The bill amends the Income Tax Act of 1967, specifically section 30, to refine the definitions and calculations of "taxable income" for individual taxpayers, excluding corporations, estates, or trusts. Key provisions include allowing taxpayers to add gross interest income and dividends from out-of-state obligations, as well as taxes deducted in calculating adjusted gross income. The bill introduces various deductions for retirement benefits, social security, and education savings accounts, while establishing new deductions for disabled veterans regarding student loan discharges and wagering losses. Additionally, it eliminates certain income and expense considerations related to oil and gas production, and emphasizes alignment with federal tax regulations, including annual adjustments to maximum deduction limits based on the Consumer Price Index.

Furthermore, the bill introduces specific changes to deductions and exemptions for taxpayers, particularly focusing on first-time home buyer savings accounts and retirement benefits. Taxpayers can deduct contributions to first-time home buyer savings accounts, with limits set at $5,000 for single filers and $10,000 for joint filers, while non-qualified withdrawals must be added back to adjusted gross income. The bill also modifies the personal exemption amount, introduces additional exemptions for taxpayers with disabilities or qualified disabled veterans, and establishes limits on deductions for retirement or pension benefits based on age and employment type. Provisions for surviving spouses regarding the continuation of deductions after a spouse's death are also included, aiming to provide favorable tax treatment for specific groups while ensuring compliance with federal regulations.

Statutes affected:
House Introduced Bill: 206.30