The bill amends the Income Tax Act of 1967 to enhance tax relief for individuals by introducing new deductions and exemptions, particularly for disabled veterans, first-time home buyers, and specific retirement and pension benefits. Key provisions include allowing taxpayers to deduct certain retirement benefits from the Armed Forces, Michigan National Guard, and public retirement systems, as well as contributions to education and ABLE savings accounts. The bill also eliminates the inclusion of oil and gas production income in adjusted gross income and modifies existing provisions related to wrongful imprisonment compensation and student loan discharges for disabled veterans, effective for tax years beginning on or after January 1, 2025.

Additionally, the bill defines "disabled veteran" and establishes personal exemptions adjusted for inflation, including a personal exemption of $3,700 per claimed exemption and additional exemptions for stillbirths and disabled individuals. It introduces specific deductions for taxpayers born between 1945 and 1967, allowing them to deduct up to 75% of retirement benefits for the 2025 tax year, with limitations based on the birth date of the older spouse in joint returns. The bill also permits certain public service employees to deduct retirement benefits without limitations starting in 2023 and includes corporate income tax adjustments related to oil and gas production and bitcoin mining, ensuring clarity in tax calculations for flow-through entities.

Statutes affected:
House Introduced Bill: 206.30