Senate Bill No. 1278 seeks to amend Connecticut's tax statutes concerning long-term care insurance premiums and the treatment of various income types for state tax purposes. The bill proposes the repeal of subparagraph (B) of subdivision (20) of subsection (a) of section 12-701, replacing 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, effective for taxable years beginning on or after January 1, 2025, while also mandating public hearings for premium rate increases exceeding 10%.

Moreover, the bill outlines specific income thresholds for individuals and couples filing federal tax returns, detailing the treatment of Social Security benefits based on adjusted gross income. It includes provisions for the treatment of various income sources, such as financial assistance from the Crumbling Foundations Assistance Fund and distributions from IRAs, with specific percentages exempt from state income tax based on income levels. The bill also addresses the management of long-term care insurance premiums by requiring that any increase of 20% or more be spread over a minimum of three years, thereby providing stability for policyholders. Overall, SB1278 aims to clarify tax liabilities and provide targeted relief to taxpayers while ensuring transparency in long-term care insurance premium adjustments.

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