AN ACT ESTABLISHING A REFUNDABLE CREDIT AGAINST THE PERSONAL INCOME TAX FOR A PORTION OF ANNUAL RENT PAYMENTS MADE BY A TAXPAYER FOR A PRIMARY RESIDENCE IN THE STATE.

House of Representatives
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General Assembly File No. 663
February Session, 2026 Substitute House Bill No. 5114

House of Representatives, April 16, 2026

The Committee on Finance, Revenue and Bonding reported
through REP. HORN of the 64th Dist., Chairperson of the
Committee on the part of the House, that the substitute bill
ought to pass.

AN ACT ESTABLISHING A REFUNDABLE CREDIT AGAINST THE
PERSONAL INCOME TAX FOR A PORTION OF ANNUAL RENT
PAYMENTS MADE BY A TAXPAYER FOR A PRIMARY RESIDENCE IN
THE STATE.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:

Section 1. (NEW) (Effective January 1, 2027) (a) As used in this section: 1
(1) "Condominium" has the same meaning as provided in section 47-2
68a of the general statutes; 3
(2) "Common interest community" has the same meaning as provided 4
in section 47-202 of the general statutes; 5
(3) "Dwelling unit" has the same meaning as provided in section 47a-6
1 of the general statutes; 7
(4) "Eligible renter" means an individual (A) who rented and 8
occupied one or more dwelling units in the state for the entirety of the 9
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applicable taxable year as such individual's primary residence and paid 10
rent for such dwelling unit or units, (B) who was not claimed as a 11
dependent on another individual's federal income tax return for the 12
applicable taxable year, and (C) whose federal adjusted gross income 13
for the applicable taxable year does not exceed (i) seventy-five thousand 14
dollars for individuals who file a return under the federal income tax as 15
an unmarried individual, a married individual filing separately or a 16
head of household, or (ii) one hundred fifty thousand dollars for 17
individuals who file a return under the federal income tax as married 18
individuals filing jointly; 19
(5) "Hotel", "lodging" and "bed and breakfast establishment" have the 20
same meanings as provided in section 12-407 of the general statutes; 21
(6) "Mobile manufactured home" has the same meaning as provided 22
in section 12-63a of the general statutes; and 23
(7) "Short-term rental" has the same meaning as provided in section 24
12-408h of the general statutes. 25
(b) Any eligible renter who is subject to the tax imposed under 26
chapter 229 of the general statutes for any taxable year commencing on 27
or after January 1, 2027, shall be allowed a credit against the tax 28
otherwise due under chapter 229 of the general statutes, other than the 29
liability imposed by section 12-707 of the general statutes, in an amount 30
equal to twenty per cent of the eligible renter's annual rent actually paid 31
by the eligible renter for the applicable taxable year, minus four per cent 32
of the eligible renter's federal adjusted gross income for the applicable 33
taxable year, provided the amount of the credit for any taxable year shall 34
not exceed (1) for any eligible renter who files a return under the federal 35
income tax as an unmarried individual, a married individual filing 36
separately or a head of household, two thousand five hundred dollars, 37
and (2) f or any two eligible renters who file a return as married 38
individuals filing jointly, two thousand five hundred dollars jointly for 39
such two eligible renters. 40
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(c) (1) Each owner or managing agent, including the owner or 41
managing agent of a mobile manufactured home park, of any property 42
in the state that is occupied by a renter as a primary residence and for 43
which the renter pays rent, shall furnish a certificate of rent paid to each 44
such renter who is a renter on December thirty-first. The certificate shall 45
be in such form and manner as prescribed by the Commissioner of 46
Revenue Services and shall be provided to each renter before February 47
first of the year following the year in which the rent was paid. Each 48
eligible renter claiming the credit under this section shall file such 49
certificate with the eligible renter's state tax filing. 50
(2) If a renter moves before December thirty -first, the owner or 51
managing agent may furnish the certificate to the renter at the time of 52
moving or send the certificate by mail to a forwarding address, if 53
known, or by electronic mail if the renter provided an electronic mail 54
address to the owner or managing agent. 55
(3) Each owner or managing agent shall retain a duplicate of each 56
certificate, or an equivalent record that shows the information that was 57
included in each certificate, for a period of four years and shall make 58
such duplicate or record available to the commissioner upon request. 59
(4) If an eligible renter does not receive a certificate from the owner 60
or managing agent, the eligible renter may submit an affidavit that 61
includes the information that would be included in a certificate of rent 62
paid. The Department of Revenue Services shall develop a form for the 63
affidavit and post such form on the department's Internet web site. 64
(d) If the amount of the credit allowed pursuant to this section 65
exceeds the taxpayer's liability for the tax imposed under chapter 229 of 66
the general statutes, the Commissioner of Revenue Services shall treat 67
such excess as an overpayment and, except as provided under section 68
12-739 or 12-742 of the general statutes, shall refund the amount of such 69
excess, without interest, to the taxpayer. 70
(e) For the purposes of this section: 71
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(1) "Rent" includes (A) the amount of heat, hot water, gas, electricity, 72
furniture and parking, to the extent the landlord makes no separate 73
charge for such items, and (B) the rental of a mobile manufactured home 74
or of the leasehold site being occupied by the taxpayer's mobile 75
manufactured home, or both. 76
(2) "Rent" does not include (A) amounts paid as a security deposit or 77
amounts paid for the last month's rent upon entering into a rental or 78
lease agreement, unless such amounts are applied to unpaid rent, (B) 79
payments by a tenant-stockholder of a cooperative housing corporation 80
to such corporation, (C) payments by a tenant or an owner of a 81
condominium or a unit in a common interest community to the 82
respective unit owner association, (D) consideration paid for the 83
occupancy of a hotel, lodging house, bed and breakfast establishment or 84
short-term rental, unless such premises are occupied under a rental or 85
lease agreement, or (E) payment in kind by the tenant to the landlord. 86
(f) Commencing in the taxable year commencing January 1, 2028, and 87
annually thereafter, the Commissioner of Revenue Services shall submit 88
a report, in accordance with the provisions of section 11-4a of the general 89
statutes, to the joint standing committee of the General Assembly 90
having cognizance of matters relating to finance, revenue and bonding, 91
of the total amount of credits claimed under this section for the previous 92
taxable year and such other deidentified and disclosable information 93
that is requested by said committee concerning the credit allowed under 94
this section, to enable said committee to evaluate whether any changes 95
should be made to the income thresholds or credit amounts set forth in 96
this section. 97
(g) The commissioner may (1) coordinate with the Department of 98
Housing and other state agencies to promote public awareness of the 99
credit under this section, and (2) adopt regulations, in accordance with 100
the provisions of chapter 54 of the general statutes, to implement the 101
provisions of this section. 102
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This act shall take effect as follows and shall amend the following
sections:

