Here’s a quick summary of the tax code updates that may affect your 2017 Connecticut tax return.
Property Tax Credit Limited
The tax credit for CT residents who made qualifying property tax payments has been limited for 2017. To qualify for the property tax credit this year, you or your spouse must have been 65 by December 31, 2017 or you must have claimed at least one dependent on your federal return. The maximum income tax credit for taxes paid to Connecticut municipalities remains at $200, and the income thresholds for phase out remain the same as 2016. The credit is non-refundable.
Earned Income Tax Credit Lowered
The earned income tax credit for Connecticut residents for 2017 has been reduced to 23% of the federal Earned Income Credit allowed and claimed on your federal income tax return. You may not claim the credit if your investment income is greater than $3,450.
Income Tax Exemption for Teacher Pensions Reduced
The tax-exempt portion of income from the Connecticut teacher’s retirement system has changed from 50% to 25%, retroactive to January 1, 2017. This modification applies to income included in the taxpayer’s federal Adjusted Gross Income (AGI). Anyone receiving these payments should review their withholding.
New for 2017
Crumbling Foundations Subtraction Modification Created
In determining their Connecticut AGI, a taxpayer is allowed a subtraction modification for financial assistance from the Crumbling Foundations Assistance Fund, the Collapsing Foundations Credit Enhancements Program, or qualifying assistance from a municipality to repair deteriorated concrete foundations.
Subtraction Modification Created for Organ Donation Expenses
In determining their Connecticut AGI, a taxpayer is allowed a subtraction modification of up to $10,000 for certain costs incurred relating to an organ donation.
New Designated Charity Added
The Mental Health Community Investment Account has been added to the list of designated charities to which you may direct all or a portion of your refund.
Other Items to Note
Need a Copy of Your Previous Return?
You can obtain a copy of your past CT individual and business tax returns for free using the CT Taxpayer Service Center.
CT DRS Begins Accepting Returns January 22, 2018
Schedule early. Our calendar fills up fast as people begin to receive their W-2s. Take the stress out of filing by scheduling as soon as you have your documents together. Leave yourself time before the April 17th deadline to catch and sort out any issues that arise. By scheduling with us and filing earlier, you get your refund faster or have more time to pay what you owe, and help protect any refund from identity thieves.