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HB 5018

AN ACT ESTABLISHING A PERSONAL INCOME TAX DEDUCTION FOR CERTAIN PAYMENTS RECEIVED FROM AN INSURANCE COMPANY.

2026 Regular Session Introduced by Mike Demicco and 1 co-sponsor

Connecticut bill creating personal income tax deduction for specified insurance company payments, reducing state tax revenue and requiring identification of eligible payment types.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
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WeVote Research Nonpartisan
Bill Summary · HB 5018

Legislative bill overview

HB 5018 proposes to create a personal income tax deduction for certain payments received from insurance companies in Connecticut. The bill would allow taxpayers to exclude specified insurance-related payments from their taxable income, reducing their overall tax liability. The specific insurance payments eligible for this deduction are not detailed in the title alone, but typically such proposals target payments like life insurance proceeds, disability insurance benefits, or liability settlements.

Why is this important

This change would directly affect Connecticut's tax revenue and individual tax burdens. Depending on which insurance payments qualify, the deduction could provide meaningful relief to certain groups (such as disability recipients or accident survivors) while reducing state tax collections. The fiscal impact could be significant if broadly applied, potentially affecting the state budget and requiring offsetting revenue measures or spending cuts.

Potential points of contention

  • Revenue impact: The state would lose tax revenue from this deduction; without specification of eligible payments, the cost is unclear and could be substantial
  • Equity concerns: If the deduction favors higher-income earners or specific insurance products, it may be seen as regressive or benefiting narrow groups unfairly
  • Definition ambiguity: The bill's reference to "certain payments" lacks clarity about which insurance types qualify, creating uncertainty for taxpayers and administrators

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

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