AN ACT ESTABLISHING A PERSONAL INCOME TAX DEDUCTION FOR CERTAIN PAYMENTS RECEIVED FROM AN INSURANCE COMPANY.

Plain English Breakdown

Checked against official source text during the last sync.

Tax Deduction for Cancelled Long-Term Care Insurance Payments

This bill creates a state personal income tax deduction for payments received from an insurance company to cancel or buy out a long-term care policy, but only if those payments are included in federal gross income.

What This Bill Does

• Amends the general statutes to create a new personal income tax deduction.
• Allows taxpayers to deduct the portion of insurance payments received for cancelling or buying out a long-term care policy.
• Requires that the payment must be properly included in federal gross income.

Who It Names or Affects

• Taxpayers who receive payments from an insurance company specifically for cancelling or buying out a long-term care insurance policy and include those amounts in their federal taxable income.

Terms To Know

Personal income tax deduction

An amount subtracted from total earnings before calculating how much state tax is owed.

Buyout or cancellation

Ending a long-term care insurance policy early in exchange for a payment from the insurance company.

Limits and Unknowns

• The provided text does not state when this deduction will officially begin.
• The provided text does not specify if there is a maximum dollar limit on how much can be deducted.

Official Summary Text

To establish a personal income tax deduction for the portion of any payment from an insurance company received by a taxpayer (1) in exchange for a buyout or cancellation of a long-term care insurance policy, and (2) that is properly includable in gross income for federal income tax purposes.

Current Bill Text

LCO No. 135 1 of 1

General Assembly Proposed Bill No. 5018
February Session, 2026 LCO No. 135

Referred to Committee on FINANCE, REVENUE AND
BONDING

Introduced by:
REP. TURCO, 27th Dist.
REP. DEMICCO, 21st Dist.

AN ACT ESTABLISHING A PERSONAL INCOME TAX DEDUCTION
FOR CERTAIN PAYMENTS RECEIVED FROM AN INSURANCE
COMPANY.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

That section 12-701 of the general statutes be amended to establish a 1
personal income tax deduction for the portion of any payment from an 2
insurance company received by a taxpayer (1) in exchange for a buyout 3
or cancellation of a long -term care insurance policy, and (2) that is 4
properly includable in gross income for federal income tax purposes. 5
Statement of Purpose:
To establish a personal income tax deduction for the portion of any
payment from an insurance company received by a taxpayer (1) in
exchange for a buyout or cancellation of a long -term care insurance
policy, and (2) that is properly includable in gross income for federal
income tax purposes.