HB 6928 — AN ACT CONCERNING THE PERSONAL INCOME TAX TREATMENT OF CERTAIN STUDENT LOAN FORGIVENESS AMOUNTS.

House of Representatives General Assembly RaisedFile Bill No.

6928684 January Session, 2023 LCOHouse Bill No.

64396928 ReferredHouse toof Representatives, May 2, 2023 The Committee on FINANCE,Finance, REVENUERevenue ANDand BONDINGBonding Introducedreported by:through REP.

(FIN)HORN ANof ACTthe CONCERNING64th THEDist., PERSONALChairperson INCOMEof TAXthe TREATMENTCommittee OFon CERTAINthe STUDENTpart LOANof FORGIVENESSthe AMOUNTS.House, that the bill ought to pass.

AN ACT CONCERNING THE PERSONAL INCOME TAX TREATMENT OF CERTAIN STUDENT LOAN FORGIVENESS AMOUNTS.

(iii) To the extent properly includable in gross income for federal income tax purposes, the amount of any refund or credit for overpaymentHB6928 of/ incomeFile taxes imposed by this state, or any other state LCO 6439 \\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-06928-R011 of 9 HB.docx Bill No.

6928684 of1 theHB6928 UnitedFile StatesNo. or a political subdivision thereof, or the District of Columbia;

684 overpayment of income taxes imposed by this state, or any other state of the United States or a political subdivision thereof, or the District of Columbia;

(vii) To the extent properly includable in determining the net gain or losslossfromthesale fromorother thedispositionofcapital saleassetsfor orfederalincome other disposition of capital assets for federal income tax purposes, any gain from the sale or exchange of obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, in the income year such gain was recognized;

(viii) Any interest on indebtedness incurred or continued to purchase or carry obligations or securities the interest on which is subject to tax under thisthischapter chapterbutexempt butfromfederalincome exempttax,totheextentthat from federal income tax, to the extent that such interest on indebtedness is not deductible in determining federal adjusted gross income and is attributable to a LCOtrade 6439or {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-069282business ofcarried 9HB6928 R01-HB.docx/ }File Bill No.

6928684 trade2 orHB6928 businessFile carriedNo. on by such individual;

684 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 LCOfiles 6439a {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-069283return ofunder 9the R01-HB.docxHB6928 }/ BillFile No.

6928684 files3 aHB6928 returnFile underNo. the 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;

(III)684 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 less than seventy-five thousand dollars, or as a marriedhead individualof filinghousehold separately whose federal adjusted gross income for such taxable year is lesssixty than seventy-five thousand dollars,dollars or formore, aan husbandamount andequal wifeto whothe filedifference abetween return under the federalamount incomeof taxSocial asSecurity marriedbenefits individualsincludable filingfor jointly whose federal adjusted gross income fortax suchpurposes taxableand year is less than one hundred thousand dollars or a person who files a return under the federallesser incomeof taxtwenty-five asper acent head of householdthe whoseSocial federalSecurity adjustedbenefits grossreceived incomeduring forthe such taxable yearyear, isor lesstwenty-five thanper onecent hundredof thousand dollars, an amount equal to the Socialexcess Securitydescribed benefitsin includableSection for86(b)(1) federalof incomethe taxInternal purposes;Revenue Code;

and(III) (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 less than seventy-five thousand dollarsdollars, or more,asamarriedindividualfiling or as a married individual filing separately whosewhosefederaladjustedgross federal adjusted gross income for such taxable year is less than seventy-five thousand dollarsdollars, 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 fromfor such taxable year is less than 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 less than one hundred thousand dollarsdollars, oran LCOamount 6439equal {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-06928-4to ofthe 9Social R01-HB.docxSecurity }benefits Billincludable No.for federal income tax purposes;

6928and more,(IV) anFor amountthe equaltaxable toyear thecommencing differenceJanuary between1, 2019, and each taxable year thereafter, for a person who files a return under the amountfederal ofincome Socialtax Securityas benefitsan includableunmarried 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 purposesas andmarried 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 lesserfederal ofincome twenty-fivetax peras centa head of thehousehold Socialwhose Securityfederal benefitsadjusted receivedgross duringincome thefor such taxable year,year is one hundred thousand dollars or twenty-fivemore, peran centamount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the excesslesser describedof intwenty-five Sectionper 86(b)(1)cent of the InternalHB6928 Revenue/ Code;File No.

684 4 HB6928 File No.

