HB 4202 — Individual income tax: exemptions; additional exemption for fetus; provide for. Amends sec. 30 of 1967 PA 281 (MCL 206.30).

(iii) The state treasurer shall, if necessary, modify the application of any references in the internal revenue code to the sections identified in subparagraphs (i) and (ii) in a reasonable manner to carry out the purpose of this subdivision, including, but not limited to, modifying the application of section references that were amended under Public Law 119-21.

KAS H00242'25 (H-4) u0a7n9 1 (gg) For tax years beginning after December 31, 2021, adjusted gross income must be calculated as if the transition rules under section 70302 of Public Law 119-21, including, but not limited to, any provisions related to the application of section 174A of the internal revenue code, do not apply.

(hh) Add, to the extent deducted in determining adjusted gross income, wages paid for organ donation leave for which a credit under section 279 or 679 is claimed.

(c) For tax years beginning on and after January 1, 2019, a A taxpayer may claim an additional exemption under this subsection in the tax year for which the taxpayer has a certificate of stillbirth from the department of health and human services as provided under section 2834 of the public health code, 1978 PA 368, MCL 333.2834.

(d) For tax years beginning on and after January 1, 2026,2028, a taxpayer who is at least 1012 weeks pregnant as of the last day of KAS H00242'25 (H-4) u0a7n9 1 the tax year and has been under the care and observation of a KAShealth H00242'25_HB4202_INTR_1care 2dfjryprofessional 1 physician since at least the tenthtwelfth week of pregnancy may claim an additional exemption under this subsection for that same tax year.

In order to claim the exemption under this subdivision, the taxpayer shall request a medical statement from the taxpayer's physicianhealth care professional verifying that the taxpayer is at least 1012 weeks pregnant as of the last day of the tax year and shall attach the medical statement to the annual return filed under this part for the same tax year for which the exemption is claimed.

The medical statement required under this subdivision must be signed and dated by the physician.health care professional.

As used in this subdivision, "physician""health meanscare anprofessional" individualmeans licensedany to engage in the practice of medicine or the practicefollowing: of osteopathic medicine and surgery under article 15 of the public health code, 1978 PA 368, MCL 333.16101 to 333.18838.

(i) An individual licensed to engage in the practice of medicine or the practice of osteopathic medicine and surgery under part 170 or 175 of the public health code, 1978 PA 368, MCL 333.17001 to 333.17097 and 333.17501 to 333.17556.

(ii) An individual licensed to engage in the practice of midwifery under part 171 of the public health code, 1978 PA 368, MCL 333.17101 to 333.17123.

(iii) An individual who is licensed as a registered professional nurse under part 172 of the public health code, 1978 PA 368, MCL 333.17201 to 333.17242, and who has been granted a specialty certification as a nurse practitioner or a specialty certification in the health profession specialty field of nurse midwifery by the Michigan board of nursing under section 17210 of the public health code, 1978 PA 368, MCL 333.17210.

(iv) An individual who is a doula who provides continuous physical, emotional, and informational support to a mother before, KAS H00242'25 (H-4) u0a7n9 1 during, and shortly after childbirth to help the mother achieve a healthy and satisfying childbirth experience.

When a dependent of a taxpayer files an annual KAS H00242'25_HB4202_INTR_1 2dfjry 1 return under this part, the taxpayer or dependent of the taxpayer, but not both, may claim the additional exemption allowed under this subdivision.

(iii) "Veteran" means an individual who served in the active military, naval, marine, coast guard, or air service and who was discharged or released from the individual's service with an KAS H00242'25 (H-4) u0a7n9 1 honorable or general discharge.

(7) For each tax year beginning on and after January 1, 2013, the personal exemption allowed under subsection (2) shall be adjusted by multiplying the exemption for the tax year beginning in KAS H00242'25_HB4202_INTR_1 2dfjry 1 2012 by a fraction, the numerator of which is the United States Consumer Price Index for the state fiscal year ending in the tax year prior to the tax year for which the adjustment is being made and the denominator of which is the United States Consumer Price Index for the 2010-2011 state fiscal year.

For each tax year, the exemptions allowed under subsection (3) shall be adjusted by multiplying the exemption amount under subsection (3) for the tax year by a fraction, the KAS H00242'25 (H-4) u0a7n9 1 numerator of which is the United States Consumer Price Index for the state fiscal year ending the tax year prior to the tax year for which the adjustment is being made and the denominator of which is the United States Consumer Price Index for the 1998-1999 state fiscal year.

KAS H00242'25_HB4202_INTR_1 2dfjry 1 (iii) Employee annuities or tax-sheltered annuities purchased under section 403(b) of the internal revenue code by organizations exempt under section 501(c)(3) of the internal revenue code, or by public school systems.

(i) Plans of the United States, state governments other than this state, and political subdivisions, agencies, or KAS H00242'25 (H-4) u0a7n9 1 instrumentalities of this state.

(B) Distributions from plans under section 401(k) of the KAS H00242'25_HB4202_INTR_1 2dfjry 1 internal revenue code other than plans described in subdivision (a)(iv).

