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 deductions for compensation received under the wrongful imprisonment compensation act and for disabled veterans regarding student loan discharges due to total and permanent disability. The bill clarifies the treatment of various income sources, including education savings accounts and ABLE accounts, while establishing limits on deductions for certain income categories. Additionally, it removes outdated language concerning retirement benefits for Michigan National Guard members and specifies that certain deductions will not be available to senior citizens born after 1945, as well as eliminating previous provisions related to oil and gas production income and expenses.

Furthermore, the bill introduces changes to tax deductions and exemptions for Michigan taxpayers, particularly for first-time home buyer savings accounts and income during periods of vacancy in state legislative districts. Taxpayers can deduct wagering losses from their adjusted gross income starting January 1, 2021, and can also deduct contributions to first-time home buyer savings accounts beginning January 1, 2022, with specific limits. The bill allows taxpayers in vacant districts to deduct a percentage of their income during the vacancy period and modifies personal exemptions, including an additional exemption for taxpayers with a certificate of stillbirth. It also introduces new provisions for retirement or pension benefits deductions based on birth years for tax years 2024 through 2026, with specific limits and conditions for joint returns and public safety employees.

Statutes affected:
House Introduced Bill: 206.30