SB 237 — AN ACT ESTABLISHING A PERSONAL INCOME TAX DEDUCTION FOR MILITARY FUNERAL HONOR GUARD DETAIL COMPENSATION.

Senate General Assembly RaisedFile Bill No.

237159 February Session, 2024 LCOSenate Bill No.

1514237 ReferredSenate, toMarch 28, 2024 The Committee on VETERANS'Veterans' ANDand MILITARYMilitary AFFAIRSAffairs Introducedreported by:through SEN.

(VA)MARX ANof ACTthe ESTABLISHING20th ADist., PERSONALChairperson INCOMEof TAXthe DEDUCTIONCommittee FORon MILITARYthe FUNERALpart HONORof GUARDthe DETAILSenate, COMPENSATION.that the bill ought to pass.

AN ACT ESTABLISHING A PERSONAL INCOME TAX DEDUCTION FOR MILITARY FUNERAL HONOR GUARD DETAIL COMPENSATION.

(iii) To the extent properly includable in gross income for federal income tax purposes, the amount of any refund or credit for LCOSB237 1514/ \\PRDFS1\SCOUSERS\FORZANOF\WS\2024SB-00237-R1File of 12 SB.docx Bill No.

237159 overpayment1 ofSB237 incomeFile taxesNo. imposed by this state, or any other state of the United States or a political subdivision thereof, or the District of Columbia;

159 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;

(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 LCOadjusted 1514gross {\\PRDFS1\SCOUSERS\FORZANOF\WS\2024SB-0022income ofand 12is R01-SB.docxattributable }to Billa trade or business carried SB237 / File No.

237159 adjusted2 grossSB237 incomeFile andNo. is attributable to a trade or business carried on by such individual;

159 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 LCOthousand 1514dollars {\\PRDFS1\SCOUSERS\FORZANOF\WS\2024SB-00237-3or ofmore 12or R01-SB.docxfor }a Billperson who files a return under the SB237 / File No.

237159 thousand3 dollarsSB237 orFile moreNo. 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 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;

159 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 asamarriedindividualfilingasamarriedindividual filing 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 LCOdifference 1514between {\\PRDFS1\SCOUSERS\FORZANOF\WS\2024SB-002374the amount of 12Social R01-SB.docxSecurity }benefits Billincludable for federal income tax purposes and the lesser of twenty-five per cent of the SB237 / File No.

237159 difference4 betweenSB237 theFile amountNo. 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;

159 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 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 LCOForces 1514of {\\PRDFS1\SCOUSERS\FORZANOF\WS\2024SB-0025the United States, as defined in Section 101 of 12Title R01-SB.docx10 }of Billthe United States Code, or (II) the National Guard, as defined in Section 101 SB237 / File No.

237159 Forces5 ofSB237 theFile UnitedNo. 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;

159 of Title 10 of the United States Code;

(xx) To the extent properly includable in gross income for federal income tax purposes, except for retirement benefits under clause (iv) of LCOthis 1514subparagraph {\\PRDFS1\SCOUSERS\FORZANOF\WS\2024SB-0026and retirement pay under clause (xvi) of 12this R01-SB.docxsubparagraph, }for Billa person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for SB237 / File No.

237159 this6 subparagraphSB237 andFile retirementNo. pay under clause (xvi) 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 years commencing January 1, 2022, and January 1, 2023, one hundred per cent of any pension or annuity income;

159 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 years commencing January 1, 2022, and January 1, 2023, one hundred per cent of any pension or annuity income;

T1 Federal Adjusted Gross Income Deduction T2 Less than $75,000 100.0% LCOT3 1514$75,000 {\\PRDFS1\SCOUSERS\FORZANOF\WS\2024SB-00237but ofnot 12over R01-SB.docx$77,499 }85.0% BillT4 $77,500 but not over $79,999 70.0% T5 $80,000 but not over $82,499 55.0% T6 $82,500 but not over $84,999 40.0% SB237 / File No.

237159 T37 $75,000SB237 butFile notNo. over $77,499 85.0% T4 $77,500 but not over $79,999 70.0% T5 $80,000 but not over $82,499 55.0% T6 $82,500 but not over $84,999 40.0% T7 $85,000 but not over $87,499 25.0% T8 $87,500 but not over $89,999 10.0% T9 $90,000 but not over $94,999 5.0% T10 $95,000 but not over $99,999 2.5% T11 $100,000 and over 0.0% (xxii) 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 (xvi) of this subparagraph, any pension or annuity income for the taxable year commencing on or after January 1, 2024, and each taxable year thereafter, in accordance with the following schedule for married individuals 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 fifty thousand dollars:

T12159 FederalT7 Adjusted$85,000 Grossbut Incomenot Deductionover T13$87,499 Less25.0% thanT8 $100,000$87,500 100.0% T14 $100,000 but not over $104,999$89,999 85.0%10.0% T15T9 $105,000$90,000 but not over $109,999$94,999 70.0%5.0% T16T10 $110,000$95,000 but not over $114,999$99,999 55.0%2.5% T17T11 $115,000$100,000 butand not over $119,9990.0% 40.0%(xxii) T18To $120,000the butextent notproperly overincludable $124,999in 25.0%gross T19income $125,000for butfederal notincome overtax $129,999purposes, 10.0%except T20for $130,000retirement butbenefits notunder overclause $139,999(iv) 5.0%of T21this $140,000subparagraph butand notretirement overpay $149,999under 2.5%clause T22(xvi) $150,000of andthis oversubparagraph, 0.0%any (xxiii)pension Theor amountannuity ofincome lostfor wagesthe andtaxable medical,year travelcommencing andon housingor expenses,after notJanuary to1, exceed2024, tenand thousandeach dollarstaxable year thereafter, in theaccordance aggregate,with incurredthe byfollowing aschedule taxpayerfor duringmarried theindividuals taxablewho yearfile ina connectionreturn withunder the donationfederal toincome anothertax personas ofmarried anindividuals organfiling forjointly organwhose transplantationfederal occurringadjusted ongross orincome LCOfor 1514such {\\PRDFS1\SCOUSERS\FORZANOF\WS\2024SB-00238taxable ofyear 12is R01-SB.docxless }than Billone No.hundred fifty thousand dollars:

