Raised Bill No. 7272 proposes comprehensive reforms to Connecticut's personal income tax system, including the introduction of a child tax credit, adjustments to personal exemption amounts, and the indexing of tax thresholds to inflation. The bill repeals subdivisions (10) and (11) of subsection (a) of section 12-700, replacing them with a new tax rate schedule effective from January 1, 2024, which features a progressive tax structure with rates ranging from 2.0% to 6.99% based on income brackets. Additionally, it establishes new provisions for taxpayers with adjusted gross income (AGI) exceeding certain thresholds, imposing additional fees for higher earners and adjusting personal exemptions based on AGI.

The bill also mandates annual adjustments to personal exemption amounts and income thresholds for inflation starting January 1, 2026, ensuring that these figures remain relevant over time. It introduces a child tax credit of $150 per dependent child for eligible taxpayers, effective July 1, 2025, with a gradual reduction based on income levels. Furthermore, the bill modifies withholding requirements for employers, allowing for more flexible withholding rates on taxable distributions. Overall, Raised Bill No. 7272 aims to create a more equitable tax structure that reflects economic changes and provides relief to families through the proposed child tax credit.

Statutes affected:
Raised Bill: 12-702