HARTFORD, CT — Connecticut Democrats rolled out a tax plan Wednesday that would give families with children up to $450 in credits while also opening the door to higher income taxes on top earners—only if federal tax cuts for the wealthy deepen.
Under the proposal, parents could claim $150 per child for up to three children starting with the 2026 tax year.
The benefit would begin phasing out for joint filers earning more than $160,000 and single parents making over $100,000.
Previous attempts at a child tax credit have failed due to concerns over cost. This version joins a broader package aimed at balancing relief and new revenue streams.
The tax plan includes a $500 refundable income tax credit for owners of home day care centers. Another $5 million would go to businesses that sign Name, Image, and Likeness (NIL) deals with college athletes.
But the proposal doesn’t just hand out breaks.
Democratic leaders want to raise the state’s top two income tax rates from 6.9% and 6.99% to 7.5% and 7.99%—but only if Congress lowers the federal top rate from the current 37%. Senate President Martin Looney backed the trigger clause.
“In the wake of yet another federal tax cut that overwhelmingly benefits the wealthiest Americans, Connecticut cannot afford to fail to take action at a time of crisis,” Looney said in a statement.
“Under the last Trump administration, Connecticut’s top 1% saved $1.2 billion in federal taxes, while working families saw crumbs.”
“If Washington insists on handing billionaires another tax break, we will ensure some of that windfall comes back to the people of Connecticut to help deal with the massive federal cuts we anticipate,” he added.
Gov. Ned Lamont, a Democrat, rejected the idea of raising taxes.
“We don’t need that. I don’t support that,” Lamont told News 12 Connecticut. “We’ve eliminated taxes for our essential workers, working families. I’ve given a significant tax cut to middle-class families. We’ve done a lot to make our tax system more progressive.”
The tax package also includes Lamont’s proposal to ease the state’s Volatility Cap, which restricts how much capital gains tax revenue lawmakers can use.
Loosening it could free up $1 billion, with about two-thirds earmarked for an off-budget fund to cushion federal cuts.
Democrats also confirmed they’re scrapping a proposed tax on sodas and sugary drinks after strong opposition from restaurants and amusement parks.
The Legislature’s Finance, Revenue and Bonding Committee was expected to approve the plan late Wednesday. Lawmakers and the governor now face six weeks of negotiation on a final $55.7 billion budget
