Income Tax Hikes Take Effect in Connecticut

Connecticut residents are well aware that Governor Dannel Malloy and state lawmakers raised taxes this year. In real dollars, the legislature signed off on the biggest tax increases in state history, covering everything from sales to personal income. The changes have generated controversy since the moment they were proposed.

While the state’s tax-hike package has received plenty of attention, however, there still may be a rude awakening for many Connecticut workers. That’s because the income tax increases that are at the center of the package — and which take effect today (August 1) — are retroactive to January . The higher tax rates, in other words, will be applied to money earned before lawmakers voted for the plan.

For Connecticut workers, smaller paychecks will be the result. A couple earning ,000 a year, for example, will see withheld from each weekly paycheck for the remainder of the year, according to the state Department of Revenue Services. A couple earning ,000 will see deducted each week.

The higher rates will not affect all workers, only those earning ,000 or more, according to the Associated Press.  In wealthy Connecticut, however, the changes are sure to affect a broad segment of the population — something that minority Republicans are pointing out as the higher rates begin to take hold.

The tax increase package “represents a change in life as we know it in Connecticut,” Larry Cafero, the Republican leader in the state House, said at the conclusion of the legislative session in June . “Most people don’t realize that, but they will.”