SB 1046 Summary

• Creates a new optional deduction schedule for taxpayers born after 1945 allowing phased-in increases to retirement and pension benefit deductions: 25% eligibility in 2022, 50% in 2023, 75% in 2024, and full deduction starting 2025

• Adds $600 to the personal exemption amount starting in the 2022 tax year, adjusted annually for inflation

• Increases income tax deposits to the state school aid fund with new percentages effective October 1, 2022 through 2024 and onward

• Implements an automatic income tax rate reduction mechanism beginning January 1, 2023 if general fund revenue growth exceeds inflation, with rates determined by state fiscal officials

• Applies changes to section 30 (taxable income calculations) and section 51 (tax rates and distributions) of the Income Tax Act of 1967