Gov. Ned Lamont proposed restoring the pass-through entity tax credit for small business owners in Connecticut to its original level of 93.01%.
He stated the change will help support growth and job development for small businesses. The credit allows for avoiding the state tax deduction limitation under former President Trump’s administration.
The commissioner of the state’s Department of Economic and Community Development said in a press release that the proposal will benefit over 120,000 companies in Connecticut.
The budget proposal also allows business owners to choose whether to pay the tax on their income at the business or personal level, giving them more flexibility.
Mark Boughton, the commissioner of Connecticut’s Department of Revenue Services, called the tax proposals “a win-win for Connecticut,” according to a report by Epoch Time on January 16, 2023.
Chris DiPentima, CEO of the Connecticut Business & Industry Association, said restoring the pass-through entity tax credit to its original level will have a positive impact on small businesses, allowing them to invest in jobs and compete. He added that this is a critical step needed to help Connecticut’s smaller employers and put millions of dollars back into a small businesses.
Connecticut Governor Lamont proposes reducing business taxes and personal income tax rates in the upcoming budget proposal. State Senate Republicans support the plan, saying it will make the state more affordable for working and middle-class families and promote job growth.
Lamont presented his business tax plans the day after Connecticut’s revenue forecast projected a surplus of over $3 billion.