General Assembly Raised Bill No. 1429 seeks to enhance personal income tax deductions for military personnel by introducing a new provision that allows for the subtraction of compensation received for serving in military funeral honor guard details from gross income for state tax purposes. This new language, marked as (xxxvi) To the extent properly includable in gross income for federal income tax purposes, the amount of any compensation received for attending a funeral as a member of an honor guard detail pursuant to section 27-76., will take effect on July 1, 2025, and will apply to taxable years starting on or after January 1, 2025. The bill also retains existing provisions related to other income subtractions, such as federal tax-exempt income and certain dividends, reflecting a commitment to support military personnel through tax relief. In addition to the new deduction for military funeral honor guard compensation, Raised Bill No. 1429 proposes modifications to the treatment of retirement income and other specific deductions. It introduces exclusions for certain retirement pay for retired Armed Forces and National Guard members, along with a phased approach to the taxation of income from the state teachers' retirement system. The bill also addresses deductions for organ donation expenses, financial assistance from the Crumbling Foundations Assistance Fund, and specific income received by general partners of venture capital funds. The deletion of the phrase and before the new insertion indicates a restructuring of the tax code to accommodate these changes, ultimately aiming to provide tax relief to retirees and individuals in unique financial situations.

Statutes affected:
Raised Bill: 12-701