AN ACT CONCERNING PERSONAL INCOME TAX REFUNDS.

2026 Regular Session Introduced by Eric Berthel and 11 co-sponsors

The bill transfers 330,811,954 from the BRF to the General Fund to issue one-time personal income tax refunds calculated by DRS for taxpayers who filed a federal return for the 202

REF. TO JOINT COMM. ON Finance, Revenue and Bonding

#budgetreservefund(rainydayfund) #incometaxrefunds(state)

Overview

Purpose: To transfer a specific amount from the Budget Reserve Fund to the General Fund and use those funds to provide personal income tax refunds to taxpayers who file a federal income tax return for the tax year beginning January 1, 2025, as determined by the Department of Revenue Services (DRS).

LCO number: 918

Introduced by: Multiple state senators; co-sponsored by several representatives

Referral: Finance, Revenue and Bonding

Key Provisions

Funds Transfer: States that $330,811,954 shall be transferred from the Budget Reserve Fund (BRF) to the General Fund.

Use of Funds: The transferred amount is to be used to provide personal income tax refunds to taxpayers.

Refund Calculation: Refunds are to be calculated by the Department of Revenue Services (DRS).

Tax Year Reference: Refunds apply to taxpayers who filed a federal income tax return for the taxable year commencing on or after January 1, 2025.

Authority and Administration: The provision designates the DRS to compute and issue the refunds, suggesting that the state will issue refunds based on amounts paid in personal income tax.

Affected Parties

Taxpayers in Connecticut: Individuals who filed a federal return for the applicable tax year and paid personal income taxes in Connecticut would be eligible to receive refunds.

General Fund/State Finances: Reallocation of BRF money to the General Fund for the purpose of issuing refunds; impact on the BRF balance and long-term reserve considerations.

Department of Revenue Services (DRS): Responsible for calculating and issuing the refunds.

Procedural and Timeline Considerations

Effective Action: The bill directs a one-time transfer from the BRF to the General Fund and a subsequent issuance of refunds, as calculated by DRS. The exact timing (when refunds would be issued) is not specified in the provided text, but it implies refunds would be issued after the transfer and calculation by DRS.

Legislative Path: Referred to the Joint Committee on Finance, Revenue and Bonding for consideration; sponsor list indicates cross-party support.

Potential Impacts and Considerations

Fiscal Impact: A one-time infusion of $330.8 million from the BRF to the General Fund for refunds; potential implications for state reserves and future budgeting.

Taxpayer Benefit: Provides refunds to eligible Connecticut taxpayers, potentially easing the tax burden for those who paid personal income tax in the relevant year.

Policy Implications: Signals a use of surplus reserve funds to directly benefit taxpayers; could influence taxpayer perceptions of state fiscal health and reserve adequacy.

Notes

The bill text is concise and focuses on the transfer amount, the use of funds, and the calculation by DRS.

No additional provisions (e.g., eligibility criteria beyond the tax year reference, minimum refund amounts, or clawback provisions) are included in the provided document.

If you’d like, I can add a brief comparison to how similar one-time refund actions have been handled in the past, or outline potential implementation steps for the DRS.

Bill