O’Dea: Exclude senior income from income tax

State Rep. Tom O’Dea’s (R-125) office announced Tuesday, Jan. 13, he has introduced legislation that would exempt Social Security and pension benefits from the state income tax. Those state residents who earn Social Security benefits and make more than $50,000 per year if single, and $60,000 if married, are currently taxed for 25% of their total receipts.

“You can point to a number of policies that have resulted in Connecticut routinely ranking among the states least desirable to retire in,” Mr. O’Dea said in a press release.  “Our taxation of pensions and Social Security benefits certainly contributes materially to making retirement in Connecticut difficult. We should be making it easier for those who have worked here their whole lives and raised their families here to be able to retire here in comfort. Right now, we are penalizing people for trying to remain in Connecticut when they retire, and that needs to change.”

Mr. O’Dea pointed to a 2014 Gallup Poll that indicated Connecticut’s high taxes were a primary reason 49% of state residents said they wanted to leave the state. He added  Connecticut is one of only six states that has lost population over the past two fiscal years, according to U.S. Census estimates.

Mr. O’Dea said the state could easily make up the approximately $21 million per year it gets from taxing Social Security benefits by eliminating “redundant and inefficient government services, and a reduction in middle management.”

The proposed bill, H.B. 5156, An Act Phasing Out the Personal Income Tax on Pensions and Social Security Income, has been referred to the Joint Committee on Finance, Revenue and Bonding.

The legislative session convened Jan. 7, and will end June 3.