237T12 Federal Adjusted Gross Income Deduction T13 Less than $100,000 100.0% T14 $100,000 but not over $104,999 85.0% T15 $105,000 but not over $109,999 70.0% T16 $110,000 but not over $114,999 55.0% T17 $115,000 but not over $119,999 40.0% T18 $120,000 but not over $124,999 25.0% T19 $125,000 but not over $129,999 10.0% T20 $130,000 but not over $139,999 5.0% T21 $140,000 but not over $149,999 2.5% T22 $150,000 and over 0.0% (xxiii) The amount of lost wages and medical, travel and housing expenses, not to exceed ten thousand dollars in the aggregate, incurred by a taxpayer during the taxable year in connection with the donation to another person of an organ for organ transplantation occurring on or after January 1, 2017;

(xxiv) 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 behalfSB237 of/ theFile ownerNo. of a residential building pursuant to sections 8-442 and 8-443;

159 8 SB237 File No.

159 behalf of the owner of a residential building pursuant to sections 8-442 and 8-443;

LCO(xxviii) 1514To {\\PRDFS1\SCOUSERS\FORZANOF\WS\2024SB-0029the ofextent 12properly R01-SB.docxincludable }in Billgross 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 one hundred thousand dollars, or asamarriedindividualfiling separately whosefederaladjustedgross income for such taxable year is less than one hundred thousand dollars, SB237 / File No.

237159 (xxviii)9 ToSB237 theFile extentNo. 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 one hundred thousand dollars, or asamarriedindividualfiling separately whosefederaladjustedgross income for such taxable year is less than one hundred thousand dollars, or as a head of household whose federal adjusted gross income for such taxableyearislessthan onehundredthousanddollars,(I)forthetaxable year commencing January 1, 2024, fifty per cent of any distribution from an individual retirement account other than a Roth individual retirementaccount,(II)forthetaxableyearcommencingJanuary1,2025, seventy-five per cent of any distribution from an individual retirement account other than a Roth individual retirement account, and (III) 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.

159 or as a head of household whose federal adjusted gross income for such taxableyearislessthan onehundredthousanddollars,(I)forthetaxable year commencing January 1, 2024, fifty per cent of any distribution from an individual retirement account other than a Roth individual retirementaccount,(II)forthetaxableyearcommencingJanuary1,2025, seventy-five per cent of any distribution from an individual retirement account other than a Roth individual retirement account, and (III) 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.

T23 Federal Adjusted Gross Income Deduction T24 Less than $75,000 100.0% T25 $75,000 but not over $77,499 85.0% T26 $77,500 but not over $79,999 70.0% T27 $80,000 but not over $82,499 55.0% T28 $82,500 but not over $84,999 40.0% T29 $85,000 but not over $87,499 25.0% T30 $87,500 but not over $89,999 10.0% T31 $90,000 but not over $94,999 5.0% T32 $95,000 but not over $99,999 2.5% T33 $100,000 and over 0.0% (xxix) To the extent properly includable in gross income for federal income tax purposes, for married individuals 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 fifty thousand dollars, (I) for the taxable year commencing LCOJanuary 15141, {\\PRDFS1\SCOUSERS\FORZANOF\WS\2024SB-002102024, fifty per cent of 12any R01-SB.docxdistribution }from Billan individual retirement account other than a Roth individual retirement account, (II) 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 (III) for the taxable year commencing January 1, 2026, and each taxable year thereafter, any distribution from an individual retirement account other than a Roth SB237 / File No.

237159 January10 1,SB237 2024,File fiftyNo. 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, 2025, seventy-five per cent of any distribution from an individual retirement account other than a Roth individual retirement account, and (III) 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.

159 individual retirement account.

(xxxi) For the taxable year commencing January 1, 2023, and each taxable year thereafter, for a taxpayer licensed under the provisions of chapter 420f or 420h, the amount of ordinary and necessary expenses LCOthat 1514would {\\PRDFS1\SCOUSERS\FORZANOF\WS\2024SB-00211be eligible to be claimed as a deduction for federal income tax purposes under Section 162(a) of 12the R01-SB.docxInternal }Revenue BillCode No.but that are disallowed under Section 280E of the Internal Revenue Code because marijuana is a controlled substance under the federal Controlled Substance Act;

237(xxxii) thatTo wouldthe beextent eligibleproperly toincludable bein claimedgross asincome a deduction for federal income tax purposespurposes, underfor Section 162(a) of the Internaltaxable Revenueyear Codecommencing buton thator areafter disallowedSB237 under/ SectionFile 280ENo. of the Internal Revenue Code because marijuana is a controlled substance under the federal Controlled Substance Act;

(xxxii)159 To11 theSB237 extentFile properlyNo. includable in gross income for federal income tax purposes, for the taxable year commencing on or after January 1, 2025, and each taxable year thereafter, any common stock received by the taxpayer during the taxable year under a share plan, as defined in section 12-217ss;

159 January 1, 2025, and each taxable year thereafter, any common stock received by the taxpayer during the taxable year under a share plan, as defined in section 12-217ss;