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flag Connecticut lawmakers push to exempt tips and overtime from state income tax, costing $126M–$200M annually.

flag Connecticut lawmakers are advancing a bill to exempt tips and overtime pay from state income tax, aiming to boost take-home pay for hospitality workers and support local businesses. flag The proposal, backed by House Republicans and industry groups, argues that unpredictable earnings like tips and overtime should not be taxed, citing financial relief for middle-class workers. flag Supporters say the change would encourage overtime work and help retain employees, while opponents are considering alternative measures like expanding the child tax credit. flag The bill, estimated to cost $126 million to $200 million annually, is under review by the Finance, Revenue and Bonding Committee, with no final decision expected until the end of the legislative session.

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