Pension Tax Repeal Moves Forward

Liz Gullett

Mar 01, 2019

Michigan’s pension tax would be repealed under legislation reported by the House Tax Policy Committee this week. Introduced by Representative Joe Bellino (R-Monroe) on the first day of the new legislative session, the bill would repeal the pension tax approved in 2011 and re-establish Michigan’s previous retirement tax structure. Under the proposal, public pensions would be exempt from taxation and other retirement income would have higher deductibles for state income taxes. Social security income would continue to be exempt.

According to the bill sponsor, Michigan’s current three-tiered system is clumsy, including different rules for taxpayers depending on the year they were born. He also pointed to the fact that the state’s economy and the state budget have improved since this plan was adopted in 2011.

Under the new committee process, House Bill 4006 has been referred to the House Ways and Means committee for consideration. If that committee reports the legislation, it would then be sent to the House floor for consideration by the full chamber.

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