This story is part of CT Mirror Explains, an ongoing effort to distill our wide-ranging reporting into a "what you need to know" format and provide practical information to our readers.

Gov. Ned Lamont wants to give a $500 million tax rebate to roughly 2.2 million people this fall. Here’s how to find out if you would share in this giveback.

“Unlike many other states, which are facing federal cuts or a deficit of their own, Connecticut is stepping up to protect our most vulnerable, and we are trying to make life a little less expensive for working families and the middle class, who are getting slammed by higher costs,” Lamont said in his budget address to lawmakers earlier this month.

How would CT government fund this ‘rebate’?

In the context of government finances, a “rebate” typically involves a one-time return of collected dollars to taxpayers, usually from a specific source.

Lamont, in this case, wants to take $500 million from the sales tax, the state’s second-largest revenue source, which analysts say will generate $5.3 billion for the General Fund this fiscal year and $5.4 billion in 2026-27.

Still, a $500 million draw, by itself, would be a huge cut to state finances. For example, $500 million would fund two years’ worth of special education grants to local school districts.

To ensure state finances remain in balance, Lamont would replenish the General Fund for the sales tax receipts it would forfeit to the rebate program by tapping $500 million from this fiscal year’s $1.9 billion projected surplus. Those leftover dollars normally are used to reduce Connecticut’s hefty pension debt and to build emergency budget reserves.

Who would get money back, and how much?

Any full-time Connecticut residents who filed a state income tax return for the 2024, which typically would have been done in 2025, are eligible for a refund, provided their earnings don’t exceed certain limits.

Single filers whose income did not exceed $200,000 would be eligible for $200.

Joint filers whose income did not exceed $400,000 would receive $400.

And head of household filers whose earnings did not top $320,000 would get $320.

Anyone who filed a Connecticut income tax return claiming to be a part-time resident as defined by state law would not be eligible for a rebate.

Eligibility is not conditional upon having paid income taxes for 2024, only having filed a return. In other words, many working households have a portion of their earnings withheld to cover Connecticut income taxes but end up owing nothing because they earned too little — usually less than $35,000 per year.

When would the rebate arrive, and must people apply?

The governor’s proposal stipulates “the Department of Revenue Services will send out [rebate] checks no later than Oct. 31, 2026.” The timing of the Democratic governor’s proposal has drawn some criticism from Connecticut Republicans, who note checks could go out only a few days before voters decide this Nov. 3 whether to reelect Lamont to a third term.

Those eligible for the giveback don’t have to apply. Revenue services officials would rely on 2024 income tax returns records to identify those who would receive the funding. The Lamont administration says using this approach, rather than a broad-based application process, will speed up the delivery or rebates and ensure that the greatest number of eligible households receive them.

The administration also estimates that approximately 2.2 million Connecticut taxpayers would receive rebates.

Lamont’s proposal faces plenty of competition

The General Assembly now must consider the governor’s rebate plan and likely will decide its fate before the regular 2026 legislative session ends May 6.

But there are several competing ideas that could block the rebate from happening. And these involve providing tax relief year after year, not just one time.

Many majority Democrats in the House and Senate favor a new child tax credit within the state income tax for low- and middle-income families. This could provide up to $600 per child with a maximum of $1,800 per household.

House Republicans want to provide $500 million in ongoing relief by expanding the state income tax credit that offsets a portion of municipal property tax bills for middle class households.

And Senate Republicans last week unveiled an ongoing plan to provide $1.5 billion in ongoing relief by cutting income tax rates, expanding the property tax credit a reducing Connecticut’s payroll tax by one-fifth.