Section 1 January 1, 2027 New section

FIN Joint Favorable Subst.

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The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of
the General Assembly, solely for purposes of information, summarization and explanation and do not
represent the intent of the General Assembly or either chamber thereof for any purpose. In general,
fiscal impacts are based upon a variety of informational sources, including the analyst’s professional
knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final
products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact:
Agency Affected Fund-Effect FY 27 $ FY 28 $
Department of Revenue Services GF - Revenue
Loss
None 575 million
Department of Revenue Services GF - Cost None Up to
150,000
Department of Revenue Services GF - Cost None 65,000
State Comptroller - Fringe
Benefits1
GF - Cost None 27,183
Note: GF=General Fund

Municipal Impact: None
Explanation
The bill, which establishes a refundable personal income tax credit
for rent paid of up to $2,500 for eligible filers, results in (1) a General
Fund revenue loss of approximately $575 million annually beginning in
FY 28, (2) a one -time cost to the Department of Revenue Services of up
to $150,000 in FY 28 associated with programming updates to the CTax
tax administration system and myconneCT online portal to establish the
refundable credit , form modification, and "certificate of rent paid"
development, and (3) an on -going cost of $92,183 for salary and fringe
costs for one Revenue Examiner beginning in FY 28.
The Out Years
The annualized ongoing fiscal impact identified above would

1The fringe benefit costs for most state employees are budgeted centrally in accounts
administered by the Comptroller. The estimated active employee fringe benefit cost
associated with most personnel changes is 41.82% of payroll in FY 27.
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continue into the future subject to inflation and the per-filer credit cap
of $2,500.
Sources: U.S. Census Bureau. "Financial Characteristics." American Community
Survey, ACS 1-Year Estimates Subject Tables, Table S2503

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OLR Bill Analysis
sHB 5114

AN ACT ESTABLISHING A REFUNDABLE CREDIT AGAINST THE
PERSONAL INCOME TAX FOR A PORTION OF ANNUAL RENT
PAYMENTS MADE BY A TAXPAYER FOR A PRIMARY RESIDENCE
IN THE STATE.

