The proposed legislation, General Assembly Raised Bill No. 6884, aims to expand tax credits for employers making student loan payments on behalf of their employees to include pass-through entities, such as S corporations and partnerships. The bill modifies Section 12-217qq of the general statutes, which is set to take effect on January 1, 2026, and applies to taxable years commencing on or after that date. Key definitions are updated, including changing "corporation" to "taxpayer" for qualified employers and specifying that qualified employees must have earned their first bachelor's degree within the last five years. The bill also introduces a new provision allowing shareholders or partners of pass-through entities to claim the credit.

Additionally, the bill stipulates that qualified employers can receive a tax credit equal to 50% of the payments made towards the outstanding principal balance of student loans for qualified employees, with a cap of $2,625 per employee per year. The total amount of tax credits that can be reserved by the commissioner is limited to $10 million per fiscal year, and applications will be processed in the order they are received. The legislation also allows qualified small businesses to exchange their credits for a refund, subject to certain conditions. Overall, the bill seeks to enhance support for student loan repayment through employer contributions, particularly benefiting pass-through entities.

Statutes affected:
Raised Bill: 12-217qq