OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sSB-1401
AN ACT ESTABLISHING DISASTER SAVINGS ACCOUNTS AND A
RELATED TAX DEDUCTION AND CREDIT.
Primary Analyst: CW 3/26/25
Contributing Analyst(s):
Reviewer: WL
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 26 $ FY 27 $
Department of Revenue Services GF - Revenue
Loss
Up to
40,000
Up to
210,000
Department of Revenue Services GF - Cost Impact Up to
175,000
None
Note: GF=General Fund
Municipal Impact: None
Explanation
The bill, which establishes a disaster savings program and associated
personal income tax deduction and business tax credit, results in a (1)
General Fund revenue loss of up to $40,000 in FY 26 and up to $210,000
in FY 27, and (2) one-time General Fund cost of up to $175,000 in FY 26
only.
Personal Income Tax Deduction
The personal income tax deduction for qualifying account
contributions, accrued interest, and withdrawals is estimated to result
in an annual General Fund revenue loss of up to $40,000 beginning in
FY 26. This assumes approximately 260 accounts annually based on
data from Alabama and Mississippi indicating that, on average, 0.03%
of taxpayers establish disaster savings accounts with an average
contribution of approximately $3,300 each. 2025SB-01401-R000293-FN.DOCX Page 2 of 2
Business Tax Credit
The credit for employer contributions is estimated to result in a
General Fund revenue loss of up to $170,000 in FY 27 and up to $90,000
annually thereafter.
1
This estimate assumes the same level of qualifying
accounts as the estimate for the personal income tax deduction.
Department of Revenue Services (DRS) Cost
The bill also results in a one-time cost of up to $175,000 to the DRS in
FY 26 associated with programming updates to the CTax tax
administration system and myconneCT online portal, form
modification, and printing/mailing costs.
The Out Years
The bill results in an ongoing revenue loss estimated at up to $130,000
annually beginning in FY 28.
Sources: Alabama Department of Revenue
Mississippi Department of Revenue
1
The estimated revenue loss is larger in FY 27 as the bill specifies that, for the 2026 tax
year only, the credit may be claimed for contributions made in both the 2025 and 2026
tax years.