LANSING, Mich. – Gov. Gretchen Whitmer joined Senate Majority Leader Winnie Brinks, Speaker of the House Joe Tate, and members of the Michigan Legislature Tuesday to sign the Lowering MI Costs plan into law.
The 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,” Whitmer said. “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,” she added.
Brinks said the plan is undoing what she called the “unfair, decade-long budget experiment that required some of our most vulnerable to sacrifice even more.”
“Our new majority for the people means putting the real needs of real Michiganders first, and hundreds and thousands of retirees and families earning the least will have a bit of financial breathing room,” Brinks said.
The basic tenets of the plan include:
- Retirement Tax — House Bill 4001, sponsored by State Representative Angela Witwer (D-Delta Township), 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 quintuples 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 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.”