This bill amends the Income Tax Act of 1967 to enhance tax benefits for retirees, senior citizens, and disabled veterans. It updates the definition of "taxable income" and significantly increases the maximum deductible amounts for retirement or pension benefits, raising limits for single returns from $42,240 to $65,897 and for joint returns from $84,480 to $131,794, effective January 1, 2025. Additionally, it raises the deduction limits for senior citizens on interest, dividends, and capital gains from $9,420 to $14,688 for single returns and from $18,840 to $29,376 for joint returns, also starting in 2025. The bill introduces a provision allowing disabled veterans to deduct income from canceled student loans due to total and permanent disability and eliminates certain income and expense considerations related to oil and gas production from taxable income calculations.

Moreover, the bill establishes a personal exemption of $3,700 multiplied by the number of personal and dependency exemptions, with specific provisions for individuals with disabilities. It introduces a first-time home buyer savings account deduction and allows for the deduction of wagering losses starting January 1, 2021. The bill also creates a tiered deduction system for surviving spouses and establishes the Michigan Trump account contribution fund, which will provide matching contributions to eligible children. The fund will be managed by the state treasurer and will not lapse to the general fund until the end of the 2028-2029 fiscal year, with an appropriation of $100 million from revenue collected under this part for the fiscal years 2026-2027 through 2028-2029.

Statutes affected:
Senate Introduced Bill: 206.30