Property Tax Credit LimitationThe property tax credit eligibility requirements and amount remain the same for taxable year 2019. To qualify for the property tax credit, you, or your spouse if married filing jointly, must be 65 years of age or older by the end of the taxable year, or you must have claimed at least one dependent on your federal income tax return. The maximum property tax credit amount remains at $200. The phase‑out thresholds for all filing statuses remain at the 2018 levels.
Income Tax Exemption for Teachers’ Pensions
For the taxable year 2019, a taxpayer is allowed a subtraction modification of 25% of the income received from the Teachers’ Retirement System when calculating Connecticut Adjusted Gross Income (AGI). This modification applies only to the extent that such income has been properly included in federal AGI for the taxable year.
Underpayment interest: Prior to June 26, 2019, the subtraction modification for income received from the Teachers’ Retirement System was scheduled to increase to 50%. On June 26, 2019, the scheduled increase was postponed to taxable year 2021. However, you will not be charged underpayment (2210) interest for the underpayment of estimated tax due April 15, 2019, and June 15, 2019, if in calculating your estimated payments for the first two quarters of 2019, you relied on the 50% scheduled increase.
Definition of “Residential Building” Expanded for Purposes of the Crumbling Foundation Subtraction Modification
Current law allows a taxpayer to subtract the amount of any financial assistance received from the Crumbling Foundations Assistance Fund, or paid to or on behalf of the owner of a residential building, to repair concrete foundations that have deteriorated due to the presence of pyrrhotite.
Effective July 1, 2019, the definition of “residential building” was expanded to include (1) a single family or multifamily residential dwelling, including, but not limited to (A) a residential unit in a condominium, as defined in Conn. Gen. Stat. § 47‑68a, and (B) a unit that is used for residential purposes and located in a common interest community, as defined in Conn. Gen. Stat. § 47‑202, and (2) a building containing one or more of the residential dwellings previously described under (1)(A) or (B).
Angel Investor Tax Credit
For taxable years beginning on or after January 1, 2019, the total amount of tax credit allowed to an angel investor is $500,000. The total amount of Angel Investor Tax Credit that Connecticut Innovations, Inc. (CII) may reserve in each fiscal year is five million dollars.
When reserving certain credits, CII may give priority to veteran‑owned, women‑owned or minority‑owned businesses and businesses owned by individuals with disabilities.
The angel investor tax credit program is extended to July 1, 2024. CII cannot reserve angel investor tax credits after June 30, 2024.
Increase of Thresholds for Determining the Amount of Social Security Benefits Exempt From Connecticut Income Tax
For taxable years beginning on or after January 1, 2019, the adjusted gross income thresholds for determining the amount of Social Security benefits excluded from Connecticut income tax are revised as follows:
|Federal Filing Status||Federal AGI (Form CT-1040, Line 1)||Subtraction Modification|
|Single or Married Filing Separately||Less than $75,000||100% of the Social Security benefits included in federal AGI.|
|$75,000 or more||The amount of Social Security benefits calculated in the Social Security Benefit Adjustment Worksheet found on Page 11.|
|Married Filing Jointly, Qualifying Widow(er), or Head of Household||Less than $100,000||100% of the Social Security benefits included in federal AGI.|
|$100,000 or more||The amount of Social Security benefits calculated in the Social Security Benefit Adjustment Worksheet found on Page 11.|
Subtraction Modification of Pension and Annuity Income
Pursuant to Section 641 of June Spec. Sess. Public Act 17‑2, for the taxable year beginning on January 1, 2019, an individual with a federal filing status of single, married filing separately or head of household, with federal AGI for the taxable year of less than $75,000, or married filing jointly with federal AGI of less than $100,000 will be allowed to subtract 14% of any pension or annuity income received for the taxable year when calculating Connecticut AGI. This subtraction modification only applies to the extent that the pension or annuity income has already been properly included in federal AGI.
For purposes of calculating the amount of the subtraction modification to report on the Connecticut income tax return (Line 48b, on Schedule 1 of the 2019 Form CT‑1040), the term “pension and annuity income” means the pension and annuity income reported on Line 4d of the 2019 federal Form 1040 or Form 1040‑SR, reduced by any military retirement pay and any Tier 1 and Tier 2 railroad retirement benefits. The amounts reported on Line 4d of the federal income tax return are the taxable distributions from retirement plans, including the following:
- Defined benefit plans;
- 401(k), 403(b) and governmental 457(b) plans;
- Military retirement pay; and
- Tier 1 and Tier 2 railroad retirement benefits.
Taxpayers must reduce the amount reported on Line 4d of the federal income tax return by the amount of any military retirement pay and any Tier 1 and Tier 2 railroad retirement benefits. This is required because Connecticut already allows a separate subtraction modification for military retirement pay (Line 44, Schedule 1, Form CT‑1040), and for Tier 1 and Tier 2 railroad retirement benefits or supplemental annuities (Line 43, Schedule 1, Form CT‑1040).
The following amounts are not included in Line 4d of the federal income tax return and should not be added when calculating the pension and annuity amount for Line 48b of Form CT‑1040:
- Disability pensions received before the recipient met the minimum retirement age set by his or her employer;
- Corrective distributions of excess elective deferrals or other excess contributions to retirement plans; and
- Distributions from traditional IRAs, Roth IRAs, simplified employee pension (SEP) IRAs, and savings incentive match plans for employees (SIMPLE) IRAs.
A survivor or beneficiary of a plan participant may claim the 14% subtraction modification for Connecticut income tax purposes in the same manner as the plan participant would have been allowed to claim the modification, if such survivor or beneficiary is required to report the pension and annuity income on the federal income tax return in the same manner as the plan participant would have reported such income.
Individuals receiving income from the Teachers’ Retirement System: Taxpayers may not claim the 25% Teachers’ Retirement System income subtraction modification and the 14% pension and annuity income subtraction modification for the same income. However, if a taxpayer filing an individual return or a joint return has income from the Teachers’ Retirement System and income from a pension or annuity that qualifies for the pension or annuity subtraction modification, then the taxpayer may claim both modifications.