“This state’s tax policies are making retirees flee the state,” said O’Dea. “The personal income tax Connecticut places on Social Security is one significant reason why. There are 26 states that don’t tax Social Security, and our retirees are heading to them so they can have retirement where they can make ends meet. We need to stop penalizing the people who have made our state what it is.
"This bill will begin the process of reversing policies that have sent many seniors packing once they enter their retirement years. I am very pleased that the Aging Committee has lent its bipartisan support to this legislation.”
Under Connecticut’s current tax laws state residents that earn Social Security benefits and make over $50,000 per year if single, and $60,000 if married, are currently taxed for 25 percent of their total receipts.
O’Dea cited a Gallup Poll from last spring that concluded that 49 percent of state residents want to leave the state giving Connecticut’s high taxes as the primary reason. He said it is no coincidence that U. S. Census estimates show Connecticut ranking as one of only six states that has lost population over the past two fiscal years.
It is estimated that the state takes in $21 million per year from taxing Social Security benefits, and O’Dea said the revenue could easily be made up though the elimination of redundant and inefficient government services, and a reduction in middle management.
The bill, HB 5236, An Act Exempting Social Security Benefits from State Income Tax, was approved unanimously by a vote of the Aging Committee on March 5 and will head to the House of Representatives for action there.
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