The proposed bill, General Assembly Proposed Bill No. 5144, aims to amend section 12-701 of the general statutes to introduce a personal income tax deduction for certain payments received from insurance companies. Specifically, the bill allows taxpayers to deduct the portion of any payment received in exchange for a buyout or cancellation of a long-term care insurance policy, provided that this payment is also included in gross income for federal income tax purposes.

This legislative change is intended to provide financial relief to taxpayers who receive such payments, thereby encouraging the use of long-term care insurance policies. The bill reflects a commitment to support individuals in managing their long-term care needs while also addressing the tax implications of insurance payouts.