The proposed bill, General Assembly Proposed Bill No. 5018, aims to amend section 12-701 of the general statutes to establish a personal income tax deduction for certain payments received from insurance companies. Specifically, the bill allows taxpayers to deduct the portion of any payment received in exchange for a buyout or cancellation of a long-term care insurance policy, provided that this payment is also includable in gross income for federal income tax purposes.

This legislative change is intended to provide financial relief to taxpayers who receive such payments, thereby encouraging the use of long-term care insurance policies. The bill does not delete any existing legal language but introduces new provisions to enhance the tax benefits associated with long-term care insurance transactions.