The bill amends the Income Tax Act of 1967, specifically section 30, to clarify definitions and deductions related to taxable income for individuals. It introduces new provisions allowing for the deduction of compensation received under the wrongful imprisonment compensation act for tax years beginning after December 31, 2018, and permits disabled veterans to deduct income from canceled student loans due to total and permanent disability for tax years starting January 1, 2025. The bill also removes a provision that limited certain deductions for senior citizens born after 1945 and clarifies eligibility criteria for various deductions, including those related to retirement benefits and education savings accounts.

Additionally, the bill establishes new tax deductions for first-time home buyer and child care savings accounts, allowing deductions for contributions starting January 1, 2022, and January 1, 2026, respectively. It modifies personal exemptions, setting a personal exemption of $3,700 multiplied by the number of exemptions claimed, with adjustments based on the Consumer Price Index. The bill also introduces deductions for retirement or pension benefits for specific age groups for tax years 2024 through 2026, with limitations based on the older spouse's date of birth for joint returns. It ensures that surviving spouses can continue to claim deductions and allows certain public service employees to deduct retirement benefits without additional limitations. The bill will take effect only if House Bill No. 4056 is enacted into law.

Statutes affected:
House Introduced Bill: 206.30