SB 261 — AN ACT CONCERNING A STATE INCOME TAX DEDUCTION FOR HOME CARE COSTS.

Senate General Assembly SubstituteFile Bill No.

261122 February Session, 2022 ANSubstitute ACTSenate CONCERNINGBill ANo. STATE INCOME TAX DEDUCTION FOR HOME CARE COSTS.

261 Senate, March 24, 2022 TheCommitteeonAgingreportedthroughSEN.MILLERofthe 27th Dist., Chairperson of the Committee on the part of the Senate, that the substitute bill ought to pass.

AN ACT CONCERNING A STATE INCOME TAX DEDUCTION FOR HOME CARE COSTS.

(iii) To the extent properly includable in gross income for federal income tax purposes, the amount of any refund or credit for overpaymentsSB261 of/ incomeFile taxesNo. imposed by this state, or any other state of the United States or a political subdivision thereof, or the District of Columbia;

(iv)122 To1 thesSB261 extentFile properly includable in gross income for federal LCO \\PRDFS1\SCOUSERS\FORZANOF\WS\2022SB-00261-R01 of 9 SB.docx Substitute Bill No.

261122 incomeoverpayment taxof purposesincome andtaxes notimposed otherwiseby subtractedthis fromstate, federalor adjustedany grossother incomestate pursuant to clause (x) of thisthe subparagraphUnited inStates computingor Connecticuta adjustedpolitical grosssubdivision income,thereof, anyor tierthe 1District railroadof retirementColumbia; benefits;

(iv) To the extent properly includable in gross income for federal income tax purposes and not otherwise subtracted from federal adjusted gross income pursuant to clause (x) of this subparagraph in computing Connecticut adjusted gross income, any tier 1 railroad retirement benefits;

(viii) Any interest on indebtedness incurred or continued to purchase or carry obligations or securities the interest on which is subject to tax under thischapter butexempt fromfederalincome tax,totheextentthat such interest on indebtedness is not deductible in determining federal adjusted gross income and is attributable to a trade or business carried onsSB261 by/ suchFile individual;No.

(ix)122 Ordinary2 andsSB261 necessaryFile expenses paid or incurred during the taxable year for the production or collection of income which is subject LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2022SB-00262 of 9 R01-SB.docx } Substitute Bill No.

261122 to taxation under this chapter but exempt from federal income tax, or the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such expenses and premiums are not deductible in determining federal adjusted gross income and are attributable to a trade or business carried on by such individual;

(ix) Ordinary and necessary expenses paid or incurred during the taxable year for the production or collection of income which is subject to taxation under this chapter but exempt from federal income tax, or the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such expenses and premiums are not deductible in determining federal adjusted gross income and are attributable to a trade or business carried on by such individual;

(II) For taxable years commencing prior to January 1, 2019, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or as a married individual filing separately whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income from such taxable year is sixty thousand dollars or more or for a person who files a return under the federalsSB261 income/ taxFile as a head of household whose federal adjusted gross income for such taxable year is sixty thousand dollars or more, an amount equal to the difference between the amount of Social Security LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2022SB-00261-3 of 9 R01-SB.docx } Substitute Bill No.

261122 benefits3 includablesSB261 forFile federalNo. income tax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code;

122 federal income tax as a head of household whose federal adjusted gross income for such taxable year is sixty thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code;

and (IV) For the taxable year commencing January 1, 2019, and each taxable year thereafter, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is seventy-five thousand dollars or more, or asamarriedindividualfiling separately whosefederaladjustedgross income for such taxable year is seventy-five thousand dollars or more, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income from such taxable year is one hundred thousand dollars or more or for a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is one hundred thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the SocialsSB261 Security/ benefitsFile received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2022SB-00261-4 of 9 R01-SB.docx } Substitute Bill No.

261122 Revenue4 Code;sSB261 File No.

122 Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code;

(xvii)sSB261 To/ theFile extent properly includable in gross income for federal LCO {\\PRDFS1\SCOUSERS\FORZANOF\WS\2022SB-00265 of 9 R01-SB.docx } Substitute Bill No.

261122 income5 taxsSB261 purposes,File anyNo. income received from the United States government as retirement pay for a retired member of (I) the Armed Forces of the United States, as defined in Section 101 of Title 10 of the United States Code, or (II) the National Guard, as defined in Section 101 of Title 10 of the United States Code;

122 (xvii) To the extent properly includable in gross income for federal income tax purposes, any income received from the United States government as retirement pay for a retired member of (I) the Armed Forces of the United States, as defined in Section 101 of Title 10 of the United States Code, or (II) the National Guard, as defined in Section 101 of Title 10 of the United States Code;

LCOsSB261 {\\PRDFS1\SCOUSERS\FORZANOF\WS\2022SB-00266/ ofFile 9 R01-SB.docx } Substitute Bill No.

