Authorizes an individual income tax deduction for certain amounts a taxpayer receives through hardship distributions from retirement accounts (EN DECREASE GF RV See Note)
Impact
If enacted, HB 184 will amend state tax laws to include this new deduction, affecting how individual income taxes are calculated for qualifying taxpayers. The legislation defines 'hardship distributions' in a precise context, focusing on severe financial needs such as those experienced by individuals with terminal illnesses. By integrating this change, the bill enhances taxpayer options for managing immediate financial burdens without incurring penalties that typically accompany early withdrawals from retirement accounts. The provisions take effect for taxable periods starting on January 1, 2026, marking a future policy of supportive measures towards vulnerable populations.
Summary
House Bill 184 introduces provisions for a tax deduction for individuals who receive hardship distributions from their retirement accounts. The bill specifically targets taxpayers diagnosed with a terminal illness and allows them to deduct these amounts from their taxable income. This measure aims to provide financial relief to individuals facing significant health challenges, giving them better access to their retirement savings during times of dire need. It signifies a shift in how state tax law acknowledges hardships related to serious health issues, setting a precedent for future legislative considerations surrounding taxation and health-related financial issues.
Sentiment
The sentiment surrounding HB 184 is largely positive among proponents who advocate for increased financial support for individuals with terminal conditions. These supporters highlight the necessity of providing taxpayers more flexibility in accessing their retirement funds during crisis situations. However, there may be concerns regarding the state budget implications of such deductions, and while proponents see this as a crucial step in aiding those in need, some critics may worry about the potential for misuse of benefits or impacts on overall tax revenues.
Contention
Notably, the bill's provisions encountered minimal opposition during discussions, reflecting a general bipartisan consensus on issues relating to health and financial assistance. The clear targeting of terminally ill individuals underpins the bill's intent to serve a compassionate function in state financial policy. However, the effectiveness of implementation and monitoring for qualifying hardship distributions could be debated as potential points of contention in its future application, especially regarding the definitions and regulations surrounding 'hardship'.
Authorizes establishment of tax-advantaged catastrophe savings accounts to cover losses from damage to taxpayers' primary residences and commercial property (OR DECREASE GF RV See Note)
Provides for a flat rate for purposes of calculating income tax for individuals, estates, and trusts, increases the standard deduction, and modifies or repeals certain income tax deductions and credits (Item #5 and 6) (RE1 DECREASE GF RV See Note)
Provides for a flat rate for purposes of calculating income tax for individuals, estates, and trusts and modifies certain income tax deductions and credits (OR +$19,000,000 GF RV See Note)