Bill > HB07272

This bill makes several key changes to Connecticut's personal income tax system, focusing on three main areas. First, it introduces an annual inflation adjustment for personal income tax brackets and thresholds starting in 2026, which means tax brackets and income levels at which different tax rates apply will automatically increase each year based on the chained consumer price index, helping to prevent "bracket creep" where taxpayers are pushed into higher tax brackets due to inflation. Second, the bill establishes a new child tax credit for eligible taxpayers with dependent children under 17 years old, providing a credit of $150 per child (up to three children) that phases out for higher-income taxpayers, with the credit being fully refundable if it exceeds the taxpayer's tax liability. Third, the bill modifies withholding rules for certain types of income distributions, allowing individuals to request withholding at a rate between zero and 100% or in a specific dollar amount, and adjusting the definition and treatment of "lump sum distributions" for tax withholding purposes. These changes aim to provide more flexible tax withholding options, protect taxpayers from inflation-driven tax increases, and offer financial support to families with children.

Budget and Finance

Finance, Revenue and Bonding Committee (J)

https://www.cga.ct.gov/asp/cgabillstatus/cgabillstatus.asp?selBillType=Bill&bill_num=HB07272&which_year=2025