May 16, 2022 - Connecticut 2022-2023 Budget Includes $600 Million in Tax Cuts
By: Marc T. Finer
On May 9, 2022, Governor Ned Lamont signed the 2022-2023 Connecticut budget which includes approximately $600 million in tax relief. The following are some of the highlights of this tax relief:
- The 25-cents-per-gallon retail fuel tax that was previously suspended from April 1 – June 30, 2022 will continue to be suspended through November 2022.
- A new one year $250-per-child credit against the Connecticut personal income tax will be available for single filers earning less than $100,000 and married filers earning less than $200,000. The maximum credit is $750 (up to three children).
- The local property tax credit against the personal income tax is increased from $200 to $300. In addition, the availability of the credit has been expanded to include all single filers and married filers with annual income of no more than $109,500 and $130,500, respectively. Prior to this expansion, the credit was available only to individuals over age 65 and individuals with at least one dependent.
- The cap on municipal taxes on passenger vehicles has been reduced from 45 mills to 32.46 mills. The municipalities affected by this change will be reimbursed for the lost revenue.
- Connecticut’s earned income tax credit is increased from 30.5% to 41.5% of the federal credit starting in 2023.
- Pension and annuity income is completely exempt from Connecticut personal income tax starting in the year 2022 (rather than 2025) for single filers with annual income of less than $75,000 and married filers with annual income of less than $100,000.
- A personal income tax exemption for distributions from individual retirement accounts (other than Roth individual retirement accounts) will be phased in at 25% per year starting in the year 2023. Like the pension and annuity income exemption, the income limits for this exemption are $75,000/$100,000.
- The 6% admissions tax on movie theater tickets is eliminated.