The bill amends the Income Tax Act of 1967, specifically section 30, to redefine "taxable income" for individuals by introducing new deductions and clarifying existing provisions. It allows for the deduction of retirement or pension benefits for commissioned officers in the National Oceanic and Atmospheric Administration and the United States Public Health Service, effective January 1, 2026. Additionally, disabled veterans can deduct income from canceled student loans due to total and permanent disability. The bill also modifies the definition of a disabled veteran by changing "either" to "any" in the eligibility criteria and includes adjustments related to education savings accounts, ABLE accounts, and wrongful imprisonment compensation.

Moreover, the bill establishes a phased approach for retirement or pension benefit deductions based on the taxpayer's birth year, with specific percentages increasing over the years for those born between 1945 and 1967. It also provides special provisions for surviving spouses who have not remarried, allowing them to claim deductions based on their own birth date. Public safety employees, such as police and firefighters, are granted the ability to deduct retirement benefits without limitations starting from tax years beginning on or after January 1, 2023. Overall, the bill aims to provide targeted tax relief to veterans, specific retirement benefits, and clarify the treatment of various income types.

Statutes affected:
House Introduced Bill: 206.30