A bill to amend 1967 PA 281, entitled “Income tax act of 1967,” by amending sections 30 and 51 (MCL 206.30 and 206.51), section 30 as amended by 2022 PA 5 and section 51 as amended by 2020 PA 75.
Phases in an exemption for pension income from state income taxes.
Upon Senate passage: Exempts $56,961 of pension, social security or other annuity income from state income taxes for single filers and twice as much for joint filers. Increase the amount of income taxes earmarked to school purposes.
Co-sponsored by Sens.
Referred to the Committee on Finance, Insurance, and Consumer Protection
Reported without amendment
Referred to the Committee of the Whole
Reported with substitute S-2
Substitute S-2 concurred in by voice vote
1. Amend page 22, line 18, after “(b)” by striking out “Except as otherwise provided under subdivision (c), on” and inserting “On”.
2. Amend page 22, line 19, after “2012” by inserting “and before January 1, 2023”.
3. Amend page 22, following line 19, by inserting:
“(c) Except as otherwise provided under subdivision (d), on and after January 1, 2023, 4.05%.” and relettering the remaining subdivision.
The amendment failed by voice vote
1. Amend page 14, line 4, after “(7),” by striking out the balance of the line through “30a,” on line 5 and inserting “beginning on and after January 1, 2023,”.
2. Amend page 14, line 5, after “of” by striking out “$3,700.00” and inserting “$15,000.00 shall be subtracted in the calculation that determines taxable income. Each taxpayer may claim 1 personal exemption. However, if a joint return is not made by the taxpayer and the taxpayer’s spouse, the taxpayer may claim a personal exemption for the spouse if the spouse, for the calendar year in which the taxable year of the taxpayer begins, does not have any gross income and is not the dependent of another taxpayer. Except as otherwise provided in subsection (7), beginning on and after January 1, 2022, a dependency exemption of $5,000.00”.
3. Amend page 14, line 6, after “of” by striking out “personal and”.
4. Amend page 14, line 8, by striking out “personal and”.
5. Amend page 14, line 10, by striking out all of subdivision (a) and relettering the remaining subdivisions.
6. Amend page 16, line 7, after “1,” by striking out “2013,” and inserting “2024,”.
7. Amend page 16, line 10, by striking out “2012” and inserting “2023”.
8. Amend page 16, line 14, after the first “the” by striking out “2010-2011” and inserting “2021-2022”.
9. Amend page 16, line 14, after “year.” by striking out the balance of the line through “increment.” on line 18 and inserting “For the 2023 tax year and each tax year after 2023, the dependency exemptions allowed under subsection (2) shall be adjusted by multiplying the exemption for the tax year beginning in 2022 by a fraction, the numerator of which is the United States Consumer Price Index for the state fiscal year ending in the tax year prior to the tax year for which the adjustment is being made and the denominator of which is the United States Consumer Price Index for the 2020-2021 state fiscal year.”.
The amendment failed by voice vote
1. Amend page 27, following line 1, by inserting:
“Sec. 277. (1) For tax years that begin on and after January 1, 2023, a taxpayer may claim a credit against the tax imposed by this part equal to $500.00 for each qualified dependent of the taxpayer for which an exemption was claimed under section 30(2)(b) for that same tax year. If the credit allowed under this section exceeds the tax liability of the taxpayer for the tax year, that portion of the credit that exceeds the tax liability shall not be refunded.
(2) As used in this section, “qualified dependent” means a dependent who is less than 19 years of age on the last day of the tax year for which the credit is claimed.”.
The amendment failed by voice vote
1. Amend page 18, line 20, after “(10)” by inserting “and subject to the adjustment under subsection (11)”.
2. Amend page 18, line 29, after “67,” by inserting “through December 31, 2022,”.
3. Amend page 19, line 5, after “benefits.” by inserting “Beginning January 1, 2023, after that person reaches the age of 67, the deductions under subsection (1)(f)(i), (ii), and (iv) do not apply and that person is eligible for a deduction of $50,000.00 for a single return and $100,000.00 for a joint return, which deduction is available against all types of income and is not restricted to income from retirement or pension benefits.”.
4. Amend page 20, line 21, after “67,” by inserting “through December 31, 2022,”.
5. Amend page 20, line 24, after “benefits.” by inserting “Beginning January 1, 2023, when that person reaches the age of 67, that person is eligible for a deduction of $50,000.00 for a single return and $100,000.00 for a joint return, which deduction is available against all types of income and is not restricted to income from retirement or pension benefits.”.
6. Amend page 20, line 25, after “the” by inserting “unrestricted”.
7. Amend page 20, line 25, after “deduction” by striking out the balance of the line through “return,” on line 26 and inserting “under this subdivision,”.
8. Amend page 20, line 26, after “the” by inserting “unrestricted”.
9. Amend page 20, line 29, after “the” by inserting “unrestricted”.
10. Amend page 20, line 29, after “deduction” by striking out the balance of the line through “return” on page 21 line 1 and inserting “under this subdivision”.
11. Amend page 21, line 5, after “deduction” by striking out the balance of the line through the second “return” on line 6.
