The bill amends the Income Tax Act of 1967, specifically section 30, to update 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 disabled veterans regarding student loan discharges. Additionally, the bill enhances tax benefits related to education savings accounts and ABLE savings accounts. It also removes outdated language concerning retirement benefits for the Michigan National Guard and eliminates certain deductions related to oil and gas production income, while updating eligibility criteria for senior citizens regarding specific deductions.

Moreover, the bill establishes new deductions for gambling losses, first-time home buyer savings accounts, and retirement benefits for taxpayers born between 1945 and 1967. Taxpayers can deduct wagering losses up to the amount of gains from wagering transactions starting in 2021, and contributions to first-time home buyer savings accounts starting in 2022. The bill also allows tipped employees to deduct proven gratuities beginning in 2025 and modifies personal exemptions based on the Consumer Price Index. It clarifies definitions related to retirement benefits and allows certain public service employees to deduct their retirement benefits without limitations starting in 2023, ensuring a streamlined and clearer tax process for Michigan taxpayers.

Statutes affected:
Senate Introduced Bill: 206.30