SUMMARY
Starting with the 2027 tax year, this bill creates a refundable personal
income tax credit of up to $2,500 for eligible renters with incomes of up
to $150,000 for joint filers or $75,000 for other filers. The credit amount
renters can claim is based on a portion of the eligible rent they paid for
the applicable tax year and their federal adjusted gross income (AGI).
The bill requires rental property owners or managers to give certain
renters a “certificate of rent paid” by February 1 of the year after the rent
was paid. It requires renters to file these certificates , or a specified
affidavit, when claiming the tax credit.
The bill authorizes the Department of Revenue Services (DRS)
commissioner to (1) adopt implementing regulations for the credit and
(2) coordinate with the housing department and other state agencies to
promote its public awareness. It also requires DRS to annually report to
the General Assembly on the credit.
EFFECTIVE DATE: January 1, 2027
CREDIT AMOUNT AND CLAIMS
Under the bill, t he credit equals 20% of the annual rent the eligible
renter actually paid for the applicable tax year , minus 4% of his or her
federal AGI for that year, up to $ 2,500. The $2,500 maximum applies
regardless of the renter’s tax filing status, meaning that two eligible
renters who file a joint return may claim a credit of up to $2,500 jointly.
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Renters may apply the credit against their personal income tax
liability, but not the withholding tax. The credit is refundable if it
exceeds their income tax liability.
ELIGIBLE RENTERS
To qualify for the credit, an “eligible renter” must:
1. have federal AGI for the applicable tax year of $75,000 or less (for
single filers, married people filing separately, or heads o f
households) or $150,000 or less (for joint filers);
2. have rented and occupied at least one dwelling unit in
Connecticut as his or her primary residence for all of the
applicable tax year and paid rent for the unit or units; and
3. not have been claimed as a dependent on someone else’s federal
income tax return for the year.
ELIGIBLE RENT PAYMENTS
Under the bill, credit-eligible rent payments also include amounts for
(1) heat, hot water, gas, electricity, furniture, and parking if the landlord
does not charge separately for these and (2) rent ing a mobile
manufactured home, the leasehold site it occupies, or both . But they
exclude the following:
1. amounts paid as a security deposit or for the last month’s rent
when entering into the rental or lease agreement, unless they are
applied to unpaid rent;
2. payments by a cooperative housing corporation’s tenant -
stockholder to the corporation;
3. payments by a condominium’s or common interest community
unit’s tenant or owner to the respective unit owner association;
4. consideration paid for occupancy in a hotel, lodging house, bed
and breakfast, or short -term rental, unless occupied under a
rental or lease agreement; and
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5. payments in kind by the tenant to the landlord.
CERTIFICATES OF RENT PAID
The bill requires certain property owners and managing agents to
give renters a “certificate of rent paid” that eligible renters must in turn
file with their income tax returns to claim the tax cred it. This
requirement applies to anyone who owns or manages a property in
Connecticut, including a mobile manufactured home park, occupied by
a renter as their primary residence on December 31 and for which the
renter pays rent. DRS must prescribe the certificate’s requirements.
Property owners or managing agents must provide these certificates
by February 1 of the year after the rent was paid. If a renter moves before
December 31, the owner or manager may (1) give the renter the
certificate at the time of moving, (2) send it by mail to any known
forwarding address, or (3) send it by email if the renter provided an
email address. If an owner or manager does not provide a certificate, the
eligible renter may submit an affidavit that includes the requisite
information. DRS must devel op a form for these affidavits and post it
on its website.
Property owners and managers must keep a duplicate of each
certificate (or an equivalent record of the information it included) for
four years and make it available to the DRS commissioner upon request.
REPORT TO THE LEGISLATURE
The bill requires the DRS commissioner, annually starting with the
2028 tax year, to report to the Finance, Revenue and Bonding Committee
on (1) the total amount of renter tax credits claimed for the prior tax year
and (2) any other information the committee requests about the credit
to help it evaluate whether any changes should be made to income
thresholds or credit amounts. The latter must include only information
that is de-identified and disclosable.
BACKGROUND
Related Bill
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SB 1, § 5, favorably reported by the Finance, Revenue and Bonding
Committee, creates a similar refundable income tax credit of up to $1,000
for eligible renters who have federal AGI of $100,000 or less for joint
filers or $50,000 or less for other filers.
COMMITTEE ACTION
Finance, Revenue and Bonding Committee
Joint Favorable Substitute
Yea 35 Nay 19 (03/30/2026)