General Assembly Raised Bill No. 7269 aims to provide a personal income tax deduction for Connecticut residents who pay rent for their primary residence, effective January 1, 2026. The bill allows eligible taxpayers to claim a subtraction from their taxable income based on a percentage of the rent paid, which includes certain utilities and services provided by landlords. However, it excludes security deposits, payments to cooperative housing corporations, and short-term rental payments unless they are under a lease agreement. The deduction percentages will vary according to the taxpayer's federal adjusted gross income, with maximum allowable amounts set for different income brackets.

In addition to the rent deduction, the bill introduces changes to the taxation of Social Security benefits and pension or annuity income, allowing for reductions based on federal adjusted gross income thresholds. It outlines a phased approach to exempting a percentage of pension and annuity income from taxation, with full exemption for qualifying individuals by 2023. The bill also includes provisions for deductions related to organ donation expenses, financial assistance from the Crumbling Foundations Assistance Fund, and student loan reimbursements, while allowing deductions for licensed marijuana business expenses that are otherwise disallowed under federal law. Overall, Raised Bill No. 7269 seeks to provide tax relief to lower and middle-income taxpayers by enhancing various tax benefits and deductions.

Statutes affected:
Raised Bill: 12-701