Bill review: Connecticut Refundable Renter's Tax Credit (CT HB5114)

[DTrim99]

Bill Review: Connecticut Refundable Renter's Tax Credit

Reform ID: ct-hb5114 | State: CT
Bill text: https://www.cga.ct.gov/2026/TOB/H/PDF/2026HB-05114-R01-HB.PDF
Description: Connecticut HB5114 creates a refundable renter's tax credit equal to 20% of annual rent paid minus 4% of federal AGI, with a maximum credit of $2,500. Eligible renters must have federal AGI below $75,000 (single/MFS/HoH) or $150,000 (MFJ), rent a primary residence for the full year, and not be claimed as a dependent. Effective for tax years beginning January 1, 2027.

Merging this PR will publish the bill to the dashboard.

---

What we model

Provision	Parameter	Current	Proposed
Renter's credit active	gov.contrib.states.ct.hb5114.in_effect	No	Yes
Rent percentage	gov.contrib.states.ct.hb5114.rent_percentage	0%	20%
AGI reduction rate	gov.contrib.states.ct.hb5114.agi_reduction_rate	0%	4%
Maximum credit	gov.contrib.states.ct.hb5114.max_credit	$0	$2,500
Income limit (single)	gov.contrib.states.ct.hb5114.income_threshold.SINGLE	N/A	$75,000
Income limit (joint)	gov.contrib.states.ct.hb5114.income_threshold.JOINT	N/A	$150,000

Validation

Back-of-envelope check

CT households: ~1.4M
Renter share: ~35% = ~490,000 renter households
Max credit: $2,500
Maximum potential cost: 490,000 × $2,500 = $1.225B
With income limits ($75k/$150k) and AGI reduction formula (4% clawback), actual cost is significantly lower
PE estimate of $562M = ~46% of max, which is reasonable

Fiscal note

No official fiscal note available yet (bill in committee).

Key results

Metric	Value
Revenue impact	-$561.7M
Poverty rate	27.43% → 26.82% (-2.2%)
Child poverty rate	21.12% → 20.16% (-4.5%)
Winners	26.0%
Losers	0.0%

Decile impact

Decile	Relative Change	Avg Benefit
1	5.92%	$678
2	2.39%	$693
3	1.51%	$656
4	1.06%	$594
5	0.74%	$517
6	0.58%	$492
7	0.15%	$152
8	0.16%	$205
9	0.00%	$5
10	0.00%	$6

District impacts

District	Avg Benefit	Winners	Losers	Poverty Change
CT-1	$485	26.9%	0%	N/A
CT-2	$428	25.1%	0%	N/A
CT-3	$493	26.9%	0%	N/A
CT-4	$410	25.3%	0%	N/A
CT-5	$457	25.8%	0%	N/A

Reform parameters JSON

{
  "gov.contrib.states.ct.hb5114.in_effect": {
    "2027-01-01.2100-12-31": true
  }
}

Model notes

• This analysis uses PolicyEngine Enhanced CPS microdata for Connecticut
• The credit formula is: min(20% × rent - 4% × AGI, $2,500)
• The CPS may not perfectly capture rental patterns for all households
• The credit is fully refundable per Section 1(c)

🤖 Generated with Claude Code