The bill amends Michigan's tax law to enhance the definitions and calculations of taxable income for individuals, estates, and trusts. It introduces new deductions and adjustments, including those for retirement benefits, education savings accounts, and income exclusions for disabled veterans and Holocaust victims. The bill also establishes guidelines for income derived from U.S. government obligations and specifies conditions for claiming deductions related to charitable contributions and tuition payments. Additionally, it simplifies tax calculations by eliminating certain provisions related to oil and gas production and introduces new deductions for contributions to ABLE savings accounts and the treatment of student loan discharges for disabled veterans.

Moreover, the bill provides tax deductions for first-time home buyer savings accounts, allowing deductions of up to $5,000 for single filers and $10,000 for joint filers, while requiring nonqualified withdrawals to be added back to adjusted gross income. It modifies personal exemptions to $3,700 multiplied by the number of exemptions claimed, with adjustments based on the Consumer Price Index to account for inflation. The bill also introduces a tax credit for employers providing paid organ donation leave, equal to 100% of wages paid during the leave period, and allows taxpayers with retirement benefits from specific public service roles to deduct these benefits without limitations. The act is set to take immediate effect upon approval.

Statutes affected:
Substitute (S-1) AND AMENDMENT(S): 206.30, 206.623
Substitute (S-1): 206.30, 206.623
Substitute (S-2): 206.30, 206.623
Senate Introduced Bill: 206.1, 206.847
As Passed by the Senate: 206.30, 206.623
As Passed by the House: 206.30, 206.623
Senate Enrolled Bill: 206.30, 206.623