261122 (xxi)6 TosSB261 theFile extentNo. properly includable in gross income for federal income tax purposes, except for retirement benefits under clause (iv) of this subparagraph and retirement pay under clause (xvii) of this subparagraph, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a head of household whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxableyearislessthanonehundredthousanddollars,(I)forthetaxable year commencing January 1, 2019, fourteen per cent of any pension or annuity income, (II) for the taxable year commencing January 1, 2020, twenty-eight per cent of any pension or annuity income, (III) for the taxable year commencing January 1, 2021, forty-two per cent of any pension or annuity income, (IV) for the taxable year commencing January 1, 2022, fifty-six per cent of any pension or annuity income, (V) for thetaxableyearcommencing January 1,2023,seventypercent ofany pension or annuity income, (VI) for the taxable year commencing January 1, 2024, eighty-four per cent of any pension or annuity income, and (VII) for the taxable year commencing January 1, 2025, and each taxable year thereafter, any pension or annuity income;

122 (xxi) To the extent properly includable in gross income for federal income tax purposes, except for retirement benefits under clause (iv) of this subparagraph and retirement pay under clause (xvii) of this subparagraph, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or as a head of household whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxableyearislessthanonehundredthousanddollars,(I)forthetaxable year commencing January 1, 2019, fourteen per cent of any pension or annuity income, (II) for the taxable year commencing January 1, 2020, twenty-eight per cent of any pension or annuity income, (III) for the taxable year commencing January 1, 2021, forty-two per cent of any pension or annuity income, (IV) for the taxable year commencing January 1, 2022, fifty-six per cent of any pension or annuity income, (V) for thetaxableyearcommencing January 1,2023,seventypercent ofany pension or annuity income, (VI) for the taxable year commencing January 1, 2024, eighty-four per cent of any pension or annuity income, and (VII) for the taxable year commencing January 1, 2025, and each taxable year thereafter, any pension or annuity income;

(xxiii) To the extent properly includable in gross income for federal income tax purposes, the amount of any financial assistance received from the Crumbling Foundations Assistance Fund or paid to or on behalf of the owner of a residential building pursuant to sections 8-442 LCOand {\\PRDFS1\SCOUSERS\FORZANOF\WS\2022SB-002678-443; of 9 R01-SB.docx } Substitute Bill No.

261sSB261 and/ 8-443;File No.

(xxiv)122 To7 thesSB261 extentFile properlyNo. includable in gross income for federal income tax purposes, the amount calculated pursuant to subsection (b) of section 12-704g for income received by a general partner of a venture capital fund, as defined in 17 CFR 275.203(l)-1, as amended from time to time;

122 (xxiv) To the extent properly includable in gross income for federal income tax purposes, the amount calculated pursuant to subsection (b) of section 12-704g for income received by a general partner of a venture capital fund, as defined in 17 CFR 275.203(l)-1, as amended from time to time;

[and] (xxvi) To the extent properly includable in gross income for federal income tax purposes, for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or asamarriedindividualfiling separately whosefederaladjustedgross income for such taxable year is less than seventy-five thousand dollars, or as a head of household whose federal adjusted gross income for such taxable year is less than seventy-five thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxableyearislessthanonehundredthousanddollars,(I)forthetaxable year commencing January 1, 2023, twenty-five per cent of any distribution from an individual retirement account other than a Roth individual retirement account, (II) for the taxable year commencing January 1, 2024, fifty per cent of any distribution from an individual retirement account other thanaRothindividualretirement account,(III) for the taxable year commencing January 1, 2025, seventy-five per cent of any distribution from an individual retirement account other than a Roth individual retirement account, and (IV) for the taxable year commencing January 1, 2026, and each taxable year thereafter, any distribution from an individual retirement account other than a Roth LCOindividual {\\PRDFS1\SCOUSERS\FORZANOF\WS\2022SB-00268retirement ofaccount; 9 R01-SB.docx } Substitute Bill No.

261[.] individualsSB261 retirement/ account;File No.

[.]122 (xxvii)8 TosSB261 theFile extentNo. not deductible in determining federal adjusted gross income, ordinary and necessary expenses paid or incurred by a taxpayer for the care of any person seventy years of age or older related by blood, adoption or marriage to the taxpayer during the taxable year in an amount not to exceed sixty thousand dollars for the cost of full- time home care, including, but not limited to, the cost of medical supplies, in-home services provided by a homemaker-companion agency,asdefined insection20-670,andhealthcareprovidedbyahome health agency, as defined in section 19a-490;

122 (xxvii) To the extent not deductible in determining federal adjusted gross income, ordinary and necessary expenses paid or incurred by a taxpayer for the care of any person seventy years of age or older related by blood, adoption or marriage to the taxpayer during the taxable year in an amount not to exceed sixty thousand dollars for the cost of full- time home care, including, but not limited to, the cost of medical supplies, in-home services provided by a homemaker-companion agency,asdefined insection20-670,andhealthcareprovidedbyahome health agency, as defined in section 19a-490;

LCOAGE {\\PRDFS1\SCOUSERS\FORZANOF\WS\2022SB-00261-9Joint ofFavorable 10Subst. R01-SB.docx } Substitute Bill No.

261-LCO AGEsSB261 Joint/ FavorableFile Subst.No.

-LCO122 LCO9 {\\PRDFS1\SCOUSERS\FORZANOF\WS\2022SB-00261-sSB261 10File ofNo. 10 R01-SB.docx }

122 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 23 $ FY 24 $ Department of Revenue Services GF - Revenue 20 million 21 million Loss Department of Revenue Services GF - Cost Less than 145,407 206,395 State Comptroller - Fringe GF - Cost 43,122 58,933 Benefits1 Note: