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, and allows the department to adjust excessive rents. The definition of "homestead" has been clarified to exclude unoccupied real property leased or rented by the owner unless adjacent to the owner's home. Additionally, the criteria for determining household resources and income have been modified, replacing "persons" with "individuals" and allowing specific deductions from income. The bill also revises tax credit calculations for both senior citizens and non-seniors, adjusting the percentage of property taxes that can be credited against state income tax liability and updating income thresholds for senior citizens.

Furthermore, the bill introduces new income tax brackets with corresponding rates for single and joint returns, adjusting thresholds for various income levels. For instance, it sets a tax rate of 1.0% for income over $3,000 but not exceeding $4,000 for single filers, and modifies the tax rate for incomes over $6,000 from 3.5% to 3.2% for tax years after 2024. The bill also outlines new provisions for tax credits for eligible servicepersons, veterans, widows, widowers, blind claimants, and senior citizens, increasing the percentage of rent that can be credited and establishing new definitions and eligibility criteria. These amendments will take 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