House Bill No. 7055 proposes significant changes to the tax code, particularly focusing on providing financial relief to specific groups. The bill allows municipalities to implement property tax abatement programs for the surviving domestic partners of police officers, firefighters, and emergency medical technicians who have died in the line of duty. This is achieved by adding the phrase "or domestic partner, as defined by such ordinance" to Section 12-81x of the general statutes, effective October 1, 2025. Additionally, the bill introduces a personal income tax deduction for stipends received by volunteer firefighters and emergency medical services personnel, which will take effect on January 1, 2026, and applies to taxable years commencing thereafter.

Moreover, the bill outlines adjustments to the taxation of Social Security benefits and pension or annuity income based on federal adjusted gross income (AGI) thresholds, with a phased approach to gradually increase the percentage of income that can be excluded from taxation for lower AGIs. Key insertions include provisions for the treatment of Holocaust victims' settlement payments and retirement pay for Armed Forces members, while certain existing language is deleted to streamline tax treatment. The bill also introduces deductions for organ donation-related expenses, licensed marijuana business expenses, and student loan reimbursements, with various effective dates set for October 1, 2025, and January 1, 2026. The fiscal impact includes a projected revenue loss of $250,000 for the General Fund starting in FY 27 and potential revenue losses for municipalities beginning in FY 26.

Statutes affected:
Raised Bill: 12-81x, 12-701
PS Joint Favorable Change of Reference: 12-81x, 12-701
FIN Joint Favorable: 12-81x, 12-701
File No. 829: 12-81x, 12-701