The bill amends the Income Tax Act of 1967, specifically section 703, to clarify and modify the withholding requirements for various types of payments, including pension and annuity disbursements. It specifies that a person that disburses these payments may withhold tax based on the taxable portion of the payments, and outlines the calculation method for withholding, including the deduction of personal and dependency exemptions. The bill also introduces new provisions regarding the withholding of taxes by employers and flow-through entities, ensuring that they adhere to the same requirements as those mandated under the chapter.

Additionally, the bill includes several insertions that update the language and structure of the existing law, such as changing "who" to "that" in certain contexts and clarifying the responsibilities of employers and entities regarding tax withholding. It also establishes that a person disbursing annuity payments under a qualified charitable gift annuity is not required to withhold tax on those payments. The amendments are set to take effect on January 1, 2026.

Statutes affected:
Senate Introduced Bill: 206.703
As Passed by the Senate: 206.703