HARTFORD- State Rep. Cara Pavalock (R-Bristol) announced that a plan she voted for that exempts Social Security pension benefits from the state income tax has passed a key legislative hurdle by winning support in the Aging Committee.
Currently, a press release from Pavalock’s office explained, a taxpayer can deduct 100 percent of his/ her Social Security benefits if an individual’s federal-Annual Gross Income is less than $50,000 or $60,000 for couples. If federal AGI equals or exceeds the threshold, the maximum deduction is 75 percent of their Social Security benefits.
The legislation, HB-5236, An Act Exempting Social Security Benefits from State Income Tax is aimed at helping Connecticut compete against other low tax states by making it a more attractive place to retire, said Pavalock’s news release.
Currently, said the Republican’s press release, 27 states exempt all Social Security income from state income tax. Approximately, the release said, $21 million a year is collected by the state from taxing Connecticut residents’ Social Security income.
“I continue to hear from my constituents, many of whom were born and raised in Connecticut, that they cannot afford to retire here because of the expensive cost of living and high taxes. It is unfortunate because this state is rich with history, culture and New England charm. With its central location, people are only a simple drive away from New York City or Boston, the countryside, or the shoreline. Connecticut could be a great place for people to retire but the harsh reality is that with the current tax structure, residents have no choice but to leave the state. It is my hope that the legislature takes this step in the right direction,” said Pavalock in the press release.
In 2012, Pavalock’s press release said, Connecticut was given “the awful distinction of being ranked as the worst state in the country for retirement due to its high taxation.” In her news release, Pavalock also referenced a poll conducted by Gallup in 2014 that showed 49 percent of state residents wanting to leave Connecticut citing high taxes.
The bill is waiting further debate by the legislature.