Raised Bill No. 7007 proposes significant amendments to the Connecticut tax code, focusing on providing income tax deductions for individuals who care for elderly persons, children, or disabled individuals. The bill repeals subparagraph (B) of subdivision (20) of subsection (a) in Section 12-701 and replaces it with new provisions that allow for various deductions from gross income, including income exempt from state taxation due to federal law, exempt dividends from regulated investment companies, and certain state income tax refunds or credits. The bill emphasizes support for caregivers by introducing specific deductions for Social Security benefits and other income types, with the changes set to take effect from the passage of the bill for taxable years commencing on or after January 1, 2025.

Additionally, the bill outlines new provisions for tax deductions related to individual retirement accounts (IRAs), allowing for a gradual increase in the percentage of distributions that can be excluded from gross income, starting with a 50% deduction in 2024 and reaching 100% by 2026. It also introduces deductions for taxpayers licensed under marijuana-related chapters, student loan reimbursements, contributions to ABLE accounts, and expenses for the care of qualifying individuals aged 70 and older. The bill deletes certain existing provisions while inserting new language to enhance tax benefits for caregivers and individuals receiving specific types of income, ultimately aiming to provide tax relief to lower and middle-income taxpayers.

Statutes affected:
Raised Bill: 12-701
AGE Joint Favorable Change of Reference: 12-701