Here’s a quick summary of the tax code updates that may affect your 2019 Connecticut tax return.
New for 2019
Pass-Through Entity Tax Modified
Retroactively beginning January 1, 2019, the pass-through entity tax credit percentage decreased from 2018’s level of 93.01%. An owner of a pass-through entity is now entitled to a credit equal to 87.5% of their share of the entity’s tax liability.
Income Tax Exemption for Teachers’ Pensions
For 2019, a taxpayer is allowed a subtraction modification of 25% of the income received from the Teachers’ Retirement System with calculating CT AGI, to the extent such income has been included in federal AGI for the taxable year. This was scheduled to increase to 50% on June 26, 2019 but has been postponed until 2021. Underpayment interest will not be charged for the first two quarters of 2019 if estimating was done assuming the 50% increase.
Subtraction Modification of Pension and Annuity Income
Beginning on January 1, 2019, an individual with a federal filing status of single, married filing separately or head of household, with federal AGI for the taxable year of less than $75,000, or married filing jointly with federal AGI of less than $100,000 will be allowed to subtract 14% of any pension or annuity income received for the taxable year when calculating Connecticut AGI. This subtraction modification only applies to the extent that the pension or annuity income has already been properly included in federal AGI.
Taxpayers may not claim the 25% Teachers’ Retirement System income subtraction modification and the 14% pension and annuity income subtraction modification for the same income. However, if a taxpayer filing an individual return or a joint return has income from the Teachers’ Retirement System and income from a pension or annuity that qualifies for the pension or annuity subtraction modification, then the taxpayer may claim both modifications.
Definition of “Residential Building” Expanded for Crumbling Foundation Subtraction Modification
Effective July 1, 2019, the definition of “residential building” was expanded to include 1) a single family or multifamily residential dwelling including but not limited to A) a residential unit in a condominium and B) a unit used for residential purposes and located in a common interest community, and 2) buildings containing one or more of the residential previously described in 1)A) and 1)B).
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.
Schedule early. Our calendar fills up fast as people begin to receive their W-2s. Take the stress out of filing by calling us as soon as you have your documents together. Leave yourself time before the April 15th deadline to catch and sort out any issues that arise. By filing earlier, you get your refund faster or have more time to pay what you owe and help protect any refund from identity thieves.