The bill amends the Income Tax Act of 1967 by updating the definition of "taxable income" for individuals, specifically excluding corporations, estates, or trusts. Key adjustments to the adjusted gross income include the inclusion of gross interest income and dividends from out-of-state obligations, as well as deductions for taxes and losses from the sale of U.S. government obligations. Notably, the bill modifies the language regarding Michigan National Guard benefits by removing the phrase "Beginning January 1, 2012, retirement" and replacing it with "Retirement." It also clarifies that compensation received under the wrongful imprisonment compensation act is deductible and allows disabled veterans to deduct certain income related to student loan discharges.

Additionally, the bill introduces provisions for first-time home buyer savings accounts, allowing taxpayers to deduct contributions made to these accounts starting from tax years on or after January 1, 2022, with specific limits on deductions based on filing status. It also modifies personal exemptions to include an additional exemption for stillbirths and adjusts the exemption amount according to the Consumer Price Index. The bill provides targeted relief for retirement or pension benefits, particularly for individuals born in certain years, and includes retroactive provisions effective for tax years beginning on or after January 1, 2023, ensuring that these changes apply to past tax filings.

Statutes affected:
Substitute (H-3): 206.30
House Introduced Bill: 206.30
As Passed by the House: 206.30