The bill amends the Income Tax Act of 1967 to update definitions and provisions related to homestead property tax credits. Key changes include a revised definition of "gross rent," which now specifies it as the total rent paid in an arms-length transaction. It clarifies that a homestead does not include unoccupied real property leased or rented by the owner unless adjacent to their home. Additionally, the criteria for determining household resources and income are modified, replacing "persons" with "individuals" and allowing certain deductions from income calculations. The tax credit calculations for both non-senior and senior citizens are also revised, with the percentage of property taxes that can be claimed as a credit adjusted accordingly.

The bill further proposes amendments to the state income tax law, adjusting income tax brackets and credits for eligible claimants. New tax brackets include specific income thresholds for single and joint returns, with rates ranging from 0% to 3.5% for tax years before 2025 and 3.2% for tax years after. It introduces a credit against state income tax liability for eligible servicepersons, veterans, and widows or widowers based on property taxes on their homestead. The eligibility criteria for tax credits for blind claimants and senior citizens are also modified, specifying income limits and property value thresholds. The total credit allowed must not exceed the property tax due and payable by the claimant in that year, with the amendments taking effect for tax years beginning on or after January 1, 2025, contingent upon the enactment of Senate Bill No. 345.

Statutes affected:
Senate Introduced Bill: 206.508