taxable 140
years commencing on or after January 1, 2025): 141
(B) There shall be subtracted therefrom: 142
(i) To the extent properly includable in gross income for federal 143
income tax purposes, any income with respect to which taxation by any 144
state is prohibited by federal law; 145
(ii) To the extent allowable under section 12-718, exempt dividends 146
paid by a regulated investment company; 147
(iii) To the extent properly includable in gross income for federal 148
income tax purposes, the amount of any refund or credit for 149
overpayment of income taxes imposed by this state, or any other state 150
of the United States or a political subdivision thereof, or the District of 151
Columbia; 152
(iv) To the extent properly includable in gross income for federal 153
income tax purposes and not otherwise subtracted from federal 154
adjusted gross income pursuant to clause (x) of this subparagraph in 155
computing Connecticut adjusted gross income, any tier 1 railroad 156
retirement benefits; 157
(v) To the extent any additional allowance for depreciation under 158
Section 168(k) of the Internal Revenue Code for property placed in 159
service after September 27, 2017, was added to federal adjusted gross 160
income pursuant to subparagraph (A)(ix) of this subdivision in 161
computing Connecticut adjusted gross income, twenty-five per cent of 162
such additional allowance for depreciation in each of the four 163
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succeeding taxable years; 164
(vi) To the extent properly includable in gross income for federal 165
income tax purposes, any interest income from obligations issued by or 166
on behalf of the state of Connecticut, any political subdivision thereof, 167
or public instrumentality, state or local authority, district or similar 168
public entity created under the laws of the state of Connecticut; 169
(vii) To the extent properly includable in determining the net gain or 170
loss from the sale or other disposition of capital assets for federal income 171
tax purposes, any gain from the sale or exchange of obligations issued 172
by or on behalf of the state of Connecticut, any political subdivision 173
thereof, or public instrumentality, state or local authority, district or 174
similar public entity created under the laws of the state of Connecticut, 175
in the income year such gain was recognized; 176
(viii) Any interest on indebtedness incurred or continued to purchase 177
or carry obligations or securities the interest on which is subject to tax 178
under this chapter but exempt from federal income tax, to the extent that 179
such interest on indebtedness is not deductible in determining federal 180
adjusted gross income and is attributable to a trade or business carried 181
on by such individual; 182
(ix) Ordinary and necessary expenses paid or incurred during the 183
taxable year for the production or collection of income which is subject 184
to taxation under this chapter but exempt from federal income tax, or 185
the management, conservation or maintenance of property held for the 186
production of such income, and the amortizable bond premium for the 187
taxable year on any bond the interest on which is subject to tax under 188
this chapter but exempt from federal income tax, to the extent that such 189
expenses and premiums are not deductible in determining federal 190
adjusted gross income and are attributable to a trade or business carried 191
on by such individual; 192
(x) (I) For taxable years commencing prior to January 1, 2019, for a 193
person who files a return under the federal income tax as an unmarried 194
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individual whose federal adjusted gross income for such taxable year is 195
less than fifty thousand dollars, or as a married individual filing 196
separately whose federal adjusted gross income for such taxable year is 197
less than fifty thousand dollars, or for a husband and wife who file a 198
return under the federal income tax as married individuals filing jointly 199
whose federal adjusted gross income for such taxable year is less than 200
sixty thousand dollars or a person who files a return under the federal 201
income tax as a head of household whose federal adjusted gross income 202
for such taxable year is less than sixty thousand dollars, an amount 203
equal to the Social Security benefits includable for federal income tax 204
purposes; 205
(II) For taxable years commencing prior to January 1, 2019, for a 206
person who files a return under the federal income tax as an unmarried 207
individual whose federal adjusted gross income for such taxable year is 208
fifty thousand dollars or more, or as a married individual filing 209
separately whose federal adjusted gross income for such taxable year is 210
fifty thousand dollars or more, or for a husband and wife who file a 211
