The bill amends the Income Tax Act of 1967 to refine the definition of "taxable income" for individuals, introducing various deductions and adjustments. Key additions include retirement benefits from the Michigan National Guard, compensation under the wrongful imprisonment compensation act, and income from the cancellation of student loans for disabled veterans. It also establishes new deductions for education savings accounts and ABLE savings accounts while eliminating certain considerations related to oil and gas production. Additionally, the bill clarifies eligibility for deductions, such as specifying that the senior citizens' deduction is not available for those born after 1945, and updates the maximum allowable deductions for retirement or pension benefits based on the Consumer Price Index.

Moreover, the bill introduces provisions for first-time home buyer savings accounts and broadband expansion grants, allowing taxpayers to deduct contributions and interest earned on these accounts starting in 2022. It modifies personal exemptions and retirement benefit deductions, establishing a personal exemption of $3,700 adjusted for inflation. The bill also outlines a new framework for the taxation of retirement benefits, allowing deductions based on birth year for tax years 2023 to 2026, and includes provisions for public safety employees. Additionally, it addresses the taxation of flow-through entities, requiring taxpayers to include their share of positive business income in taxable income while excluding income allocable to corporations. The enactment of this bill is intended to be retroactive, applying to tax years beginning on or after January 1, 2023.

Statutes affected:
House Introduced Bill: 206.30
As Passed by the House: 206.30