General Assembly Raised Bill No. 7269 seeks to provide tax relief to Connecticut residents by establishing a personal income tax deduction for a portion of rent paid for their primary residence, effective January 1, 2026. The bill allows eligible taxpayers to claim a subtraction from their taxable income based on the rent paid, with specific income thresholds determining the percentage of rent that can be deducted. For example, unmarried individuals or heads of households earning less than $75,000 can deduct 50% of their rent, up to $4,000, while those with higher incomes face reduced percentages and lower maximum deductions. The bill also includes provisions that define "rent" to encompass various utilities and services provided by landlords, while excluding security deposits and short-term rental payments unless under a lease agreement.

In addition to the rent deduction, the bill introduces changes to the taxation of Social Security benefits and pension or annuity income, allowing for a reduction in the amount of Social Security benefits that are includable for federal income tax purposes based on income levels. It outlines a phased approach to the taxation of pension and annuity income, gradually increasing the percentage exempt from taxation over several years. The bill amends existing law by inserting new provisions into section 3-122a, specifying the effective date and applicability of the new tax deduction, while also addressing various deductions related to organ donation expenses, marijuana business expenses, and student loan reimbursements. Overall, Raised Bill No. 7269 aims to provide financial relief to lower and middle-income individuals and families in Connecticut.

Statutes affected:
Raised Bill: 12-701