Senate Bill No. 1278 seeks to amend Connecticut's tax statutes, particularly concerning long-term care insurance premium rates and the treatment of various income sources for state tax purposes. The bill proposes to repeal subparagraph (B) of subdivision (20) of subsection (a) of section 12-701 and replace it with new provisions that clarify how certain income types, such as refunds for overpayment of income taxes and interest from state-issued obligations, can be subtracted from gross income when calculating Connecticut adjusted gross income. Additionally, the bill introduces a personal income tax deduction for long-term care insurance premiums, allowing taxpayers to reduce their adjusted gross income by the amount of premiums paid, with specific exclusions for certain policies.

Moreover, the bill mandates that long-term care insurers hold public hearings before implementing premium rate increases exceeding 10%, ensuring policyholders are notified in advance. It also outlines a phased approach to the taxation of pension and annuity income, with deductions based on federal adjusted gross income thresholds, and introduces provisions for taxpayers incurring expenses related to organ donation. Other insertions include the treatment of financial assistance from the Crumbling Foundations Assistance Fund and specific deductions for IRA distributions, while outdated references to previous tax credits are deleted. Overall, SB1278 aims to provide clearer guidelines and tax relief for Connecticut taxpayers while ensuring compliance with federal regulations.

Statutes affected:
Raised Bill: 12-701
AGE Joint Favorable Change of Reference: 12-701
INS Joint Favorable: 12-701
File No. 284: 12-701