Current law provides a deduction from the state income tax for an amount that is the lesser of the first $6,000 of income from certain public, private and military pensions or the aggregate of benefits received under an employee retirement plan included in federal adjusted gross income.

This bill increases the deduction for pension income to $35,000 for tax years beginning January 1, 2005 and broadens the definition of "employee retirement plan" to include other retirement plans such as so-called Roth IRAs and simplified employee pension plans.