684 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;

(xvi) To the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, as defined in section 3-123aa, interest, dividends or capital gains earned on contributions to accounts established for the designated beneficiary LCOpursuant 6439to {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-069285the ofConnecticut 9Homecare R01-HB.docxOption }Program Billfor No.the Elderly established by sections 3-123aa to 3-123ff, inclusive;

6928HB6928 pursuant/ toFile theNo. Connecticut Homecare Option Program for the Elderly established by sections 3-123aa to 3-123ff, inclusive;

(xvii)684 To5 theHB6928 extentFile properlyNo. 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;

(xviii)684 (xvii) To the extent properly includable in gross income for federal income tax purposespurposes, for the taxable year, any income received from the dischargeUnited ofStates indebtednessgovernment inas connectionretirement withpay anyfor reacquisition,a afterretired Decembermember 31,of 2008,(I) andthe beforeArmed JanuaryForces 1, 2011, of anthe applicableUnited debtStates, instrument or instruments, as those terms are defined in Section 108101 of theTitle Internal10 Revenue Code, as amended by Section 1231 of the AmericanUnited RecoveryStates andCode, Reinvestmentor Act(II) of 2009, to the extentNational anyGuard, suchas incomedefined wasin addedSection to101 federalof adjustedTitle gross10 income pursuant to subparagraph (A)(xi) of thisthe subdivisionUnited inStates computingCode; Connecticut adjusted gross income for a preceding taxable year;

(xviii) To the extent properly includable in gross income for federal income tax purposesfor thetaxableyear,any income fromthedischarge of indebtedness in connection with any reacquisition, after December 31, 2008, and before January 1, 2011, of an applicable debt instrument or instruments, as those terms are defined in Section 108 of the Internal Revenue Code, as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009, to the extent any such income was added to federal adjusted gross income pursuant to subparagraph (A)(xi) of this subdivision in computing Connecticut adjusted gross income for a preceding taxable year;

(xx) To the extent properly includable in gross income for federal income tax purposes, (I) for the taxable year commencing January 1, 2015, ten per cent of the income received from the state teachers' retirement system, (II) for the taxable years commencing January 1, 2016, to January 1, 2020, inclusive, twenty-five per cent of the income received from the state teachers' retirement system, and (III) for the taxable year commencing January 1, 2021, and each taxable year thereafter, fifty per cent of the income received from the state teachers' retirement system or, for a taxpayer whose federal adjusted gross income does not exceed the applicable threshold under clause (xxi) of LCOthis 6439subparagraph, {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-069286the percentage pursuant to said clause of 9the R01-HB.docxincome }received Billfrom No.the state teachers' retirement system, whichever deduction is greater;

6928HB6928 this/ subparagraph,File theNo. percentage pursuant to said clause of the income received from the state teachers' retirement system, whichever deduction is greater;

(xxi)684 To6 theHB6928 extentFile properlyNo. 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 taxable year is less than one hundred thousand dollars, (I) for the taxable 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, and (IV) for the taxable year commencing January 1, 2022, and each taxable year thereafter, one hundred per cent of any pension or annuity income;

684 (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, and (IV) for the taxable year commencing January 1, 2022, and each taxable year thereafter, one hundred per cent of any pension or annuity income;

LCO(xxiv) 6439To {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-06928-7the extent properly includable in gross income for federal income tax purposes, the amount calculated pursuant to subsection (b) of 9section R01-HB.docx12-704g }for Billincome received by a general partner of a venture HB6928 / File No.

6928684 (xxiv)7 ToHB6928 theFile extentNo. 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;

684 capital fund, as defined in 17 CFR 275.203(l)-1, as amended from time to time;

(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 asasamarriedindividualfiling a married individual filing separately whosewhosefederaladjustedgross 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 taxabletaxableyearislessthanonehundredthousanddollars,(I)forthetaxable year is less than one hundred thousand dollars, (I) for the taxable 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 thanthanaRothindividual a Roth individual retirement account,account,(III) (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 individual retirement account;

[and] LCO(xxvii) 6439To {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-069288the ofextent 9properly R01-HB.docxincludable }in Billgross income for federal income tax purposes, for the taxable year commencing January 1, 2022, the amount or amounts paid or otherwise credited to any eligible HB6928 / File No.

6928684 (xxvii)8 ToHB6928 theFile extentNo. properly includable in gross income for federal income tax purposes, for the taxable year commencing January 1, 2022, the amount or amounts paid or otherwise credited to any eligible resident of this state under (I) the 2020 Earned Income Tax Credit enhancement program from funding allocated to the state through the Coronavirus Relief Fund established under the Coronavirus Aid, Relief, and Economic Security Act, P.L.

684 resident of this state under (I) the 2020 Earned Income Tax Credit enhancement program from funding allocated to the state through the Coronavirus Relief Fund established under the Coronavirus Aid, Relief, and Economic Security Act, P.L.

Section 1 January 1, 2024, and Section 1 12-701(a)(20)(B) applicable to taxable years commencing on or after January 1, 2024 FIN Joint Favorable LCOHB6928 6439/ {\\PRDFS1\HCOUSERS\BARRYJN\WS\2023HB-06928-File 9No. of 9 R01-HB.docx }

684 9 HB6928 File No.

684 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.