Gov. Ned Lamont unveiled first legislative proposal of the year, which includes restoring Connecticut’s pass-through entity tax credit to its original, revenue-neutral level of 93.01%.
During a press conference in Hartford, Lamont said the restoration of the pass-through entity tax credit could impact as many as 123,000 businesses by saving them as much as $60 million a year collectively. The tax credit is designed to help small business owners avoid federal deduction limits. Connecticut was the first state to implement this mechanism in 2018, which was later reduced by roughly 5%.
Lamont also pledged to introduce a proposal enabling small business owners to claim a larger credit on their personal returns. The proposals will be included in the governor’s fiscal years 2024 and 2025 budget proposal, which will be presented to the Connecticut General Assembly in February.
“It’s been a renaissance for small business over the last couple of years,” Lamont said. “We got to keep that going. These changes we are proposing will help small businesses in Connecticut save money, which they can use to reinvest back into their establishments to support their continued growth and the development of new jobs.”