The proposed General Assembly Raised Bill No. 7272 seeks to reform Connecticut's personal income tax system by introducing several key changes, including the indexing of tax thresholds and personal exemption amounts, the establishment of a child tax credit, and revisions to the withholding and deduction of personal income tax from certain payments. Notably, the bill repeals subdivisions (10) and (11) of subsection (a) of section 12-700 of the general statutes, replacing them with a new tax rate schedule that will take effect on January 1, 2024, and will be further adjusted for taxable years beginning on or after January 1, 2026. The bill outlines specific tax rates for various filing statuses and introduces additional fees for taxpayers with higher adjusted gross incomes (AGI), aiming to create a more equitable tax structure.

Additionally, the bill mandates annual adjustments to personal exemption amounts and income thresholds based on inflation starting January 1, 2026, and defines "increase in inflation" in accordance with the chained consumer price index. The personal exemption amounts are set at $19,000 for individual taxpayers and $24,000 for married couples filing jointly, with reductions based on AGI exceeding specified thresholds. Furthermore, the bill introduces a child tax credit of $150 per dependent child for eligible taxpayers, effective July 1, 2025, and revises withholding requirements for employers and payers of certain distributions. Overall, Raised Bill No. 7272 aims to enhance the fairness of the tax system while providing relief to families with children and ensuring that tax provisions remain responsive to economic changes.

Statutes affected:
Raised Bill: 12-702