Substitute House Bill No. 6884 seeks to enhance tax credits for student loan payments made by employers, broadening eligibility to include a wider range of employers subject to tax under Chapter 229. The bill amends Section 12-217qq of the general statutes by replacing the term "corporation" with "taxpayer," thereby allowing qualified employers to claim tax credits for payments made on behalf of qualified employees towards their student loans. The definition of "qualified employee" is updated to include individuals who have obtained their first bachelor's degree within the last five years and are employed full-time. The tax credit is set at 50% of the payments made towards the principal balance of the loans, with a maximum limit of $2,625 per qualified employee.

Additionally, the bill introduces provisions for qualified small businesses to exchange their tax credits for a credit refund, while maintaining a cap of $10 million on the total amount of tax credits that can be reserved per fiscal year. The bill also modifies the existing cap from a calendar year limit to a fiscal year limit and includes a one-time cost of up to $175,000 for the Department of Revenue Services to update its systems. The projected fiscal impact includes a revenue loss of up to $10 million annually starting in FY 27, with the changes set to take effect on January 1, 2026, applicable to taxable years commencing on or after that date.

Statutes affected:
Raised Bill: 12-217qq
HED Joint Favorable Substitute Change of Reference: 12-217qq
FIN Joint Favorable: 12-217qq
File No. 883: 12-217qq