Raised Bill No. 5489 Summary

• Establishes annual inflation indexing of Connecticut personal income tax brackets and thresholds beginning January 1, 2023, using the chained consumer price index for all urban consumers calculated on an August-over-August basis.

• Adjusts income tax brackets for unmarried individuals, heads of household, married couples filing jointly, and married individuals filing separately by the percentage increase in inflation, rounded to the nearest dollar, effective for taxable years starting January 1, 2023.

• Indexes personal exemption amounts ($12,000-$24,000 depending on filing status) and their corresponding income thresholds for inflation beginning January 1, 2023, with annual adjustments continuing each year.

• Requires the adjusted gross income thresholds that trigger exemption reductions to also be adjusted annually by the inflation percentage for taxable years commencing on or after January 1, 2024.

• Takes effect upon passage and amends Connecticut General Statutes sections 12-700(a)(9)-(10) and 12-702 to implement the inflation-adjustment mechanism.