The bill amends the Income Tax Act of 1967, specifically section 30, to modernize the definitions and adjustments related to taxable income for individuals. It clarifies the definition of "taxable income" as adjusted gross income with specific adjustments, including the addition of gross interest income and dividends from out-of-state obligations, deductions for certain retirement benefits, and education savings accounts. Notably, it introduces provisions for senior citizens regarding deductions for interest, dividends, and capital gains, with limits based on income levels. The bill also removes outdated references to retirement benefits and adjusts eligibility criteria for deductions, including eliminating the previous stipulation that senior citizen deductions are unavailable to those born after 1945.

Additionally, the bill provides various deductions and exemptions for taxpayers, particularly focusing on disabled veterans and first-time home buyers. It defines "disabled veteran" and allows for the deduction of wagering losses starting January 1, 2021, along with a new deduction for contributions to first-time home buyer savings accounts. The bill modifies personal exemptions, introduces additional exemptions for dependents with disabilities, and adjusts personal exemption amounts based on the Consumer Price Index. It also outlines limitations on deductions for retirement or pension benefits based on birth year and employment type, while allowing public safety employees to deduct retirement benefits without limitations starting from January 1, 2023. Overall, the bill aims to provide equitable tax relief and support to specific groups, ensuring that tax calculations remain fair and reflective of current economic conditions.

Statutes affected:
House Introduced Bill: 206.30