CT SB00904

Commissioner of Revenue Services must establish a first-time homebuyer savings account program allowing individuals to set up designated accounts with financial institutions to save for eligible costs (down payments and closing costs) for purchasing a primary residence in Connecticut.

Account holders may contribute unlimited amounts to accounts, with contributions held in cash and marketable securities, and any person may contribute to an account designated for a first-time homebuyer.

Allows account holders to withdraw funds penalty-free only for paying or reimbursing eligible costs; unauthorized withdrawals subject to civil penalty up to 10% of withdrawn amount, with exceptions for transfers between accounts, death/disability, or bankruptcy.

Establishes Connecticut income tax deduction of up to $5,000 per individual ($10,000 for married couples filing jointly) annually for contributions and accrued interest used exclusively for eligible costs, available for 10 taxable years per account.

Account holders must submit detailed account information, transaction lists, and IRS Form 1099 with annual tax returns; financial institutions not required to monitor account compliance or be liable for improper fund use unless required by law.