O’Dea Proposes Elimination of Tax on Social Security & Pensions
HARTFORD –State Representative Tom O’Dea (R-125) has introduced legislation this session that would exempt Social Security and pension benefits from the state income tax. Those state residents that earn Social Security benefits and make over $50,000 per year if single, and $60,000 if married, are currently taxed for 25% of their total receipts.
“You can point to a number of policies that have resulted in Connecticut routinely ranking among the states least desirable to retire in,” said Rep. O’Dea. “Our taxation of pensions and Social Security benefits certainly contributes materially to making retirement in Connecticut difficult. We should be making it easier for those who have worked here their whole lives and raised their families here to be able to retire here in comfort. Right now, we are penalizing people for trying to remain in Connecticut when they retire, and that needs to change.”
O’Dea noted that a Gallup Poll from last spring concluded that 49% of state residents want to leave the state and that Connecticut’s high taxes were cited as the primary reason. He said U. S. Census estimates show people are voting with their feet, with Connecticut ranking as one of only six states that has lost population over the past two fiscal years.
It is estimated that the state takes in roughly $21 million per year from taxing Social Security benefits, and O’Dea said the revenue could easily be made up though the elimination of redundant and inefficient government services, and a reduction in middle management.
O’Dea’s proposed bill, HB 5156, An Act Phasing Out the Personal Income Tax on Pensions and Social Security Income, has been referred to the Joint Committee on Finance, Revenue and Bonding and they await action there.
This session of the Connecticut General Assembly convened on January 7th, and will conclude at midnight, Wednesday, June 3rd, 2015.