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HB 5097

AN ACT ELIMINATING THE QUALIFYING INCOME THRESHOLDS FOR THE PERSONAL INCOME TAX DEDUCTIONS FOR SOCIAL SECURITY BENEFITS, PENSION OR ANNUITY INCOME AND CERTAIN INDIVIDUAL RETIREMENT ACCOUNT DISTRIBUTIONS.

2026 Regular Session Introduced by Mark Anderson

Connecticut bill removes income limits on tax deductions for Social Security, pensions, and IRA distributions, benefiting higher-earning retirees while reducing state tax revenue.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#annuities #incometaxdeductions(state) #individualretirementaccounts(iras) #pensions #socialsecurity
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WeVote Research Nonpartisan
Bill Summary · HB 5097

Legislative bill overview

HB 5097 would remove income limits that currently restrict Connecticut residents from claiming personal income tax deductions for Social Security benefits, pension/annuity income, and certain IRA distributions. Currently, these deductions phase out or disappear for higher-income taxpayers; this bill would make them available to all income levels regardless of how much a person earns.

Why is this important

This change would primarily benefit higher-income retirees and seniors who are currently ineligible for these deductions due to income thresholds. It would reduce state tax revenue while increasing the after-tax income of affected retirees, potentially affecting Connecticut's budget balance and tax policy equity.

Potential points of contention

  • Revenue impact: Eliminating income thresholds would increase the cost to the state budget by removing tax revenue, with the largest benefits going to higher-income individuals
  • Equity concerns: Critics may argue this disproportionately favors wealthier retirees while lower-income seniors already benefit from the deductions, effectively widening the disparity
  • Fiscal sustainability: Connecticut faces ongoing budget pressures; opponents may question whether the state can afford broader tax deductions without offsetting revenue sources or spending cuts

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

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