Gov. Ned Lamont has announced tax cuts for 2024. His office said there will be a reduction in income tax rates beginning Jan. 1 and more than one million tax filers will benefit from these rate reductions.
Connecticut has a progressive income tax rate structure and the tax rate increases with income at varying rates as income grows in each bracket.
The governor’s office said the changes coming in 2024 will see a decrease in the two lowest rates:
- The 3% rate on the first $10,000 earned by single filers and the first $20,000 by joint filers will drop to 2%.
- The 5% rate on the next $40,000 earned by single filers and the next $80,000 by joint filers will drop to 4.5%.
The cut is targeted toward middle-class tax filers and is capped at $150,000 for single filers and $300,000 for joint filers, according to the governor’s office.
“Make life just a little more affordable for folks in this season,” Governor Lamont said.
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The state’s Earned Income Tax Credit for low-income workers will also be increasing. The governor’s office said the changes will affect around 211,000 low-income tax filers.
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The new rates will be available to recipients when they file their 2023 personal income tax returns in early 2024.
The governor said Connecticut’s new Earned Income Tax Credit is increasing from 30.5% to 40% of the federal EITC and this will provide an additional $44.6 million in state tax credits to around 211,000 low-income filers who receive the credit.
The governor's office also said exemptions on certain pension and annuity earnings will be expanding.
The governor’s office said the retirement income tax cliff will be eliminated by adding a phase-out for allowable pension and annuity and IRA distribution deductions against the personal income tax.
Lamont’s office said the changes could benefit an additional 100,000 tax filers.
“It's working,” State Comptroller Sean Scanlon said. "We just need to keep doing what we are doing and as a result, we are going to see more opportunities to give that relief to people and meet the needs of the moment.”
The governor's office said all three cuts will reduce taxes for Connecticut taxpayers by approximately $460.3 million.
