General Assembly Raised Bill No. 7269 seeks 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 the rent paid, with the definition of "rent" encompassing various utilities and services provided by landlords, while excluding security deposits and short-term rentals unless under a lease agreement. The deduction amounts vary according to the taxpayer's federal adjusted gross income, with maximum deductions set at $4,000, $2,800, and $1,600 for different income brackets. The bill also repeals and replaces subparagraph (B) of subdivision (20) of subsection (a) of section 12-701, integrating the new rent deduction provisions while preserving other existing income subtractions.

In addition to the rent deduction, the bill introduces changes to the taxation of Social Security benefits and pension or annuity income based on federal adjusted gross income thresholds. It allows individuals and couples with incomes below specified limits to exclude a greater portion of their Social Security benefits from taxable income. The bill also outlines a phased approach for pension and annuity income taxation, gradually increasing the percentage exempt from taxation for lower-income individuals. Furthermore, it includes provisions for tax deductions related to organ donation expenses, marijuana business expenses, student loan reimbursements, and contributions to ABLE accounts, while eliminating previous restrictions on these deductions. Overall, Raised Bill No. 7269 aims to provide tax relief and incentives for lower-income individuals and families in Connecticut.

Statutes affected:
Raised Bill: 12-701