return under the federal income tax as married individuals filing jointly 212
whose federal adjusted gross income from such taxable year is sixty 213
thousand dollars or more or for a person who files a return under the 214
federal income tax as a head of household whose federal adjusted gross 215
income for such taxable year is sixty thousand dollars or more, an 216
amount equal to the difference between the amount of Social Security 217
benefits includable for federal income tax purposes and the lesser of 218
twenty-five per cent of the Social Security benefits received during the 219
taxable year, or twenty-five per cent of the excess described in Section 220
86(b)(1) of the Internal Revenue Code; 221
(III) For the taxable year commencing January 1, 2019, and each 222
taxable year thereafter, for a person who files a return under the federal 223
income tax as an unmarried individual whose federal adjusted gross 224
income for such taxable year is less than seventy-five thousand dollars, 225
or as a married individual filing separately whose federal adjusted gross 226
income for such taxable year is less than seventy-five thousand dollars, 227
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or for a husband and wife who file a return under the federal income tax 228
as married individuals filing jointly whose federal adjusted gross 229
income for such taxable year is less than one hundred thousand dollars 230
or a person who files a return under the federal income tax as a head of 231
household whose federal adjusted gross income for such taxable year is 232
less than one hundred thousand dollars, an amount equal to the Social 233
Security benefits includable for federal income tax purposes; and 234
(IV) For the taxable year commencing January 1, 2019, and each 235
taxable year thereafter, for a person who files a return under the federal 236
income tax as an unmarried individual whose federal adjusted gross 237
income for such taxable year is seventy-five thousand dollars or more, 238
or as a married individual filing separately whose federal adjusted gross 239
income for such taxable year is seventy-five thousand dollars or more, 240
or for a husband and wife who file a return under the federal income tax 241
as married individuals filing jointly whose federal adjusted gross 242
income from such taxable year is one hundred thousand dollars or more 243
or for a person who files a return under the federal income tax as a head 244
of household whose federal adjusted gross income for such taxable year 245
is one hundred thousand dollars or more, an amount equal to the 246
difference between the amount of Social Security benefits includable for 247
federal income tax purposes and the lesser of twenty-five per cent of the 248
Social Security benefits received during the taxable year, or twenty-five 249
per cent of the excess described in Section 86(b)(1) of the Internal 250
Revenue Code; 251
(xi) To the extent properly includable in gross income for federal 252
income tax purposes, any amount rebated to a taxpayer pursuant to 253
section 12-746; 254
(xii) To the extent properly includable in the gross income for federal 255
income tax purposes of a designated beneficiary, any distribution to 256
such beneficiary from any qualified state tuition program, as defined in 257
Section 529(b) of the Internal Revenue Code, established and 258
maintained by this state or any official, agency or instrumentality of the 259
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state; 260
(xiii) To the extent allowable under section 12-701a, contributions to 261
accounts established pursuant to any qualified state tuition program, as 262
defined in Section 529(b) of the Internal Revenue Code, established and 263
maintained by this state or any official, agency or instrumentality of the 264
state; 265
(xiv) To the extent properly includable in gross income for federal 266
income tax purposes, the amount of any Holocaust victims' settlement 267
payment received in the taxable year by a Holocaust victim; 268
(xv) To the extent properly includable in the gross income for federal 269
income tax purposes of a designated beneficiary, as defined in section 270
3-123aa, interest, dividends or capital gains earned on contributions to 271
accounts established for the designated beneficiary pursuant to the 272
Connecticut Homecare Option Program for the Elderly established by 273
sections 3-123aa to 3-123ff, inclusive; 274
(xvi) To the extent properly includable in gross income for federal 275
income tax purposes, any income received from the United States 276
government as retirement pay for a retired member of (I) the Armed 277
Forces of the United States, as defined in Section 101 of Title 10 of the 278
United States Code, or (II) the National Guard, as defined in Section 101 279
of Title 10 of the United States Code; 280
