The bill amends the Income Tax Act of 1967 to enhance tax relief for specific groups, particularly disabled veterans and senior citizens, by introducing new deductions and clarifying existing provisions. Key insertions include the allowance for deductions related to compensation received under the wrongful imprisonment compensation act, specific tax benefits for disabled veterans regarding student loan cancellations, and new deductions for contributions to education savings accounts and ABLE savings accounts. The bill also revises the definition of "taxable income" to include deductions for wagering losses for nonresidents and contributions to first-time home buyer savings accounts, while establishing limits based on filing status. Additionally, it modifies personal exemptions, allowing for claims related to stillbirths and disabilities, and adjusts the personal exemption amount according to the Consumer Price Index.

Moreover, the bill introduces specific provisions for the taxation of retirement and pension benefits, allowing taxpayers born between 1946 and 1966 to deduct a portion of these benefits for the 2025 tax year and outlines rules for joint returns for surviving spouses. It also streamlines tax withholding regulations for flow-through entities and employers, exempting certain entities from withholding requirements under specific conditions and mandating detailed income statements for employees. The bill emphasizes accurate reporting and compliance with tax regulations, aiming to modernize Michigan's tax framework while providing clearer guidelines and expanded benefits for taxpayers.

Statutes affected:
Senate Introduced Bill: 206.30