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SB 95

AN ACT ESTABLISHING A CREDIT AGAINST THE PERSONAL INCOME TAX FOR CERTAIN EMPLOYEES OF DEFENSE CONTRACTORS AND OF DIRECT SUPPLIERS AND SUBCONTRACTORS OF DEFENSE CONTRACTORS.

2026 Regular Session Introduced by Saud Anwar and 13 co-sponsors

Connecticut bill would provide income tax credits to employees of defense contractors and their suppliers to boost hiring and retention in defense manufacturing sector.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
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Bill Summary · SB 95

Legislative bill overview

SB 95 would create a state income tax credit for employees working at defense contractors and their direct suppliers and subcontractors in Connecticut. The credit would reduce personal income tax liability for workers in these designated defense-related industries, effectively subsidizing employment in this sector through the tax code.

Why is this important

Connecticut has a significant defense manufacturing base, particularly in aerospace and submarine production. This bill attempts to make defense sector employment more financially attractive to workers and potentially encourage companies to hire or retain employees in the state, which could have implications for workforce retention and economic competitiveness in this industry cluster.

Potential points of contention

  • Revenue impact and fiscal cost: Tax credits reduce state revenue; the bill does not specify credit amounts, eligibility thresholds, or estimated cost to the state budget, making it impossible to assess fiscal impact
  • Definitional scope and fairness: The bill's language regarding "direct suppliers and subcontractors" could be vague, creating uncertainty about which companies qualify and potentially treating similar workers in adjacent industries differently
  • Economic incentive precedent: Targeted tax credits for specific industries raise questions about whether government should pick winners/losers in the economy or whether broad-based tax reduction would be more efficient
  • Verification and administration: Determining employee eligibility and preventing fraud could create compliance burdens for employers and administrative costs for the state

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

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