(xvii) To the extent properly includable in gross income for federal 281
income tax purposes for the taxable year, any income from the discharge 282
of indebtedness in connection with any reacquisition, after December 283
31, 2008, and before January 1, 2011, of an applicable debt instrument or 284
instruments, as those terms are defined in Section 108 of the Internal 285
Revenue Code, as amended by Section 1231 of the American Recovery 286
and Reinvestment Act of 2009, to the extent any such income was added 287
to federal adjusted gross income pursuant to subparagraph (A)(xi) of 288
this subdivision in computing Connecticut adjusted gross income for a 289
preceding taxable year; 290
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(xviii) To the extent not deductible in determining federal adjusted 291
gross income, the amount of any contribution to a manufacturing 292
reinvestment account established pursuant to section 32-9zz in the 293
taxable year that such contribution is made; 294
(xix) To the extent properly includable in gross income for federal 295
income tax purposes, (I) for the taxable year commencing January 1, 296
2015, ten per cent of the income received from the state teachers' 297
retirement system, (II) for the taxable years commencing January 1, 298
2016, to January 1, 2020, inclusive, twenty-five per cent of the income 299
received from the state teachers' retirement system, and (III) for the 300
taxable year commencing January 1, 2021, and each taxable year 301
thereafter, fifty per cent of the income received from the state teachers' 302
retirement system or, for a taxpayer whose federal adjusted gross 303
income does not exceed the applicable threshold under clause (xx) of 304
this subparagraph, the percentage pursuant to said clause of the income 305
received from the state teachers' retirement system, whichever 306
deduction is greater; 307
(xx) To the extent properly includable in gross income for federal 308
income tax purposes, except for retirement benefits under clause (iv) of 309
this subparagraph and retirement pay under clause (xvi) of this 310
subparagraph, for a person who files a return under the federal income 311
tax as an unmarried individual whose federal adjusted gross income for 312
such taxable year is less than seventy-five thousand dollars, or as a 313
married individual filing separately whose federal adjusted gross 314
income for such taxable year is less than seventy-five thousand dollars, 315
or as a head of household whose federal adjusted gross income for such 316
taxable year is less than seventy-five thousand dollars, or for a husband 317
and wife who file a return under the federal income tax as married 318
individuals filing jointly whose federal adjusted gross income for such 319
taxable year is less than one hundred thousand dollars, (I) for the taxable 320
year commencing January 1, 2019, fourteen per cent of any pension or 321
annuity income, (II) for the taxable year commencing January 1, 2020, 322
twenty-eight per cent of any pension or annuity income, (III) for the 323
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taxable year commencing January 1, 2021, forty-two per cent of any 324
pension or annuity income, and (IV) for the taxable years commencing 325
January 1, 2022, and January 1, 2023, one hundred per cent of any 326
pension or annuity income; 327
(xxi) To the extent properly includable in gross income for federal 328
income tax purposes, except for retirement benefits under clause (iv) of 329
this subparagraph and retirement pay under clause (xvi) of this 330
subparagraph, any pension or annuity income for the taxable year 331
commencing on or after January 1, 2024, and each taxable year 332
thereafter, in accordance with the following schedule, for a person who 333
files a return under the federal income tax as an unmarried individual 334
whose federal adjusted gross income for such taxable year is less than 335
one hundred thousand dollars, or as a married individual filing 336
separately whose federal adjusted gross income for such taxable year is 337
less than one hundred thousand dollars, or as a head of household 338
whose federal adjusted gross income for such taxable year is less than 339
one hundred thousand dollars: 340
T1
Federal Adjusted Gross Income Deduction
T2 Less than $75,000 100.0%
T3
$75,000 but not over $77,499 85.0%
T4
$77,500 but not over $79,999 70.0%
T5
$80,000 but not over $82,499 55.0%
T6
$82,500 but not over $84,999 40.0%
T7
$85,000 but not over $87,499 25.0%
T8
$87,500 but not over $89,999 10.0%
T9
$90,000 but not over $94,999 5.0%
T10 $95,000 but not over $99,999 2.5%
T11
$100,000 and over 0.0%
(xxii) To the extent properly includable in gross income for federal 341
income tax purposes, except for retirement benefits under clause (iv) of 342
this subparagraph and retirement pay under clause (xvi) of this 343
