For the taxable year 2022, the subtraction modification of pension and annuity income is increased from 42% to 100% of any pension or annuity income received for the taxable year.
If your filing status is single, married filing separately, or head of household with federal AGI for the taxable year of less than $75,000 or married filing jointly with federal AGI of less than $100,000, and you receive income from certain pensions and annuities, such as from a defined benefit plan, 401(k), 403(b) or 457(b) plans, you qualify for this subtraction modification.
Do not include amounts that are not included on line 5b of the federal return. To determine the amount to enter on this line, begin with the amount reported on federal Form 1040, Line 5b, or federal Form
1040-SR, Line 5b, Taxable amount of pensions and annuities. From the amount on Line 5b, subtract:
- military retirement pay,
- Tier 1 and Tier 2 railroad retirement benefits, and
- Connecticut teachers’ retirement pay
Retired teachers can claim either the teacher's pension subtraction or the pension and annuity subtraction (if federal AGI is below threshold).