The bill amends the Income Tax Act of 1967 to update tax withholding requirements for various entities and individuals. A significant change is the introduction of a new 3% withholding rate for pension and annuity payments, while also clarifying that withholding is not necessary for distributions not expected to be included in the recipient's gross income. The bill specifies that withholding calculations should be based on taxable disbursements after accounting for personal and dependency exemptions. Additionally, it revises provisions for flow-through entities, adjusting withholding thresholds and the timing of tax accruals to enhance clarity and efficiency in tax processes.

The legislation also includes several deletions and insertions aimed at streamlining language and clarifying the responsibilities of employers, casino licensees, and race meeting licensees regarding tax withholding. It emphasizes the requirement for all withheld taxes to be reported and paid to the state within specified timeframes and outlines conditions under which certain entities may be exempt from withholding. Furthermore, it mandates that employers with over 250 employees file annual returns electronically and specifies the need for individuals receiving income subject to withholding to provide necessary information for accurate tax deductions. The enactment of this bill is contingent upon the passage of Senate Bill No. 425.

Statutes affected:
Senate Introduced Bill: 206.703