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subparagraph, any pension or annuity income for the taxable year 344
commencing on or after January 1, 2024, and each taxable year 345
thereafter, in accordance with the following schedule for married 346
individuals who file a return under the federal income tax as married 347
individuals filing jointly whose federal adjusted gross income for such 348
taxable year is less than one hundred fifty thousand dollars: 349
T12
Federal Adjusted Gross Income Deduction
T13
Less than $100,000 100.0%
T14
$100,000 but not over $104,999 85.0%
T15 $105,000 but not over $109,999 70.0%
T16
$110,000 but not over $114,999 55.0%
T17
$115,000 but not over $119,999 40.0%
T18
$120,000 but not over $124,999 25.0%
T19
$125,000 but not over $129,999 10.0%
T20
$130,000 but not over $139,999 5.0%
T21
$140,000 but not over $149,999 2.5%
T22
$150,000 and over 0.0%
(xxiii) The amount of lost wages and medical, travel and housing 350
expenses, not to exceed ten thousand dollars in the aggregate, incurred 351
by a taxpayer during the taxable year in connection with the donation 352
to another person of an organ for organ transplantation occurring on or 353
after January 1, 2017; 354
(xxiv) To the extent properly includable in gross income for federal 355
income tax purposes, the amount of any financial assistance received 356
from the Crumbling Foundations Assistance Fund or paid to or on 357
behalf of the owner of a residential building pursuant to sections 8-442 358
and 8-443; 359
(xxv) To the extent properly includable in gross income for federal 360
income tax purposes, the amount calculated pursuant to subsection (b) 361
of section 12-704g for income received by a general partner of a venture 362
capital fund, as defined in 17 CFR 275.203(l)-1, as amended from time to 363
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time; 364
(xxvi) To the extent any portion of a deduction under Section 179 of 365
the Internal Revenue Code was added to federal adjusted gross income 366
pursuant to subparagraph (A)(xiv) of this subdivision in computing 367
Connecticut adjusted gross income, twenty-five per cent of such 368
disallowed portion of the deduction in each of the four succeeding 369
taxable years; 370
(xxvii) To the extent properly includable in gross income for federal 371
income tax purposes, for a person who files a return under the federal 372
income tax as an unmarried individual whose federal adjusted gross 373
income for such taxable year is less than seventy-five thousand dollars, 374
or as a married individual filing separately whose federal adjusted gross 375
income for such taxable year is less than seventy-five thousand dollars, 376
or as a head of household whose federal adjusted gross income for such 377
taxable year is less than seventy-five thousand dollars, or for a husband 378
and wife who file a return under the federal income tax as married 379
individuals filing jointly whose federal adjusted gross income for such 380
taxable year is less than one hundred thousand dollars, for the taxable 381
year commencing January 1, 2023, twenty-five per cent of any 382
distribution from an individual retirement account other than a Roth 383
individual retirement account; 384
(xxviii) To the extent properly includable in gross income for federal 385
income tax purposes, for a person who files a return under the federal 386
income tax as an unmarried individual whose federal adjusted gross 387
income for such taxable year is less than one hundred thousand dollars, 388
or as a married individual filing separately whose federal adjusted gross 389
income for such taxable year is less than one hundred thousand dollars, 390
or as a head of household whose federal adjusted gross income for such 391
taxable year is less than one hundred thousand dollars, (I) for the taxable 392
year commencing January 1, 2024, fifty per cent of any distribution from 393
an individual retirement account other than a Roth individual 394
retirement account, (II) for the taxable year commencing January 1, 2025, 395
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seventy-five per cent of any distribution from an individual retirement 396
account other than a Roth individual retirement account, and (III) for 397
the taxable year commencing January 1, 2026, and each taxable year 398
thereafter, any distribution from an individual retirement account other 399
than a Roth individual retirement account. The subtraction under this 400
clause shall be made in accordance with the following schedule: 401
T23
Federal Adjusted Gross Income Deduction
T24
Less than $75,000 100.0%
T25
$75,000 but not over $77,499 85.0%
T26 $77,500 but not over $79,999 70.0%
T27
$80,000 but not over $82,499 55.0%
T28
$82,500 but not over $84,999 40.0%
T29
$85,000 but not over $87,499 25.0%
T30
$87,500 but not over $89,999 10.0%
T31
$90,000 but not over $94,999 5.0%
T32
