House Bill No. 7055 proposes significant amendments to municipal tax abatements and personal income tax deductions, particularly benefiting the families of first responders. The bill allows municipalities to offer property tax abatements to the surviving spouses or domestic partners of police officers, firefighters, and emergency medical technicians who have died in the line of duty, inserting the phrase "or domestic partner, as defined by such ordinance," into Section 12-81x to broaden eligibility. Additionally, it introduces a state personal income tax deduction of up to $2,000 for volunteer firefighters and emergency medical services personnel for certain payments received, specifically those exceeding the federal exclusion limit of $600.

The bill also modifies personal income tax regulations by repealing and replacing provisions in Section 12-701, clarifying exemptions for federal income tax obligations and adjusting the taxation of Social Security benefits and pension income based on federal adjusted gross income (AGI). It outlines a phased approach to pension and annuity income taxation, allowing complete exemptions for individuals with an AGI under $75,000 starting in 2024, while gradually reducing exemptions for higher earners. Other provisions include deductions for organ donation expenses, financial assistance from the Crumbling Foundations Assistance Fund, and expenses related to licensed marijuana businesses. The bill anticipates a General Fund revenue loss of $250,000 starting in FY 27 and sets effective dates for various sections beginning October 1, 2025, and January 1, 2026.

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