In 2017 the state legislature enacted legislation to give tax breaks to people receiving pension and annuity income — under $75,000 for singles and $100,000 for married couples. This began phasing in on January 1, 2019 and will eliminate income tax on those amounts in 2025.

Where did this leave all of the hard-working citizens of Connecticut who don’t have a pension plan and are forced to save for retirement on their own in a 401K or IRA? Forgotten once again, so that their taxes can subsidize the gold-plated benefits of state employees (the main recipient of pensions in the state).

Thankfully, someone in the legislature has noticed and taken action. Rep. Devin Carney of the 23rd district has introduced Proposed
Bill No. 5060, which will amend the tax law to give equal treatment to retirees deriving their income from IRAs and 401Ks. Equal treatment under the law is guaranteed by the 14th Amendment and as a principal every American should support.

I call on our legislature to enact this bill as soon as possible and make retirement fair for all Connecticut residents.

James Miller lives in Lyme. 

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5 Comments

  1. Thank you Mr. Miller for drawing attention to Bill 5060. It’s important that this gets passed for the reasons you state. Saving for retirement with IRAs/401Ks is difficult enough – does not have the assurance of a pension for example (consider the current state of equities). Passing this will also help retirees stay in CT.

    1. There’s are glaring inequities in the Connecticut tax system. While the rich dislike paying 6.99% state income tax on their taxable income, (with the politicians protecting them from paying more), most Connecticut households pay way more than 6.99% of income to the property tax & car tax, even with more than 1 income stream coming into the household. The average Connecticut household doesn’t get the tax-free income stream that the rich enjoy. On the flip side, the rich pays about 1%, of income, to the property tax, while an average income household pays 3% to 4% in state income tax. As for the sales tax, gross receipt taxes, and all other consumer taxes and fees, the rich pays under 1% of income while the average income household pays 3% of income. A single person with a modest $51,000 of income is already in the 5.25% state income tax bracket, while secretly being taxed at 10.4% as approaching $40,000 of income where the tax credits are being clawed back. By the way, Connecticut is neck to neck with New York in being the national champion in income inequity.

      1. Hi Michael, we welcome your comments but please note that our guidelines require that comments be limited to 1,000 characters. This is truly a thoughtful comment and we are glad to post it, but we will not be able to approve comments that exceed that limit going forward.

      2. Please note that this provision only applies to income below $75,000 for an in individual and $100,000 for a couple.

        Also the study about total tax burden assumes that tenants pay 100% of a landlord’s property tax, without any evidence backing up that critical assumption behind the findings.

  2. I now winter in Florida and there are a lot of retirees from CT who were teachers, state and municipal workers. Often they are able to retire years and years before full Social security full retirement age. And those CT earned pensions are not taxed because they are now FL residents.

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