12. Amend page 22, following line 1, by inserting:
“(11) For the 2024 tax year and each tax year after 2024, the maximum deduction amounts allowed under subsection (9) shall be adjusted by multiplying the amount allowed for the 2023 tax year by a fraction, the numerator of which is the United States Consumer Price Index for the state fiscal year ending in the tax year prior to the tax year for which the adjustment is being made and the denominator of which is the United States Consumer Price Index for the 2021-2022 state fiscal year. The department shall annualize the amounts provided in this subsection as necessary.” and renumbering the remaining subsection.
The amendment failed by voice vote
1. Amend page 22, line 29, after “(b)” by striking out “Except as otherwise provided under subdivision (c), on” and inserting “On”.
2. Amend page 23, line 1, after “2012” by inserting “and before January 1, 2023”.
3. Amend page 23, following line 1, by inserting:
“(c) Except as otherwise provided under subdivision (d), on and after January 1, 2023, 4.05%.” and relettering the remaining subdivision.
The amendment failed 18 to 20 (details)
1. Amend page 14, line 7, after “1,” by striking out “2022” and inserting “2023”.
2. Amend page 14, line 8, after the first “of” by striking out “$5,000.00” and inserting “$15,000.00 shall be subtracted in the calculation that determines taxable income. Each taxpayer may claim 1 personal exemption. However, if a joint return is not made by the taxpayer and the taxpayer’s spouse, the taxpayer may claim a personal exemption for the spouse if the spouse, for the calendar year in which the taxable year of the taxpayer begins, does not have any gross income and is not the dependent of another taxpayer. Except as otherwise provided in subsection (7), beginning on and after January 1, 2022, a dependency exemption of $5,000.00”.
3. Amend page 14, line 9, by striking out “personal and”.
4. Amend page 14, line 10, after “of” by striking out “personal and”.
5. Amend page 14, line 12, by striking out all of subdivision (a) and relettering the remaining subdivisions.
6. Amend page 16, line 9, after “1,” by inserting “2024, the personal exemption allowed under subsection (2) shall be adjusted by multiplying the exemption for the tax year beginning in 2012 2023 by a fraction, the numerator of which is the United States Consumer Price Index for the state fiscal year ending in the tax year prior to the tax year for which the adjustment is being made and the denominator of which is the United States Consumer Price Index for the 2010-2011 2021-2022 state fiscal year.”.
7. Amend page 16, line 20, by striking out “2023,” and inserting “For each tax year beginning on and after January 1, 2023,”.
8. Amend page 16, line 20, after “the” by inserting “dependency and additional”.
The amendment failed 18 to 20 (details)
1. Amend page 27, following line 12, by inserting:
“Sec. 277. (1) For tax years that begin on and after January 1, 2023, a taxpayer may claim a credit against the tax imposed by this part equal to $500.00 for each qualified dependent of the taxpayer for which an exemption was claimed under section 30(2)(b) for that same tax year. If the credit allowed under this section exceeds the tax liability of the taxpayer for the tax year, that portion of the credit that exceeds the tax liability shall not be refunded.
(2) As used in this section, “qualified dependent” means a dependent who is less than 19 years of age on the last day of the tax year for which the credit is claimed.”.
The amendment failed 18 to 20 (details)
1. Amend page 18, line 24, after “(10)” by inserting “and subject to the adjustment under subsection (11)”.
2. Amend page 19, line 4, after “67,” by inserting “through December 31, 2022,”.
3. Amend page 19, line 9, after “benefits.” by inserting “Beginning January 1, 2023, after that person reaches the age of 67, the deductions under subsection (1)(f)(i), (ii), and (iv) do not apply and that person is eligible for a deduction of $50,000.00 for a single return and $100,000.00 for a joint return, which deduction is available against all types of income and is not restricted to income from retirement or pension benefits.”.
4. Amend page 19, line 10, after “deduction” by striking out the balance of the line through “return” on line 11.
5. Amend page 20, line 25, after “67,” by inserting “through December 31, 2022,”.
6. Amend page 20, line 28, after “benefits.” by inserting “Beginning January 1, 2023, when that person reaches the age of 67, that person is eligible for a deduction of $50,000.00 for a single return and $100,000.00 for a joint return, which deduction is available against all types of income and is not restricted to income from retirement or pension benefits.”.
7. Amend page 20, line 29, after “the” by inserting “unrestricted”.
8. Amend page 20, line 29, after “deduction” by striking out the balance of the page through “return,” on line 1 of page 21 and inserting “under this subdivision,”.
9. Amend page 21, line 4, after “the” by inserting “unrestricted”.
10. Amend page 21, line 4, after “deduction” by striking out the balance of the line through “return” on line 5 and inserting “under this subdivision”.
11. Amend page 21, line 9, after “deduction” by striking out the balance of the line through the second “return” on line 10.
12. Amend page 22, following line 5, by inserting:
“(11) For the 2024 tax year and each tax year after 2024, the maximum deduction amounts allowed under subsection (9) shall be adjusted by multiplying the amount allowed for the 2023 tax year by a fraction, the numerator of which is the United States Consumer Price Index for the state fiscal year ending in the tax year prior to the tax year for which the adjustment is being made and the denominator of which is the United States Consumer Price Index for the 2021-2022 state fiscal year. The department shall annualize the amounts provided in this subsection as necessary.” and renumbering the remaining subsection.
The amendment failed 18 to 20 (details)
Passed in the Senate 23 to 15 (details)
Referred to the Committee on Tax Policy
