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HB 5154

AN ACT CONCERNING THE PERSONAL INCOME TAX DEDUCTIONS FOR SOCIAL SECURITY BENEFITS, PENSION AND ANNUITY INCOME AND DISTRIBUTIONS FROM CERTAIN INDIVIDUAL RETIREMENT ACCOUNTS.

2025 Regular Session Introduced by Jason Doucette

Connecticut bill expands tax deductions for Social Security, pensions, annuities, and certain IRA distributions, reducing retiree tax burden but decreasing state revenue.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#annuities #incometaxdeductions(state) #pensions #socialsecurity
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WeVote Research Nonpartisan
Bill Summary · HB 5154

Legislative bill overview

HB 5154 modifies Connecticut's personal income tax treatment of Social Security benefits, pension income, annuity payments, and distributions from certain Individual Retirement Accounts (IRAs). The bill would create or expand tax deductions for these retirement income sources, effectively reducing taxable income for beneficiaries in these categories.

Why is this important

Connecticut is one of a few states that taxes Social Security benefits and retirement income, which can significantly impact seniors and retirees living on fixed incomes. This bill directly affects the after-tax income available to retirees and could influence whether seniors remain in or relocate to Connecticut, with broader implications for state revenue and demographic trends.

Potential points of contention

  • Revenue impact: Expanding deductions for retirement income will reduce state tax revenue, requiring either spending cuts elsewhere or tax increases on other income sources
  • Equity concerns: The deductions primarily benefit retirees and may shift the tax burden toward younger workers and non-retirement earners
  • Implementation complexity: Determining which IRA distributions qualify and verifying eligibility could create administrative challenges for both taxpayers and the Department of Revenue Services

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

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