Senator Kelly, Representative Perillo Advance Bill Exempting Social Security and Pension from Income Tax

February 1, 2013

Hartford – State Senator Kevin C. Kelly (R-21) and State Representative Jason Perillo (R-113) have introduced legislation this session which would exempt income from pensions and Social Security from the personal income tax up to $50,000 for individual filers and $100,000 for joint filers.

“Connecticut seniors deserve to keep more of their hard-earned income,” said Senator Kelly. “I am proud to support this smart legislation that will help seniors improve their standard of living and afford to remain in their homes. Our state must do more to support its aging population, and this proposal is one concrete step that we can take toward accomplishing that goal today.”

“When someone spends their entire life building up a decent pension and paying into the Social Security System, they shouldn’t have to worry about the government taking a cut when it’s time for them to be paid what they are owed,” said Rep. Perillo. “Connecticut has been rated as the absolute worst state in the U.S. to retire in by, mostly due to our high cost of living and utilities, and high taxes. By exempting pensions and Social Security from the personal income tax, we make it more likely that people can retire in Connecticut, the same state in which they grew up, worked, and raised their families, and where everyone they know and love is close by.”

Most states in the U.S. exclude Social Security retirement benefits from state income taxes, with twenty-seven states and the District of Columbia having full exemption. Only Connecticut, Minnesota, Nebraska, North Dakota and Rhode Island tax Social Security income to the same extent it is federally taxed, according to the National Conference of State Legislatures.

Ten states currently exclude federal state and local pensions from their state income tax, though some only exempt those from within their state. The bill advanced by Sen. Kelly and Rep. Perillo would make the state a leader in the nation in this area.

The bill is currently before the legislature’s Finance Revenue and Bonding Committee. This session of the Connecticut General Assembly is scheduled to adjourn on June 5th, 2013.