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HB 5089

AN ACT EXEMPTING OVERTIME WAGES, TIPS OR GRATUITIES AND SOCIAL SECURITY BENEFITS FROM THE PERSONAL INCOME TAX.

2026 Regular Session Introduced by Doug Dubitsky and 2 co-sponsors

Bill exempts overtime wages, tips, gratuities, and Social Security benefits from Connecticut state income tax, reducing revenue and narrowing the tax base.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#gratuities #incometaxpersonalexemptions(state) #overtime #socialsecurity
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WeVote Research Nonpartisan
Bill Summary · HB 5089

Legislative bill overview

HB 5089 proposes to exempt overtime wages, tips/gratuities, and Social Security benefits from Connecticut's personal income tax. This would create new exclusions in the state's tax code, reducing taxable income for workers who earn overtime pay, service industry workers who receive tips, and retirees receiving Social Security payments.

Why is this important

Connecticut currently taxes all wage income, including overtime, and Social Security benefits are subject to state income tax. This bill would provide tax relief to three specific groups: workers in jobs requiring extended hours, service industry workers, and seniors living on fixed retirement income. The fiscal impact could be significant, potentially reducing state revenue while affecting different income groups unevenly.

Potential points of contention

  • Revenue impact: Exempting these income categories could substantially reduce state tax revenue without identified offsetting revenue sources or spending cuts
  • Equity concerns: The exemptions benefit some workers (those who work overtime or earn tips) more than others in similar income brackets, and primarily benefit retirees already receiving Social Security
  • Implementation complexity: Distinguishing overtime wages from regular wages and tracking tips for tax purposes adds administrative burden and audit complexity
  • Incomplete relief: Workers earning modest wages who don't work overtime or receive tips would see no benefit, potentially widening fairness questions about tax burden distribution

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

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