(9) Except as otherwise provided in subsection (10) or (11), KAS H00242'25 (H-4) u0a7n9 1 in determining taxable income under this section, the following limitations and restrictions apply:

(c) Beginning January 1, 2013 for a person born in 1946 KAS H00242'25_HB4202_INTR_1 2dfjry 1 through 1952 and beginning January 1, 2018 for a person born after 1945 who has retired as of January 1, 2013, if that person receives retirement or pension benefits from employment with a governmental agency that was not covered by the federal social security act, chapter 531, 49 Stat 620, 42 USC 301 to 1397mm, the sum of the deductions under subsection (1)(f)(i), (ii), and (iv) is limited to $35,000.00 for a single return and, except as otherwise provided under this subdivision, $55,000.00 for a joint return.

If both spouses filing a joint return receive retirement or pension benefits from employment with a governmental agency that was not covered by the federal social security act, chapter 531, 49 Stat 620, 42 USC 301 to 1397mm, the sum of the deductions under KAS H00242'25 (H-4) u0a7n9 1 subsection (1)(f)(i), (ii), and (iv) is limited to $70,000.00 for a joint return.

(d) Except as otherwise provided under subdivision (c) for a person who was retired as of January 1, 2013, for a person born after 1952 who has reached the age of 62 through 66 years of age and who receives retirement or pension benefits from employment with a governmental agency that was not covered by the federal KAS H00242'25_HB4202_INTR_1 2dfjry 1 social security act, chapter 531, 49 Stat 620, 42 USC 301 to 1397mm, the sum of the deductions under subsection (1)(f)(i), (ii), and (iv) is limited to $15,000.00 for a single return and, except as otherwise provided under this subdivision, $15,000.00 for a joint return.

If both spouses filing a joint return receive retirement or pension benefits from employment with a governmental agency that was not covered by the federal social security act, chapter 531, 49 Stat 620, 42 USC 301 to 1397mm, the sum of the deductions under subsection (1)(f)(i), (ii), and (iv) is limited to $30,000.00 for a joint return.

When that person reaches the KAS H00242'25 (H-4) u0a7n9 1 age of 67, that person is eligible for a deduction of $20,000.00 for a single return and $40,000.00 for a joint return, which deduction is available against all types of income and is not restricted to income from retirement or pension benefits.

IfFor tax years that begin before January 1, 2026 and after December 31, 2028, if a person takes the deduction of $20,000.00 for a single return and $40,000.00 for a joint return, that person shall not take the deduction under subsection (1)(f)(iii) and shall not take the personal exemption under subsection (2).

ThatFor tax years that begin before January 1, 2026 and after December 31, 2028, that person may elect not to take the deduction of $20,000.00 for a single return and $40,000.00 for a joint return and elect to take the deduction under subsection (1)(f)(iii) and the personal exemption under subsection (2) if that election would reduce that person's tax liability.

For tax years that begin on and after January 1, 2026 and before January 1, 2029, if a person takes the deduction of $20,000.00 for a single return or $40,000.00 for a joint return, that person shall not take the personal exemption under subsection (2).

(f) For a joint return, the limitations and restrictions in KAS H00242'25_HB4202_INTR_1 2dfjry 1 this subsection shall be applied based on the date of birth of the older spouse filing the joint return.

If a deduction under subsection (1)(f) was claimed on a joint return for a tax year in which a spouse died and the surviving spouse has not remarried since the death of that spouse, the surviving spouse is entitled to claim the deduction under subsection (1)(f) in subsequent tax years KAS H00242'25 (H-4) u0a7n9 1 subject to the same restrictions and limitations, for a single return, that would have applied based on the date of birth of the older of the 2 spouses.

KAS H00242'25_HB4202_INTR_1 2dfjry 1 (b) For the 2024 tax year, a taxpayer who was born after 1945 and before 1963 may deduct an amount of retirement or pension benefits not to exceed 50% of the maximum amount of retirement or pension benefits that the taxpayer would be allowed to deduct for the tax year under subsection (1)(f)(iv) if the taxpayer's retirement or pension benefits were subject to the limitations of KAS H00242'25 (H-4) u0a7n9 1 that subsection only.

If a deduction under subsection (1)(f) was claimed on a joint return for a tax year in which a spouse died and the surviving spouse has not remarried since the death of that spouse, the surviving spouse is entitled to claim the deduction under subsection (1)(f) in subsequent tax years subject to the same restrictions and limitations under this subsection, for a single return, that would have applied based on KAS H00242'25_HB4202_INTR_1 2dfjry 1 the date of birth of the older of the 2 spouses.

(11) For tax years beginning on and after January 1, 2023, in determining taxable income under this section, a taxpayer with retirement or pension benefits received for services as a public police or fire department employee subject to 1969 PA 312, MCL 423.231 to 423.247, a state police trooper or state police sergeant KAS H00242'25 (H-4) u0a7n9 1 subject to 1980 PA 17, MCL 423.271 to 423.287, or a corrections officer employed by a county sheriff in a county jail, work camp, or other facility maintained by a county that houses adult prisoners may elect to deduct retirement or pension benefits as provided under subsection (1)(f) without any additional limitations or restrictions or elect to apply the limitations and restrictions in subsection (9) or (10).

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