$95,000 but not over $99,999 2.5%
T33
$100,000 and over 0.0%
(xxix) To the extent properly includable in gross income for federal 402
income tax purposes, for married individuals who file a return under 403
the federal income tax as married individuals filing jointly whose 404
federal adjusted gross income for such taxable year is less than one 405
hundred fifty thousand dollars, (I) for the taxable year commencing 406
January 1, 2024, fifty per cent of any distribution from an individual 407
retirement account other than a Roth individual retirement account, (II) 408
for the taxable year commencing January 1, 2025, seventy-five per cent 409
of any distribution from an individual retirement account other than a 410
Roth individual retirement account, and (III) for the taxable year 411
commencing January 1, 2026, and each taxable year thereafter, any 412
distribution from an individual retirement account other than a Roth 413
individual retirement account. The subtraction under this clause shall 414
be made in accordance with the following schedule: 415
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T34
Federal Adjusted Gross Income Deduction
T35 Less than $100,000 100.0%
T36
$100,000 but not over $104,999 85.0%
T37
$105,000 but not over $109,999 70.0%
T38
$110,000 but not over $114,999 55.0%
T39
$115,000 but not over $119,999 40.0%
T40
$120,000 but not over $124,999 25.0%
T41
$125,000 but not over $129,999 10.0%
T42
$130,000 but not over $139,999 5.0%
T43 $140,000 but not over $149,999 2.5%
T44
$150,000 and over 0.0%
(xxx) To the extent properly includable in gross income for federal 416
income tax purposes, for the taxable year commencing January 1, 2022, 417
the amount or amounts paid or otherwise credited to any eligible 418
resident of this state under (I) the 2020 Earned Income Tax Credit 419
enhancement program from funding allocated to the state through the 420
Coronavirus Relief Fund established under the Coronavirus Aid, Relief, 421
and Economic Security Act, P.L. 116-136, and (II) the 2021 Earned 422
Income Tax Credit enhancement program from funding allocated to the 423
state pursuant to Section 9901 of Subtitle M of Title IX of the American 424
Rescue Plan Act of 2021, P.L. 117-2; 425
(xxxi) For the taxable year commencing January 1, 2023, and each 426
taxable year thereafter, for a taxpayer licensed under the provisions of 427
chapter 420f or 420h, the amount of ordinary and necessary expenses 428
that would be eligible to be claimed as a deduction for federal income 429
tax purposes under Section 162(a) of the Internal Revenue Code but that 430
are disallowed under Section 280E of the Internal Revenue Code 431
because marijuana is a controlled substance under the federal 432
Controlled Substance Act; 433
(xxxii) To the extent properly includable in gross income for federal 434
income tax purposes, for the taxable year commencing on or after 435
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January 1, 2025, and each taxable year thereafter, any common stock 436
received by the taxpayer during the taxable year under a share plan, as 437
defined in section 12-217ss; 438
(xxxiii) To the extent properly includable in gross income for federal 439
income tax purposes, the amount of any student loan reimbursement 440
payment received by a taxpayer pursuant to section 10a-19m; 441
(xxxiv) Contributions to an ABLE account established pursuant to 442
sections 3-39k to 3-39q, inclusive, not to exceed five thousand dollars for 443
each individual taxpayer or ten thousand dollars for taxpayers filing a 444
joint return; [and] 445
(xxxv) To the extent properly includable in gross income for federal 446
income tax purposes, the amount of any payment received pursuant to 447
subsection (c) of section 3-122a; 448
(xxxvi) For an account holder, as defined in section 1 of this act, who 449
files a return under the federal income tax as an unmarried individual, 450
a married individual filing separately or a head of household, whose 451
federal adjusted gross income for the taxable year is less than one 452
hundred thousand dollars or who files a return under the federal 453
income tax as married individuals filing jointly whose federal adjusted 454
gross income for the taxable year is less than two hundred thousand 455
dollars: 456
(I) To the extent not deductible in determining federal adjusted gross 457
income, an amount equal to the contributions deposited during the 458
taxable year in a disaster savings account established pursuant to 459
subsection (c) of section 1 of this act, less any amounts withdrawn 460
during the taxable year by the account holder from such account 461
pursuant to subparagraph (D) of subdivision (2) of subsection (f) of 462
section 1 of this act. The amount allowed to be claimed under this 463
subclause for the taxable year shall not exceed two thousand five 464
hundred dollars for an unmarried individual, a married individual 465
