Individual income tax: retirement or pension benefits; limitations and restrictions on deductions of certain retirement or pension benefits, revenue distributions, earned income tax credit, rebate payments, rebate and revitalization and placemaking funds; revise, increase, and provide for. Amends title & secs. 30, 51, 272 & 695 of 1967 PA 281 (MCL 206.30 et seq.) & adds secs. 51h, 476 & 696.
Impact
If enacted, the changes proposed in HB4001 would significantly modify existing tax statutes, particularly regarding how retirees and pension earners are taxed in Michigan. The bill increases the amount of allowable deductions for various classes of retirement benefits, easing the financial burden on eligible taxpayers. Moreover, it sets forth guidelines for the amounts that will be distributed to the Michigan housing and community development fund and the revitalization and placemaking fund. These funds are intended to address housing needs and incentivize development projects across the state, potentially promoting economic growth.
Summary
House Bill 4001 aims to amend the individual income tax laws in Michigan, specifically addressing limitations and restrictions on deductions for retirement or pension benefits. The bill seeks to provide taxpayers with more favorable treatment concerning these deductions and introduces various mechanisms for distributing tax revenues. Notably, it establishes a Michigan taxpayer rebate fund to facilitate rebates related to the taxes levied under this act, reflecting a notable shift towards utilizing tax revenues directly for taxpayer benefits. Additionally, the bill anticipates adjustments to personal exemptions based on inflation and revenue growth, aimed at maintaining fairness in the tax code.
Sentiment
The sentiment surrounding HB4001 is generally positive among legislators who view the bill as a necessary reform to help retirees and low-income households. Advocates argue that improving tax deductions for pensioners will enhance the financial wellbeing of Michigan residents and stimulate local economies. However, some concerns have been raised regarding the long-term sustainability of tax revenues and whether the anticipated distributions to various funds could detract from other government services or infrastructure projects. As such, while there is broad support for the bill, these discussions reveal an acknowledgment of the complex trade-offs at play.
Contention
Notable points of contention concerning HB4001 include the implications for state revenue, particularly given the increased deductions outlined in the bill. Critics argue that by raising the levels of deductible retirement benefits, the state may reduce its overall tax revenue, which could impact funding for public services. Additionally, the bill’s structure establishes various thresholds and caps for revenue distribution to state funds, which could lead to debates regarding equitable treatment of taxpayer contributions versus the distribution benefits. Disagreements may also arise around the effectiveness of the proposed revitalization and placemaking efforts as a means of economic stimulation, contingent on the success of the programs funded by these revenues.
Individual income tax: retirement or pension benefits; limitations and restrictions on deductions of certain retirement or pension benefits and revenue distribution to state school aid fund; revise. Amends secs. 30 & 51 of 1967 PA 281 (MCL 206.30 & 206.51).
Individual income tax: retirement or pension benefits; 3-tier limitations and restrictions on deduction for retirement or pension benefits; modify. Amends sec. 30 of 1967 PA 281 (MCL 206.30).
Individual income tax: retirement or pension benefits; department of corrections retirement and pension benefits; exempt from income taxes. Amends sec. 30 of 1967 PA 281 (MCL 206.30).
Individual income tax: retirement or pension benefits; department of corrections retirement and pension benefits; exempt from income taxes. Amends sec. 30 of 1967 PA 281 (MCL 206.30).
Individual income tax: exemptions; increasing personal exemption, reducing income tax rate, lowering age for unrestricted deduction, and increasing deduction for certain retirement or pension benefits; provide for. Amends secs. 30 & 51 of 1967 PA 281 (MCL 206.30 & 206.51).
Individual income tax: deductions; certain broadband expansion grants; deduct from taxable income. Amends secs. 30, 623 & 815 of 1967 PA 281 (MCL 206.30 et seq.).
Individual income tax: deductions; certain broadband expansion grants; deduct from taxable income. Amends secs. 30, 623 & 815 of 1967 PA 281 (MCL 206.30 et seq.).
Individual income tax: deductions; deduct overtime compensation from taxable income; provide for. Amends secs. 30, 701, 703 & 711 of 1967 PA 281 (MCL 206.30 et seq.).
Individual income tax: deductions; deduction for all compensation earned by a taxpayer 17 years of age or younger; provide for. Amends sec. 30 of 1967 PA 281 (MCL 206.30).
Corporate income tax: rate; increasing of rate and revising the distribution of revenue collected; provide for. Amends secs. 623 & 695 of 1967 PA 281 (MCL 206.623 & 206.695).
Individual income tax: retirement or pension benefits; 3-tier limitations and restrictions on deduction for retirement or pension benefits; modify. Amends sec. 30 of 1967 PA 281 (MCL 206.30).
Individual income tax: exemptions; increasing personal exemption, reducing income tax rate, lowering age for unrestricted deduction, and increasing deduction for certain retirement or pension benefits; provide for. Amends secs. 30 & 51 of 1967 PA 281 (MCL 206.30 & 206.51).
Individual income tax: retirement or pension benefits; limitations and restrictions on deductions of certain retirement or pension benefits and revenue distribution to state school aid fund; revise. Amends secs. 30 & 51 of 1967 PA 281 (MCL 206.30 & 206.51).
Individual income tax: deductions; contributions to a child care savings account; deduct. Amends sec. 30 of 1967 PA 281 (MCL 206.30). TIE BAR WITH: HB 4056'25
Individual income tax: deductions; deduction for residents in a district with a vacant legislative seat; provide for. Amends sec. 30 of 1967 PA 281 (MCL 206.30).
Individual income tax: deductions; deduction for contributions made to any 529 education savings plan; provide for. Amends sec. 30 of 1967 PA 281 (MCL 206.30).