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Bill

SB 66

AN ACT ESTABLISHING A TEMPORARY PERSONAL INCOME TAX DEDUCTION FOR TIPS OR GRATUITIES.

2026 Regular Session Introduced by Jeff Gordon

Connecticut bill creates temporary state income tax deduction for tips/gratuities, reducing tax liability for service industry workers but at cost of state revenue.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#gratuities #incometaxdeductions(state)
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WeVote Research Nonpartisan
Bill Summary · SB 66

Legislative bill overview

SB 66 creates a temporary personal income tax deduction for tips and gratuities earned in Connecticut. The bill allows individuals to deduct tip income from their taxable income for a limited period, reducing the overall tax burden on workers in service industries.

Why is this important

Tips represent a significant portion of income for service workers (servers, bartenders, housekeeping staff, etc.), yet they are fully taxable at both federal and state levels. This deduction would provide direct tax relief to lower and middle-income workers who depend heavily on gratuity income, potentially improving take-home earnings during economic uncertainty.

Potential points of contention

  • Revenue impact: The state loses tax revenue from this deduction, requiring either budget cuts elsewhere or tax increases on other groups to maintain spending levels
  • Fairness questions: Benefits primarily service industry workers while other wage-earners receive no equivalent deduction; creates different tax treatment based on income type rather than need
  • Temporary designation: "Temporary" status creates uncertainty for workers and raises questions about why it isn't permanent if the policy is sound, or why it exists at all if temporary relief is the goal
  • Administrative complexity: Requires tracking and documenting tip income separately from wages; may create compliance challenges for both workers and employers
  • Limited scope: Does not address underlying issues like federal tip taxation or inadequate minimum wages in service sectors

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

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