The bill amends the Income Tax Act of 1967, specifically section 30, to modernize the definitions and adjustments related to taxable income for individuals. Key insertions include provisions allowing taxpayers to deduct contributions made to qualified tuition programs and ABLE savings accounts established by other states, effective January 1, 2026. The bill also clarifies the treatment of income and deductions related to education savings accounts and introduces new definitions for terms such as "resident tribal member" and "nonbusiness income." Additionally, it removes outdated language regarding retirement benefits and specifies that compensation received under the wrongful imprisonment compensation act is deductible from adjusted gross income.

Further amendments include allowing disabled veterans to deduct income from the cancellation of student loans by the U.S. Department of Education starting from tax years beginning on or after January 1, 2025, and establishing new deductions for first-time home buyer savings accounts. The bill modifies personal exemption calculations, allowing an additional exemption for taxpayers with a certificate of stillbirth and adjusting personal exemption amounts based on the Consumer Price Index. It introduces specific deductions for retirement or pension benefits based on birth years for tax years 2024 through 2026, with limitations for joint returns based on the older spouse's birth date. The bill aims to enhance the fairness and efficiency of the income tax system in Michigan.

Statutes affected:
House Introduced Bill: 206.30