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).
Impact
The implementation of HB4008 is expected to bring significant changes to the way Michigan's income tax treats retirement and pension benefits. Notably, it permits individuals born after 1945 and aged 67 years and older to claim substantial deductions—$40,000 for single filers and $80,000 for joint filers—effectively increasing the tax exemption for retirement income. This shift aims to alleviate the financial burden on senior citizens by allowing deductions that are not limited to retirement income, making it easier for retirees to manage their overall tax liability.
Summary
House Bill 4008 proposes amendments to the 1967 Income Tax Act that modifies section 30 regarding taxable income and deductions related to retirement and pension benefits. This bill aims to adjust the deductions available to individuals receiving retirement benefits, particularly those who are 67 years or older. The legislation introduces a three-tier system that delineates maximum deductible amounts based on the age of the taxpayer and the type of retirement income received. Specifically, starting from January 1, 2023, qualifying individuals can claim higher deductions against all forms of income, enhancing financial relief for retirees.
Contention
Despite its potential benefits, the bill has sparked debate surrounding its framework for deductions. Critics argue that the tiered deduction system may favor higher-income retirees while leaving those with modest retirement incomes with insufficient relief. Additionally, there are concerns about the fiscal impact on state revenue, as increasing deductions could reduce tax income significantly. Proponents of the bill, on the other hand, argue that improved tax benefits for seniors are essential to support their financial stability and to encourage spending in the local economy, especially as the population ages.
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; 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: 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.
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; deduction for family leave optimal coverage benefits; provide for. Amends sec. 30 of 1967 PA 281 (MCL 206.30). TIE BAR WITH: HB 4574'23
Individual income tax: deductions; deduction for family leave optimal coverage benefits; provide for. Amends sec. 30 of 1967 PA 281 (MCL 206.30). TIE BAR WITH: SB 0332'23
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).
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; 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 from taxable income for distributions from a baby bond trust account for eligible expenditures; provide for. Amends sec. 30 of 1967 PA 281 (MCL 206.30). TIE BAR WITH: HB 6079'24, HB 6079'24, HB 6082'24
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).
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).