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HB 5051

AN ACT ESTABLISHING A PERSONAL INCOME TAX DEDUCTION FOR TIPS OR GRATUITIES AND OVERTIME PAY.

2026 Regular Session Introduced by Mitch Bolinsky and 6 co-sponsors

Connecticut bill would allow state income tax deductions for tips, gratuities, and overtime pay, reducing taxable income for service and hourly workers.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
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Bill Summary · HB 5051

Legislative bill overview

HB 5051 proposes to allow Connecticut residents to deduct tips, gratuities, and overtime pay from their state personal income tax obligations. The bill would reduce taxable income for workers who receive these forms of compensation, potentially lowering their overall state tax liability.

Why is this important

Service industry workers and those working overtime hours could see meaningful reductions in their state tax burden, particularly benefiting lower-to-middle income earners. This directly affects workers in restaurants, hospitality, gig economy, and other sectors where tips or extended hours are common compensation sources.

Potential points of contention

  • Revenue impact: Reducing taxable income decreases state tax collection, potentially requiring other revenue sources or budget adjustments to offset lost income
  • Equity concerns: The benefit disproportionately favors service and hourly workers while potentially widening tax disparities with salaried employees who don't receive tips or overtime
  • Implementation complexity: Requires workers to substantiate and document tips and overtime; gray areas exist regarding gig economy income and informal tip arrangements
  • Federal coordination: Federal tax code doesn't allow similar deductions, creating state-federal tax complexity and potential audit complications for filers

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

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