The General Assembly Raised Bill No. 1558 proposes amendments to the income tax credits available to residents of Connecticut who are subject to income taxes imposed by other states or jurisdictions. Specifically, it allows residents and part-year residents to claim a credit against their Connecticut income tax for taxes paid to other states, with the new provision that the credit will be reduced by 0.01 for income derived from services rendered while the taxpayer was in Connecticut. Additionally, the bill clarifies that the credit applies to both resident and part-year resident trusts and estates. The bill also includes a provision that prevents the tax due from being reduced below what would have been owed if the income taxed by the other jurisdiction were excluded from Connecticut adjusted gross income.

Furthermore, the bill mandates that the Attorney General conduct a study on how to protect Connecticut residents from taxes imposed by other jurisdictions on income earned while in Connecticut, with a report due by January 1, 2026. It also introduces a new credit for residents who have been denied a refund from another state for taxes paid on income earned while in Connecticut, provided they have taken specific steps to appeal the denial. Lastly, the bill ensures that no penalties or interest will be imposed on late payments of Connecticut taxes if the delay is due to a reduction in the credit resulting from a refund from another state.