The bill amends the Income Tax Act of 1967, specifically section 30, to introduce new definitions and deductions related to taxable income for individuals, particularly focusing on disabled veterans and first-time home buyers. Key insertions include provisions that allow taxpayers to deduct compensation received under the wrongful imprisonment compensation act and income from the cancellation of student loans for disabled veterans, effective for tax years beginning on or after January 1, 2025. The bill also clarifies definitions of taxable income and outlines various deductions related to retirement benefits, education savings accounts, and income from U.S. government obligations.

Additionally, the bill includes several deletions, such as the removal of specific language regarding deductions for senior citizens born after 1945 and the elimination of provisions related to oil and gas production income. It introduces new deductions for contributions to first-time home buyer savings accounts, with limits set at $5,000 for single filers and $10,000 for joint filers starting in 2022, and specifies the treatment of capital gains and losses from the sale of investment coins and bullion starting in 2026. The bill also adjusts personal and dependency exemptions based on various criteria, ensuring that the tax code reflects contemporary practices and provides equitable treatment for veterans and first-time home buyers.

Statutes affected:
House Introduced Bill: 206.30