More than a million Connecticut tax filers can expect a reduction in their state income tax rates in the new year. The largest income tax reduction was approved by lawmakers in the state budget passed in June.
The budget contained the first income tax reduction since the mid-1990s. Gov. Ned Lamont said it helps the state stay competitive with its neighbors, who helped broker the bipartisan budget deal and signed it into law.
“When it comes to income tax compared to New York, New Jersey, Massachusetts we are very well positioned. People recognize that. We have tens of thousands of families moving into the state of Connecticut from those states, in particular. And what a difference that makes,” Lamont said.
“This is going to represent a 10% cut for people earning a hundred to a hundred and fifty thousand dollars. A bigger benefit for those working families thanks to the earned income tax credit,” he added.
The income tax reductions lower the 5% rate to 4.5%. Those paying at the 3% rate would be lowered to 2%. It would affect about 1.1 million tax filers.
Another 200,000 filers would benefit from an increase in the earned income tax credit.
And 100,000 more seniors would benefit from an expansion on the exemptions on certain pension and annuity earnings.
