Raised Bill No. 7272 proposes comprehensive reforms to Connecticut's personal income tax system, focusing on indexing tax thresholds and personal exemption amounts to inflation, as well as introducing a child tax credit. The bill repeals subdivisions (10) and (11) of subsection (a) of section 12-700 and replaces them with a new tax rate schedule effective from January 1, 2024, with further adjustments starting January 1, 2026. The new tax brackets are structured to ensure that higher earners contribute more, with specific rates for different filing statuses, including unmarried individuals, heads of households, and married couples filing jointly. Additionally, the bill establishes a mechanism for annual adjustments to personal exemption amounts and income thresholds based on inflation, ensuring that these figures remain relevant over time.

The bill also introduces a child tax credit of $150 per dependent child for eligible taxpayers, effective July 1, 2025, with a gradual reduction based on federal adjusted gross income thresholds. Furthermore, it modifies withholding requirements for employers, allowing individuals to request specific withholding rates from taxable distributions. The language in the bill emphasizes the importance of inflation adjustments and clarifies filing requirements for married couples. Overall, Raised Bill No. 7272 aims to create a more equitable tax structure that reflects economic conditions while providing tax relief through the child tax credit and streamlined withholding processes.

Statutes affected:
Raised Bill: 12-702