On Tuesday, Michigan Gov. Gretchen Whitmer joined Senate Majority Leader Winnie Brinks, Speaker of the House Joe Tate, and members of the Michigan legislature to sign the Lowering MI Costs plan into law. The Lowering MI Costs plan rolls back the retirement tax, putting $1,000 back in the pockets of 500,000 households, and quintuples the Working Families Tax Credit, delivering an average combined tax refund of $3,150 to 700,000 families, directly benefiting nearly one million kids – almost half the kids in Michigan.
“Right now, families are facing the pinch and having tough conversations about how to make ends meet,” said Whitmer. “Today, I am proud to sign a $1 billion tax cut for seniors and working families. Getting this done will help people pay the bills, put food on the table, and afford essentials like groceries and school supplies. It will ensure seniors can keep more of what they’ve earned over a lifetime of hard work and put money back in the pockets of 700,000 working families. I will continue to work with our legislative partners to build on this progress, grow our economy, and lower costs for every Michigander.”
“We are delivering on our commitment to Michiganders,” said Tate (D-Detroit). “With the signing of this bill, we are giving retirees back their hard-earned dollars and putting more money into the hands of working families. This is meaningful relief to help support our residents and it lets them know that their priorities are our priorities.”
—Retirement Tax
House Bill 4001, sponsored by Witwer, amends the Income Tax Act to phase out the retirement tax over four years and ultimately deliver an average of $1,000 to 500,000 households. The bills also equalizes the exemption on both public and private pensions.
—Working Families Tax Credit
House Bill 4001 will quintuple the Michigan Working Families Tax Credit match of the federal Earned Income Tax Credit to 30%, up from 6%. This expansion will deliver an average combined tax refund of $3,150 to 700,000 families, directly impacting nearly one million kids – almost half the kids in Michigan.
“More than a decade ago, this shameful pension tax broke a promise to retirees and forced those on fixed incomes to change their retirement plans when the rules of the game unexpectedly were rewritten,” said AARP Michigan State Director Paula D. Cunningham. “But today, after a 12-year fight and a final push that swamped state legislators with more than 13,300 emails from AARP members, this wrong has been righted, providing relief for half a million current retirees and waves of retirees yet to come. AARP applauds the governor and those legislators who elevated the repeal of this tax as a top priority and voted yes.”
“For many years, we have advocated for an increase to the state’s Earned Income Tax Credit, and we are thrilled to see Governor Whitmer sign this substantial boost for working families into law today,” said Dr. Darienne Hudson, president and CEO of United Way for Southeastern Michigan. “Raising Michigan’s EITC to 30% of the federal credit will directly benefit more than 2 million Michigan children by providing a meaningful increase to?working families’ incomes, many of whom are still struggling in the wake of the pandemic and whose budgets have been strained by inflation. We applaud Gov. Whitmer and the members of the legislature who supported this truly meaningful investment in households across the state.”
