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SB 902

AN ACT CONCERNING THE DEDUCTION AND WITHHOLDING OF PERSONAL INCOME TAX FROM PENSION PAYMENTS AND ANNUITY DISTRIBUTIONS.

2025 Regular Session Introduced by Cathy Osten

Connecticut bill modifies tax withholding rules for pension and annuity payments, affecting retiree income and state tax collection procedures.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#annuities #income #incometaxexemptions(state) #pensions
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Bill Summary · SB 902

Legislative bill overview

SB 902 would modify Connecticut's personal income tax rules regarding the withholding and deduction of taxes from pension payments and annuity distributions. The bill adjusts how taxes are calculated and withheld from these retirement income sources, potentially affecting both retirees and the state's tax collection process.

Why is this important

Pension and annuity distributions represent significant income for Connecticut retirees, and changes to withholding rules directly impact their take-home pay and tax compliance. This affects hundreds of thousands of state residents receiving retirement income and influences state revenue forecasting and collection mechanisms.

Potential points of contention

  • Retiree cash flow impact: Changes to withholding amounts could leave retirees with unexpected tax bills at year-end or reduce their monthly income, affecting fixed-income households
  • Administrative complexity: Altering withholding procedures for financial institutions managing pension distributions requires system changes and clear guidance on implementation
  • Revenue neutrality questions: Unclear whether the bill maintains, increases, or decreases overall state tax revenue, which affects state budget planning

Compiled from official sources — confirm details with the bill’s official record.

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