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MICHIGAN STATE INCOME TAX
On May 25, 2011, Gov. Snyder signed legislation amending the Michigan Income Tax Act. The amendments did not take effect until January 1, 2012. This was a major overhaul of the Michigan individual income tax return. The changes target taxpayers with household resources over $75,000 for single filers and $150,000 for joint filers. It also has an adverse effect on many senior tax returns.
The legislation eliminates the personal exemption ($3,700) for taxpayers with total household resources over $100,000 for single and $200,000 for joint filers. It repeals the special exemption for seniors and phases out certain pension subtractions based on date of birth. It also repeals the $600 child 18 and under deduction.
Michigan Refundable Credits
The legislation also reduces the Earned Income Tax Credit from 20% to 6% of the Federal EIC. It completely overhauls the Homestead Property Tax Credit with many terms and provisions.
Michigan Non-Refundable Credits
The amendment takes away most income tax credits including:
Michigan Pension Subtractions
City income tax credit
- Public contribution credit
- Homeless shelters, food banks and community foundations credit
- Medical savings account credit
- Donations to Family Development Program Credit
There is no change in the pension subtraction if you were born before 1946. If you were born 1946 to 1952, your pension subtraction is reduced to $20,000 for a single filer, and $40,000 for jointly filed returns until you reach age 67 (income limitations apply). If you were born after 1952, your entire pension will be taxable to the state of Michigan until you reach the age of 67 (income limitations apply). Railroad and Military pensions along with Social Security Benefits remain non-taxable to the state of Michigan.
PAYMENT FOR YOUR TAX RETURN IS DUE UPON COMPLETION OF THE RETURN!!!!!!