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 and supporting individuals in managing their healthcare costs. The bill does not delete any existing legal language but rather adds new provisions to enhance the tax benefits available to taxpayers in this context.