Connecticut raises income tax deductions for married individuals under new bill

Connecticut's House Bill 7270 is making waves as it proposes significant changes to the state's tax structure, particularly targeting income deductions for residents. Introduced on April 3, 2025, the bill aims to adjust the federal adjusted gross income deductions for individuals and married couples, with a focus on easing the tax burden for lower and middle-income earners.

At the heart of House Bill 7270 is a tiered deduction system that offers a 100% deduction for individuals earning less than $75,000 and married couples earning less than $100,000. As income increases, the deduction percentage gradually decreases, reaching zero for individuals earning over $100,000 and couples over $150,000. This progressive approach is designed to provide relief to those who need it most, while still generating revenue from higher earners.

The bill has sparked notable debates among lawmakers, with proponents arguing that it will stimulate economic growth by putting more money back into the pockets of working families. Critics, however, express concerns about the potential long-term impact on state revenue and the fairness of the tiered system. Some lawmakers fear that the bill could disproportionately benefit higher-income individuals who may not need the deductions as much as lower-income families.

Economically, the implications of House Bill 7270 could be significant. By increasing disposable income for many residents, it may lead to higher consumer spending, which could boost local businesses. However, the state must balance this with the need to maintain essential services funded by tax revenues.

As the bill moves through the legislative process, experts are closely watching its progress. If passed, it could reshape Connecticut's tax landscape, potentially setting a precedent for similar measures in other states. The outcome remains uncertain, but the discussions surrounding House Bill 7270 highlight the ongoing debate over tax policy and economic equity in Connecticut.