Connecticut House Bill HB05130

Connecticut 2023 Regular Session

• Introduced: 1/10/23
• Refer: 1/10/23

Caption

An Act Concerning The Deduction And Withholding Of Personal Income Tax From Pension And Annuity Distributions.

Impact

If passed, HB 05130 would result in significant changes to how pension and annuity distributions are managed in terms of taxation at the state level. By removing the withholding requirement, the bill seeks to enhance the disposable income of retirees, thereby providing a potential boost to consumer spending among this demographic. Furthermore, this policy shift reflects a broader trend toward tax relief for older individuals, aligning with efforts to support seniors financially during retirement.

Summary

House Bill 05130 proposes to amend existing statutes concerning the deduction and withholding of personal income tax specifically from pension and annuity distributions. The primary goal of this bill is to eliminate the requirement for payers of pension and annuity distributions to deduct and withhold personal income tax from such payments. This legislation aims to ease the financial burden on retirees who depend on these distributions as a primary source of income, effectively allowing them to retain more of their funds without the initial tax deduction.

Contention

There may be contention surrounding this bill from different perspectives. Proponents argue that eliminating the withholding requirement grants greater financial freedom to retirees and reduces automatic tax liabilities which could be beneficial for individuals on fixed incomes. However, critics may express concern about the potential for reduced state revenue, as the upfront withholding from these distributions is a source of tax income. As such, discussions around the bill could involve debates about balancing fiscal responsibility for the state while providing necessary support for retirees.