The bill amends the Income Tax Act of 1967 by updating Section 30 and adding new sections 279 and 679, which redefine "taxable income" for individuals, excluding corporations, estates, or trusts. Key insertions include provisions for adding gross interest income and dividends from out-of-state obligations, as well as deductions for various retirement benefits, including those from the Armed Forces and the Michigan National Guard. New deductions are introduced for contributions to education savings accounts and ABLE savings accounts, while certain income and expense considerations related to oil and gas production are eliminated. The bill also modifies existing language regarding deductions for wrongful imprisonment compensation and student loan discharges for disabled veterans, clarifying that compensation received under the wrongful imprisonment compensation act is deductible.

Additionally, the bill provides specific deductions and exemptions for disabled veterans and first-time home buyers, adjusts personal exemptions based on inflation, and introduces a new deduction for funds allocated to a student opportunity scholarship account. It allows for a personal exemption of $3,700 multiplied by the number of exemptions claimed, with additional exemptions for dependents who are disabled veterans or have other qualifying disabilities. The bill also establishes a new tax credit for contributions to certified scholarship-granting organizations participating in the student opportunity scholarship program, effective from the 2025 tax year, allowing taxpayers to claim a credit of up to 100% of their contributions, capped at $500 million per fiscal year.

Statutes affected:
Senate Introduced Bill: 206.30