filing separately or a head of household and five thousand dollars for 466
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married individuals filing jointly; and 467
(II) To the extent properly includable in gross income for federal 468
income tax purposes, an amount equal to the sum of all interest accrued 469
on a disaster savings account, established pursuant to subsection (c) of 470
section 1 of this act, during the taxable year; and 471
(xxxvii) To the extent properly includable in gross income for federal 472
income tax purposes, for an account holder who is a qualified 473
beneficiary of a disaster savings account, as those terms are defined in 474
section 1 of this act, and who files a return under the federal income tax 475
as an unmarried individual, a married individual filing separately or a 476
head of household, whose federal adjusted gross income for the taxable 477
year is less than one hundred thousand dollars or who files a return 478
under the federal income tax as married individuals filing jointly whose 479
federal adjusted gross income for the taxable year is less than two 480
hundred thousand dollars, an amount equal to any withdrawal from 481
such account that is used to pay or reimburse such qualified beneficiary 482
for eligible costs, as defined in section 1 of this act, incurred by the 483
qualified beneficiary. 484
Sec. 3. (NEW) (Effective January 1, 2026) (a) (1) For the taxable or 485
income year commencing on or after January 1, 2026, but prior to 486
January 1, 2027, there shall be allowed a credit against the tax imposed 487
under chapter 208 or 229 of the general statutes, other than the liability 488
imposed by section 12-707 of the general statutes, for contributions 489
deposited by the employer of an account holder in a disaster savings 490
account established pursuant to subsection (c) of section 1 of this act 491
during the taxable or income years commencing on or after January 1, 492
2025, but prior to January 1, 2027, provided such account holder was 493
employed by such employer at the time such contributions were made. 494
(2) For the taxable or income years commencing on or after January 495
1, 2027, there shall be allowed a credit against the tax imposed under 496
chapter 208 or 229 of the general statutes, other than the liability 497
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imposed by section 12-707 of the general statutes, for contributions 498
deposited by the employer of an account holder in a disaster savings 499
account established pursuant to subsection (c) of section 1 of this act 500
during the taxable or income year, provided such account holder was 501
employed by such employer at the time such contributions were made. 502
(3) The amount of the credit allowed under subdivisions (1) and (2) 503
of this subsection shall be equal to ten per cent of the amount of the 504
contributions made by the taxpayer into the disaster savings accounts 505
of account holders of such accounts during the income or taxable year, 506
provided the amount of the credit allowed for any income or taxable 507
year with respect to a specific account holder shall not exceed two 508
thousand five hundred dollars. 509
(b) If the taxpayer is an S corporation or an entity treated as a 510
partnership for federal income tax purposes, the credit may be claimed 511
by the shareholders or partners of the taxpayer. If the taxpayer is a single 512
member limited liability company that is disregarded as an entity 513
separate from its owner, the credit may be claimed by such limited 514
liability company's owner, provided such owner is a person subject to 515
the tax imposed under chapter 208 or 229 of the general statutes. Any 516
taxpayer claiming the credit shall provide to the Department of Revenue 517
Services documentation supporting such claim in the form and manner 518
prescribed by the Commissioner of Revenue Services. 519
Sec. 4. (Effective from passage) Not later than July 1, 2026, the Treasurer 520
shall make recommendations, in accordance with section 11-4a of the 521
general statutes, to the joint standing committee of the General 522
Assembly having cognizance of matters relating to banking regarding 523
whether and how marketable securities may be held in a disaster 524
savings account established pursuant to subsection (c) of section 1 of this 525
act. 526
This act shall take effect as follows and shall amend the following
sections:
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Section 1 from passage New section
Sec. 2 from passage and
applicable to taxable years
commencing on or after
January 1, 2025
12-701(a)(20)(B)
Sec. 3 January 1, 2026 New section
Sec. 4 from passage New section
Statement of Purpose:
To establish a disaster savings account and a related tax deduction and
credit.
[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.]