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

New subsection (ee) allows a temporary deduction for qualified tips (IRC section 224) and qualified overtime compensation (IRC section 225) for tax years beginning after December 31, 2025 and before January 1, 2029. Nonresidents can only deduct amounts attributable to services performed in Michigan.

The pregnancy-related personal exemption in subsection (2)(d) was modified: the effective date changed from January 1, 2026 to January 1, 2028; the minimum gestational age threshold increased from 10 weeks to 12 weeks; and the certifying professional was broadened from 'physician' to 'health care professional,' which now includes midwives, nurse practitioners with relevant certification, and doulas.

New subsection (ff) requires that for tax years beginning after December 31, 2024, adjusted gross income be calculated as if IRC sections 168(n) and 174A were not in effect, and as if sections 163(j), 168(k), 174, and 179 applied as they did on December 31, 2024. This decouples Michigan from federal tax changes made by the Inflation Reduction Act (Public Law 119-21).

New subsection (gg) requires that for tax years beginning after December 31, 2021, adjusted gross income be calculated as if the transition rules under section 70302 of Public Law 119-21 do not apply, further decoupling from federal law changes.

New subsection (hh) requires taxpayers to add back wages paid for organ donation leave when a credit under section 279 or 679 is claimed, preventing a double benefit.

The senior citizen interest, dividends, and capital gains deduction in subsection (p) had its birth-year restriction ('not available to a senior citizen born after 1945') made effective immediately rather than beginning January 1, 2012.

The wrongful imprisonment compensation deduction in subsection (z) had its 'for tax years that begin after December 31, 2018' limitation removed, making the deduction permanent.

The disabled veteran student loan discharge deduction in subsection (aa) had its temporary 2016-2019 provision removed, leaving only the provision for tax years beginning on and after January 1, 2025.

The Michigan National Guard retirement benefits deduction in subsection (e)(iii) had its 'Beginning January 1, 2012' effective date removed, making the deduction appear without a start-date limitation.