The bill amends the Income Tax Act of 1967 to modernize various sections related to taxable income, including updates to definitions and adjustments for deductions and exemptions. Key changes include redefining "Internal revenue code" to reference the version in effect on January 1, 2025, and clarifying the definitions of "flow-through entity" and "nonresident member." The bill introduces new deductions for disabled veterans and first-time home buyers, while also modifying existing deductions related to retirement benefits and education savings accounts. Notably, it eliminates the previous restriction on senior citizen deductions based on birth year, allowing for broader eligibility.

Additionally, the bill outlines the allocation of revenue from a specific tax for the fiscal years 2024-2029, designating funds for the general fund, housing development initiatives, and other community programs. It establishes a tiered deduction system for retirement benefits based on the taxpayer's birth year and modifies how federal taxable income is calculated for tax years beginning after December 31, 2024. The bill also includes provisions for public safety employees regarding retirement benefits and specifies that certain sections of the Internal Revenue Code will not apply for the specified tax years. Overall, the bill aims to provide financial relief to targeted groups while ensuring fair tax calculations and revenue distribution.

Statutes affected:
Substitute (H-1): 206.12
House Introduced Bill: 206.12
As Passed by the House: 206.12