The bill amends the Income Tax Act of 1967, specifically section 30, to enhance the definitions and deductions related to taxable income for individuals. It introduces new provisions allowing taxpayers to deduct contributions made to qualified tuition programs and ABLE savings accounts established by other states, effective January 1, 2026. Additionally, it clarifies the treatment of income and deductions related to education savings accounts, including adjustments for non-qualified withdrawals. The bill also specifies that compensation received under the wrongful imprisonment compensation act is deductible from adjusted gross income. Furthermore, it removes certain provisions regarding the treatment of income from oil and gas production and modifies existing language to ensure clarity in the definitions and deductions applicable to retirement and pension benefits.

Moreover, the bill proposes several amendments focusing on deductions available to taxpayers, including the deduction of compensation received under the wrongful imprisonment compensation act for tax years beginning after December 31, 2018, and a new deduction for disabled veterans receiving income from canceled student loans due to total and permanent disability, applicable for tax years starting on or after January 1, 2025. It also allows taxpayers to deduct wagering losses for tax years beginning on or after January 1, 2021, with specific limitations for nonresidents. The bill outlines provisions for first-time home buyer savings accounts, adjusts personal exemptions, and introduces additional exemptions for individuals with disabilities and qualified disabled veterans. It further revises the treatment of retirement and pension benefits, allowing deductions based on birth years for tax years 2024 through 2026, and provides specific rules for joint returns and public safety employees regarding their retirement benefits.

Statutes affected:
House Introduced Bill: 206.30