Under the new law, Michigan will begin phasing out a 2011 “retirement tax” over four years. Once fully implemented in the 2026 tax year, most forms of retirement income — including pensions, 401k and IRA withdrawals — will again be fully exempt from the state’s personal income tax rate, Deputy Treasurer Jeff Guilfoyle told Bridge on Tuesday.
The new law expands Michigan's Earned Income Tax Credit for lower-income workers from 6 percent to 30 percent of the federal version. The state rate had been 20 percent of the federal version before it was cut as part of the 2011 tax code rewrite approved by then-Gov. Rick Snyder.
For the 2022 tax year, a married couple with three kids qualified if they earned less than $59,187 combined. Individuals without children could qualify if they earned less than $16,480.