Connecticut 2025 Regular Session

Connecticut Senate Bill SB01558 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	LCO No. 7060 1 of 5
4	4
5	5	General Assembly Raised Bill No. 1558
6	6	January Session, 2025
7	7	LCO No. 7060
8	8
9	9
10	10	Referred to Committee on FINANCE, REVENUE AND
11	11	BONDING
12	12
13	13
14	14	Introduced by:
15	15	(FIN)
16	16
17	17
18	18
19	19
20	20	AN ACT CONCERNING INCOME TAXES IMPOSED BY OTHER
21	21	JURISDICTIONS ON RESIDENTS OF THE STATE.
22	22	Be it enacted by the Senate and House of Representatives in General
23	23	Assembly convened:
24	24
25	25	Section 1. Subsection (a) of section 12-704 of the general statutes is 1
26	26	repealed and the following is substituted in lieu thereof (Effective January 2
27	27	1, 2026, and applicable to taxable years commencing on or after January 1, 3
28	28	2026): 4
29	29	(a) (1) Any resident or part-year resident of this state shall be allowed 5
30	30	a credit, subject to the provisions of subdivision (6) of this subsection, 6
31	31	against the tax otherwise due under this chapter in the amount of any 7
32	32	income tax imposed on such resident or part-year resident for the 8
33	33	taxable year by another state of the United States or a political 9
34	34	subdivision thereof or the District of Columbia on income derived from 10
35	35	sources therein and [which] that is also subject to tax under this chapter. 11
36	36	(2) In the case of a resident, the credit provided under this section 12
37	37	shall not exceed the proportion of the tax otherwise due under this 13
38	38	chapter that the amount of the taxpayer's Connecticut adjusted gross 14
39	39	Raised Bill No. 1558
40	40
41	41
42	42
43	43	LCO No. 7060 2 of 5
44	44
45	45	income derived from or connected with sources in the other taxing 15
46	46	jurisdiction bears to such taxpayer's Connecticut adjusted gross income 16
47	47	under this chapter. The provisions of this section shall also apply to 17
48	48	resident trusts and estates and, wherever reference is made in this 18
49	49	section to residents of this state, such reference shall be construed to 19
50	50	include resident trusts and estates. 20
51	51	(3) In the case of a part-year resident, the credit provided under this 21
52	52	section shall not exceed the proportion of the tax otherwise due during 22
53	53	the period of residency under this chapter that the amount of the 23
54	54	taxpayer's Connecticut adjusted gross income derived from or 24
55	55	connected with sources in the other jurisdiction during the period of 25
56	56	residency bears to such taxpayer's Connecticut adjusted gross income 26
57	57	during the period of residency under this chapter. The provisions of this 27
58	58	section shall also apply to part-year resident trusts and, wherever 28
59	59	reference is made in this section to part-year residents of this state, such 29
60	60	reference shall be construed to include part-year resident trusts. 30
61	61	(4) The allowance of the credit provided under this section shall not 31
62	62	reduce the tax otherwise due under this chapter to an amount less than 32
63	63	what would have been due if the income subject to taxation by such 33
64	64	other jurisdiction were excluded from Connecticut adjusted gross 34
65	65	income. 35
66	66	(5) For purposes of this subsection, a tax on wages that is paid to 36
67	67	another state of the United States or a political subdivision thereof or the 37
68	68	District of Columbia by an employer on behalf of an employee and for 38
69	69	which a credit is allowed by such other jurisdiction shall be considered 39
70	70	an income tax and a comparable credit may be claimed by the resident 40
71	71	or part-year resident, subject to the limitations set forth in this 41
72	72	subsection, in the form and manner prescribed by the commissioner. 42
73	73	(6) Notwithstanding the provisions of subdivisions (2) and (3) of this 43
74	74	subsection, the portion of the amount of any credit allowed pursuant to 44
75	75	this section that is attributable to income derived from services rendered 45
76	76	Raised Bill No. 1558
77	77
78	78
79	79
80	80	LCO No. 7060 3 of 5
81	81
82	82	while such resident or part-year resident was within this state shall be 46
83	83	multiplied by ninety-nine-hundredths per cent. 47
84	84	Sec. 2. (Effective from passage) The Attorney General shall study 48
85	85	specific steps the office of the Attorney General may take to defend 49
86	86	residents of this state from having taxes imposed by another state of the 50
