The bill amends the Income Tax Act of 1967, specifically section 30, to modernize the definitions and adjustments related to taxable income for individuals. It introduces new provisions allowing for the deduction of compensation received under the wrongful imprisonment compensation act and provides specific tax benefits for disabled veterans concerning the cancellation of student loans. The bill also clarifies the treatment of various income sources, including those from education savings accounts and ABLE accounts, while eliminating certain deductions related to oil and gas production. Additionally, it streamlines definitions and deductions applicable to retirement and pension benefits, aligns them with current federal regulations, and adjusts maximum allowable deductions for senior citizens.

Moreover, the bill introduces several amendments focusing on deductions for gambling losses, first-time home buyer savings accounts, and retirement benefits. Taxpayers can deduct wagering losses up to the amount of gains from wagering transactions starting January 1, 2021, and can deduct contributions to first-time home buyer savings accounts beginning January 1, 2022, with specified maximum deductions. The bill also allows tipped employees to deduct reported gratuities starting January 1, 2025, and modifies personal and dependency exemptions, including a new exemption for stillbirths. It establishes a phased approach to retirement benefit deductions for taxpayers born between 1945 and 1967 and allows certain public safety employees to deduct their retirement benefits without limitations starting from tax years beginning January 1, 2023.

Statutes affected:
Senate Introduced Bill: 206.30