Connecticut House Bill HB05085

Connecticut 2024 Regular Session

• Introduced: 2/13/24
• Refer: 2/13/24

Caption

An Act Eliminating The Personal Income Tax On Individual Retirement Account Distributions.

Impact

The proposed legislation is designed to streamline the taxation process for retirees, effectively making it easier for them to access their funds without incurring additional tax liability. By eliminating the personal income tax on IRA distributions, the bill is expected to enhance the financial security of retirees, thereby positively affecting their disposable income. Proponents argue that this move aligns with broader efforts to promote savings in retirement accounts and encourages individuals to plan better for their post-employment life.

Summary

House Bill 05085, introduced by Representative Foncell, aims to eliminate the personal income tax on distributions from Individual Retirement Accounts (IRAs). The bill proposes to amend Title 12 of the general statutes, making it a legislative priority to provide financial relief to retirees by ensuring that no personal income tax is levied on IRA distributions, irrespective of the recipient's income level. This legislative change seeks to incentivize savings for retirement while alleviating the tax burden on individuals during their retirement years.

Contention

However, the bill may face opposition from stakeholders concerned about the potential revenue loss for the state from the elimination of this tax. Critics might argue that such a tax relief could disproportionately benefit wealthier retirees while undermining the state's fiscal health. Furthermore, there may be discussions regarding the fairness of the tax system and whether it should accommodate such significant exemptions for retirement accounts, particularly if it reduces available resources for public services that support aging populations.