87	87	United States or a political subdivision thereof or the District of 51
88	88	Columbia on income derived from services rendered while such 52
89	89	resident was within this state. Not later than January 1, 2026, the 53
90	90	Attorney General shall submit a report, in accordance with the 54
91	91	provisions of section 11-4a of the general statutes, of the findings of such 55
92	92	study and any recommendations of said office to the joint standing 56
93	93	committee of the General Assembly having cognizance of matters 57
94	94	relating to finance, revenue and bonding. 58
95	95	Sec. 3. (NEW) (Effective from passage) For taxable years commencing 59
96	96	on or after January 1, 2020: 60
97	97	(1) A resident of this state who satisfies the provisions of 61
98	98	subparagraphs (A) to (D), inclusive, of this subdivision shall be allowed 62
99	99	a credit against the tax otherwise due for the applicable taxable year 63
100	100	under chapter 229 of the general statutes, other than the liability 64
101	101	imposed by section 12-707 of the general statutes, in an amount equal to 65
102	102	fifty per cent of the amount of taxes owed to this state as a result of the 66
103	103	readjustment of the credit for taxes paid to another state of the United 67
104	104	States or a political subdivision thereof or the District of Columbia, 68
105	105	pursuant to section 12-704 of the general statutes, as amended by this 69
106	106	act. To be eligible for the credit under this section, such resident shall 70
107	107	have: 71
108	108	(A) Paid any income tax or wage tax imposed for the taxable year by 72
109	109	another state of the United States or a political subdivision thereof or the 73
110	110	District of Columbia; 74
111	111	(B) Applied for and been denied a refund from such other jurisdiction 75
112	112	for taxes paid to such other jurisdiction on income derived from services 76
113	113	Raised Bill No. 1558
114	114
115	115
116	116
117	117	LCO No. 7060 4 of 5
118	118
119	119	rendered while such resident was within this state; 77
120	120	(C) Filed an appeal with a court or tribunal through which such 78
121	121	resident formally protested such denial; and 79
122	122	(D) Obtained a final decision that resulted in such resident being 80
123	123	refunded taxes paid to such other jurisdiction on income derived from 81
124	124	services rendered while such resident was within this state. 82
125	125	(2) No penalty or interest shall be imposed on any late payment of 83
126	126	the tax due under chapter 229 of the general statutes, other than the 84
127	127	liability imposed by section 12-707 of the general statutes, if (A) such 85
128	128	late payment is attributable to a reduction in the credit for taxes paid 86
129	129	under section 12-704 of the general statutes, as amended by this act, (B) 87
130	130	such reduction in the credit for taxes paid is the direct result of a refund 88
131	131	that a resident of this state received from another state of the United 89
132	132	States or a political subdivision thereof or the District of Columbia, (C) 90
133	133	such refund relates to income derived from services rendered while 91
134	134	such resident was not within such other jurisdiction, and (D) such other 92
135	135	jurisdiction requires employee income to be sourced to an employer's 93
136	136	location if a nonresident renders services from an out-of-state location. 94
137	137	This act shall take effect as follows and shall amend the following
138	138	sections:
139	139
140	140	Section 1 January 1, 2026, and
141	141	applicable to taxable years
142	142	commencing on or after
143	143	January 1, 2026
144	144	12-704(a)
145	145	Sec. 2 from passage New section
146	146	Sec. 3 from passage New section
147	147
148	148	Statement of Purpose:
149	149	To (1) reduce a portion of the amount of the credit for income taxes paid
150	150	to other states, (2) require the Attorney General to study ways to defend
151	151	residents from having income tax imposed by other jurisdictions on
152	152	income derived from services rendered while such resident was within
153	153	Raised Bill No. 1558
154	154
155	155
156	156
157	157	LCO No. 7060 5 of 5
158	158
159	159	this state, and (3) provide a credit to residents who file an appeal
160	160	protesting the tax imposed by such other jurisdiction.
161	161
162	162	[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except
163	163	that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not
164	164	underlined.]
165	165