CT SB01020

Establishes first-time homebuyer savings accounts allowing individuals to deposit unlimited cash funds exclusively for paying down payments and closing costs on Connecticut single-family residences, effective January 1, 2024

Permits one or more account holders to establish accounts with financial institutions, designate qualified beneficiaries by April 15 following account establishment, and transfer funds between accounts without penalty

Imposes a 10% civil penalty on non-qualified withdrawals, unless funds are redeposited to another homebuyer savings account, withdrawn due to death or disability, used in bankruptcy proceedings, or not claimed as a deduction

Creates a Connecticut income tax deduction for contributions to first-time homebuyer savings accounts, capped at $2,500 annually for single filers and $5,000 for joint filers with federal adjusted gross income under specified thresholds ($100,000/$200,000), starting for taxable year 2025

Allows qualified beneficiaries to deduct all withdrawals used for eligible costs (down payments and closing costs) from Connecticut taxable income, plus accrued interest deductions, for taxable years beginning January 1, 2025 and thereafter