Exempts up to $500,000 of nonqualified deferred compensation plan income from individual income tax for eligible taxpayers.

This bill modifies individual income tax rules to exclude up to $500,000 of nonqualified deferred compensation plan income from the computation of net income. Eligibility for this exclusion is limited to taxpayers who are disabled, at least 55 years of age, or surviving spouses of individuals who would have qualified for the retirement income exclusion. The bill applies retroactively to tax years beginning on or after January 1, 2025.

Exempts up to $500,000 of nonqualified deferred compensation plan income from individual income tax for eligible taxpayers.

This bill modifies individual income tax rules to exclude up to $500,000 of nonqualified deferred compensation plan income from the computation of net income. Eligibility for this exclusion is limited to taxpayers who are disabled, at least 55 years of age, or surviving spouses of individuals who would have qualified for the retirement income exclusion. The bill applies retroactively to tax years beginning on or after January 1, 2025.