The bill amends the Income Tax Act of 1967, specifically section 30, to modernize definitions and deductions related to taxable income for individuals. It introduces new provisions allowing deductions for compensation received under the wrongful imprisonment compensation act and for income from the cancellation of student loans for disabled veterans. Additionally, the bill clarifies that retirement benefits from the Michigan National Guard are deductible. It also eliminates previous provisions concerning oil and gas income and expenses, while specifying conditions for senior citizens to claim deductions on interest, dividends, and capital gains.

Furthermore, the bill provides various deductions and exemptions for specific taxpayer groups, including disabled veterans and first-time home buyers, defining "disabled veteran" as those permanently and totally disabled due to military service. Taxpayers can deduct wagering losses starting in 2021 and contributions to first-time home buyer savings accounts beginning in 2022, with specified maximum deductions. The bill also modifies personal exemptions, allowing for a personal exemption of $3,700 multiplied by the number of exemptions claimed, and introduces additional exemptions for taxpayers with a certificate of stillbirth and for dependents who are qualified disabled veterans. It outlines retirement and pension benefit deductions based on birth years for tax years 2024 through 2026, providing favorable tax treatment for retirees, particularly those in specific age groups and professions.

Statutes affected:
House Introduced Bill: 206.30