New England States Ponder Tax Breaks for Pensions
Proposals in New England neighbors Connecticut and Rhode Island would give their respective residents breaks from state taxes imposed on their pensions. Bills have been introduced in the legislatures of both states that would provide different degrees of relief: some would phase in a tax break; others would give a break to pension and Social Security benefits; and still others would target the relief for veterans’ pensions.
The Connecticut Joint Committee on Finance, Revenue and Bonding will have its hands full, with multiple bills before it that would phase out or repeal the personal income tax imposed on pension income.
And if any of the bills on tax treatment of military pensions before The Joint Committee on Veterans Affairs are enacted, Connecticut would join 13 other states that do not tax veterans’ pension income. The Connecticut Post reports that the committee held a hearing on the matter on Feb. 17.
The legislature in neighboring Rhode Island also is considering tax breaks for retirement income. According to The Boston Globe, multiple bills have been introduced that would give a break from state income taxes to pensions, Social Security and other forms of retirement income, but legislators question whether the state can afford the revenue that would be lost if such a repeal is enacted.