What's New for 2018
Property Tax Credit Limitation
For taxable year 2017, in order to qualify for the property tax credit, you, or your spouse if married filing jointly, must be 65 years of age or older by the end of the taxable year, or you must have claimed at least one dependent on your federal income tax return. The maximum income tax credit for taxes paid to Connecticut municipalities remains at $200. The phase out thresholds for all filing statuses remain at the 2016 levels.
Earned Income Tax Credit
The earned income tax credit in effect for Connecticut residents for 2017 is 23 percent (23%) of the federal Earned Income Credit claimed and allowed on your federal income tax return.
Income Tax Exemption for Teacher Pensions
Effective for taxable years beginning in January 1, 2017, and January 1, 2018, in determining a taxpayer’s Connecticut Adjusted Gross Income (AGI), a taxpayer is allowed a subtraction modification of 25% of the income received from the Connecticut teacher’s retirement system. This modification applies to the extent such income is properly included in the taxpayer’s federal AGI for the taxable year.
Penalty Waiver Requests
There is a one year statute of limitations imposed on penalty waiver requests received on or after July 1, 2017. The Commissioner cannot consider a request received more than one year from the date a notice of such penalty was first sent to the taxpayer requesting the waiver. For the taxpayer who self reports the penalty on his or her tax return, the filing date of such return is considered the date on which the taxpayer was notified of such penalty. See Policy Statement 2018(3), Requests for Waiver of Civil Penalties.
If you are a paid tax preparer preparing any Connecticut personal income tax return(s), you are required to sign the return(s) and include your Preparer Tax Identification Number (PTIN) issued by the Internal Revenue Service. You are no longer allowed to use your Social Security Number. You must use your PTIN. If your PTIN is not used, a civil penalty of $500 may be imposed. See Special Notice 2017(8), New Requirements for Income Tax Preparers and Facilitators of Refund Anticipation Loans or Checks.
New Designated Charity
The Mental Health Community Investment Account, was added on Form CT-1040, Schedule 5, Contributions to Designated Charities. You may contribute all or a portion of your refund to this charity on Line 70h.