Income Tax Filing Reminder and Savings For Taxpayers

With the passage of Federal CARES Act, the IRS is beginning to issue Economic Impact Payments to many Americans based on annual income. More information on eligibility is available here.

The IRS will use your income information from your 2019 tax return. If you have not yet filed your return, your 2018 filing will be used to determine eligibility.

As you know, the deadline to file state and federal income tax is now July 15 due to the COVID-19 pandemic. HOWEVER, it’s recommended that you file earlier than this, especially if your income has changed between 2018 and 2019.

SOCIAL SECURITY RECIPIENTS

If you are on Social Security and do not file a return, you will still receive a check if you fall within the necessary income thresholds. The IRS will use your Social Security benefits statements for income information.

If you do not file, no further action is needed unless you have dependents that are under 17 years old. If you wish to claim the $500 per child, you can enter this information in the new IRS portal: Non-Filers: Enter Your Payment Information Here. More information is available here.

TAX EXEMPTION REMINDER

A reminder that Connecticut has increased the thresholds of when a taxpayer can deduct 100% of their federally taxable Social Security income, thus extending this deduction to more taxpayers. 

The legislature set these thresholds as law three years ago (2017), and they took effect beginning in the 2019 tax year. The new thresholds are:

• $75,000 for single filers and married people filing separately;
• and $100,000 for joint filers and heads of household.

Filers at or above these thresholds qualify for a 75% deduction of Social Security income.

PENSION AND ANNUITY SAVINGS REMINDER

Under another law to promote tax savings passed in 2017, pension and annuities are gradually being phased out of taxable income over six years, beginning this past year in 2019. This savings is dependent on income thresholds:

• $75,000 for single filers, married people filing separately, and heads of households;
• and $100,000 for married people filing jointly.

Taxpayers with Adjusted Gross Income below these thresholds may deduct a percentage of their pension and annuity income when calculating their Connecticut Adjusted Gross Income. In 2025 and thereafter, there will be a 100% deduction for those within these thresholds.

In the past 2019 Legislative Session, Gov. Lamont proposed to remove these taxpayer savings measures. I have consistently fought for this tax relief in 2017, and fought against the Governor’s proposed savings rollbacks in 2019. I’ll continue to fight to preserve these savings for taxpayers if they are again threatened by the Governor.