What Budget Deficit? Lembo Wants $40 Million Tax Exemption for Social Security.
More from State Comptroller Kevin Lembo’s 2017 policy/campaign document. The second term Democrat wants to exempt Social Security income from the state’s income tax. Preparing to run for governor will concentrate a fella’s attention on Connecticut’s “out migration.” There’s a cleaner, more effective way to do this: lower rates for all, no matter their age. Working people of all ages could also use a break from Connecticut’s dispiriting tax burden. Why increase their burden?
Here’s an extract from the Lembo document:
Connecticut is seen as unfriendly to retirees. The state has net out migration of over 5,000 residents ages 65 and older. It also ranks poorly on rankings of best state to retire (42nd by Bankrate, 39th Money Magazine). Currently, only 13 states tax social security benefits, including Connecticut which contributes to the state’s poor ranking and perception as a place for retirees to reside.
Connecticut Social Security Income Tax Deduction – Connecticut law allows taxpayers to deduct either 75% or 100% of federally taxable Social Security benefits, depending on income (100% if federal AGI is less than $50,000 – single/ $60,000married filing jointly or a head of household; otherwise 75% deduction of federally taxable benefits (CGS § 12-701(20)(B)(x)).
Exempt all Social Security payments from the state income tax regardless federal tax treatment or the AGI of the tax payer. Some estimates have put the cost of expanding the Social Security exemption to all Social Security income at $40million annually.