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SB 735

AN ACT EXEMPTING SOCIAL SECURITY BENEFITS AND PENSION OR ANNUITY INCOME FROM THE PERSONAL INCOME TAX.

2025 Regular Session Introduced by Mark Anderson and 5 co-sponsors

Connecticut bill would exempt Social Security and pension income from state income tax, reducing revenue but benefiting retirees and potentially attracting retirement-age residents.

REF. TO JOINT COMM. ON Finance, Revenue and Bonding
#annuities #incometaxpersonalexemptions(state) #pensions #socialsecurity
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Bill Summary · SB 735

Legislative bill overview

SB 735 would exempt Social Security benefits and pension or annuity income from Connecticut's personal income tax. This would provide tax relief to retirees and seniors who receive these income sources, effectively reducing their state tax burden regardless of total income level.

Why is this important

Connecticut currently taxes both Social Security benefits and retirement income, placing it among states with less favorable tax treatment for retirees. This bill could influence retirement migration patterns, affect state revenue projections, and shift the tax burden toward other income sources or taxpayer groups. The fiscal impact could be substantial depending on how many retirees benefit and what alternative revenue sources the state might pursue.

Potential points of contention

  • Revenue impact: Exempting these income sources would reduce state tax collections significantly; lawmakers would need to identify alternative revenue or accept reduced funding for state services
  • Fairness concerns: Critics may argue this benefits wealthy retirees with substantial pension income while not helping working-age residents or those dependent on wages, potentially making the tax code less progressive
  • Fiscal sustainability: Connecticut faces ongoing budget challenges; opponents may question whether the state can afford broad tax exemptions without corresponding spending cuts or tax increases elsewhere

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

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