CT HB06876

Establishes first-time homebuyer savings accounts effective January 1, 2026, allowing individuals to save for down payments and closing costs on one-to-four family residences in Connecticut, with accounts held at banks or credit unions and containing only cash with no contribution limits

Provides a state income tax deduction of up to $2,500 annually for single filers (or $5,000 for joint filers) for contributions to these accounts, plus a deduction for all interest earned, available to individuals with adjusted gross income under $100,000 ($200,000 for joint filers)

Grants employers a tax credit equal to 10% of contributions made to employees' first-time homebuyer savings accounts, capped at $2,500 per account holder per year, with employers prohibited from seeking reimbursement if the employee leaves

Imposes a 10% civil penalty on withdrawals used for purposes other than eligible homebuying costs, with exceptions for death, disability, bankruptcy, or transfers to another first-time homebuyer savings account

Exempts from state income tax any withdrawals used by the qualified beneficiary to pay or reimburse eligible costs for purchasing a primary residence in Connecticut