The bill amends the Income Tax Act of 1967, specifically section 30, to introduce new tax deductions and clarify existing provisions related to taxable income for individuals. It allows for the deduction of compensation received under the Wrongful Imprisonment Compensation Act for tax years beginning after December 31, 2018, and establishes a new deduction for disabled veterans starting in tax years after January 1, 2025, related to income from the cancellation of student loans due to total and permanent disability. The bill also removes certain language regarding retirement benefits for Michigan National Guard members and specifies that the deduction for senior citizens is not available to those born after 1945. Additionally, it eliminates the inclusion of income and expenses related to oil and gas production in adjusted gross income calculations.

Furthermore, the bill introduces provisions for taxpayers regarding the deduction of retirement or pension benefits based on their birth years for tax years 2024 through 2026. Taxpayers born after 1945 and before 1963 can deduct up to 50% of their retirement benefits for the 2024 tax year, while those born after 1945 and before 1967 can deduct up to 75% for the 2025 tax year. The bill also clarifies that limitations for joint returns will be based on the older spouse's birth date and allows surviving spouses to continue claiming deductions from joint returns after their spouse's death. It will take effect only if House Bill No. 4056 is enacted into law.

Statutes affected:
House Introduced Bill: 206.30