The proposed bill establishes a refundable personal income tax credit for eligible renters in Connecticut, effective January 1, 2027. Eligible renters are defined as individuals who occupy a dwelling unit as their primary residence, are not claimed as dependents, and whose federal adjusted gross income does not exceed $75,000 for single filers or $150,000 for joint filers. The credit is calculated as 20% of the annual rent paid, minus 4% of the renter's federal adjusted gross income, with a maximum credit of $2,500 for both individual and joint filers. To claim the credit, renters must obtain a "certificate of rent paid" from their landlords or property managers, which must be submitted with their tax filings.

The bill also mandates that property owners maintain records of these certificates for four years and outlines specific eligibility criteria for renters, including income limits and primary residency requirements. The Department of Revenue Services (DRS) is responsible for implementing regulations for the credit, promoting public awareness, and reporting annually to the General Assembly on the credit's usage. Additionally, the bill allows renters to submit affidavits if they do not receive the required certificates. The fiscal impact is significant, with an estimated annual revenue loss of approximately $575 million starting in FY 28, alongside initial costs for implementing the necessary administrative changes.