The bill amends the Income Tax Act of 1967 to update the definition of "taxable income" for individuals, excluding corporations, estates, or trusts. It introduces adjustments to the adjusted gross income, including the addition of gross interest income and dividends from out-of-state obligations, as well as deductions for retirement benefits from public retirement systems, Social Security benefits, and specific deductions for senior citizens. The bill also establishes provisions for education savings accounts and ABLE savings accounts, allowing taxpayers to deduct contributions and qualified withdrawals. Notably, it eliminates certain income and expense considerations related to oil and gas production and specifies that the deduction for compensation under the wrongful imprisonment act applies to tax years beginning after January 1, 2025.

Additionally, the bill provides various deductions and exemptions for disabled veterans and first-time home buyers, defining "disabled veteran" as those permanently and totally disabled due to military service. It allows for the deduction of wagering losses starting January 1, 2021, and introduces a deduction for contributions to first-time home buyer savings accounts beginning January 1, 2022. The bill also introduces a new deduction for compensation received by taxpayers or their dependents who are 18 years or younger, effective January 1, 2026, and adjusts personal exemptions for dependents, including those with disabilities. Furthermore, it allows public safety employees to deduct their retirement benefits without limitations starting from tax years beginning January 1, 2023, while updating definitions to align with current legal standards.

Statutes affected:
House Introduced Bill: 206.30