Good legislative news! Connecticut has a budget. As of this writing, the Legislature and the Governor have made no changes in the Teacher Pension Tax Exclusion Law of 10% exclusion in 2015, 25% exclusion in 2016, and 50% exclusion in 2017. ARTC lobbying efforts and member response to ARTC’s “Urgent Action” request made a difference in Hartford. Reminding Legislators that the Tax Exclusion Law addresses an unfair taxation on retired teachers and explaining why it was an economically sound move made a difference. ARTC thanks the Legislators and the Governor for their understanding and support.
The link below will take you to Connecticut’s 2016 Income Tax information
On page 2 under the heading “What’s New” you will find the following paragraph:
Income Tax Exemption for Teacher Pensions
For taxable years beginning on or after January 1, 2016, as long as you properly include it in gross income for federal income tax purposes, when determining your Connecticut adjusted gross income, you are allowed a subtraction modification from federal adjusted gross income of 25% of pension payments received from the Connecticut teacher’s retirement system.
For taxable year beginning January 1, 2017, and each taxable year thereafter, the subtraction modification will be 50%.