HB 5722 — AN ACT ALLOWING A PERSONAL INCOME TAX DEDUCTION FOR STIPENDS PAID TO VOLUNTEER FIREFIGHTERS AND VOLUNTEER AMBULANCE MEMBERS.

House of Representatives General Assembly FileSubstitute Bill No.

3785722 January Session, 2021 SubstituteAN HouseACT BillALLOWING No.A PERSONAL INCOME TAX DEDUCTION FOR STIPENDS PAID TO VOLUNTEER FIREFIGHTERS AND VOLUNTEER AMBULANCE MEMBERS.

5722 House of Representatives, April 12, 2021 The Committee on Public Safety and Security reported through REP.

HORN of the 64th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

AN ACT ALLOWING A PERSONAL INCOME TAX DEDUCTION FOR STIPENDS PAID TO VOLUNTEER FIREFIGHTERS AND VOLUNTEER AMBULANCE MEMBERS.

(iii) To the extent properly includable in gross income for federal sHB5722income /tax Filepurposes, No.the amount of any refund or credit for 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;

378LCO 1\\PRDFS1\HCOUSERS\BARRYJN\WS\2021HB-05722-R031 sHB5722of File8 HB.docx Substitute Bill No.

3785722 income(iv) taxTo purposes, the amountextent ofproperly anyincludable refundin orgross creditincome for overpaymentfederal of income taxestax imposedpurposes byand thisnot state,otherwise orsubtracted anyfrom otherfederal stateadjusted gross income pursuant to clause (x) of thethis Unitedsubparagraph Statesin orcomputing aConnecticut politicaladjusted subdivisiongross thereof,income, orany thetier District1 ofrailroad Columbia;retirement 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;

(vii) To the extent properly includable in determining the net gain or lossfromthesale ororother other dispositionofcapital assetsfor federalincome 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 thischapter butexempt fromfederalincome tax,totheextentthat such interest on indebtedness is not deductible in determining federal sHB5722adjusted /gross Fileincome No.and is attributable to a trade or business carried on by such individual;

378(ix) 2Ordinary sHB5722and Filenecessary expenses paid or incurred during the LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2021HB-057222 of 8 R03-HB.docx } Substitute Bill No.

3785722 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 isare 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 sHB5722thousand /dollars Fileor 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 sixty thousand dollars or more, an LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2021HB-05722- 3 of 8 R03-HB.docx } Substitute Bill No.

3785722 3amount sHB5722equal Fileto No.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;

378 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 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 sHB5722federal /income Filetax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2021HB-05722- 4 of 8 R03-HB.docx } Substitute Bill No.

3785722 4per sHB5722cent Fileof No.the excess described in Section 86(b)(1) of the Internal Revenue Code;

378 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;

(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 pursuant to the Connecticut Homecare Option Program for the Elderly established by sHB5722sections /3-123aa Fileto No.3-123ff, inclusive;

378LCO 5{\\PRDFS1\HCOUSERS\BARRYJN\WS\2021HB-057225 sHB5722of File8 R03-HB.docx } Substitute Bill No.

3785722 sections(xvii) 3-123aaTo tothe 3-123ff,extent inclusive;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;

(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;

(xxi) To the extent properly includable in gross income for federal sHB5722income /tax Filepurposes, except for retirement benefits under clause (iv) of LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2021HB-057226 of 8 R03-HB.docx } Substitute Bill No.

3785722 6this sHB5722subparagraph Fileand No.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;

378 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;

sHB5722(xxiv) /To Filethe extent properly includable in gross income for federal LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2021HB-057227 of 8 R03-HB.docx } Substitute Bill No.

3785722 7income sHB5722tax Filepurposes, No.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;

378 (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, any qualified payment, as defined in Section 139B of the Internal Revenue Code, not to exceed nine hundred dollars in the aggregate.

sHB5722FIN /Joint FileFavorable No.LCO {\\PRDFS1\HCOUSERS\BARRYJN\WS\2021HB-05722- 8 of 8 R03-HB.docx }

378 8 sHB5722 File No.

378 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 22 $ FY 23 $ Revenue Serv., Dept.

GF - Revenue None 175,000 Loss Note:

GF=General Fund Municipal Impact: