Individual Income Tax – Treatment of Retirement Income Under Public Act 4 of 2023

(Replaces Revenue Administrative Bulletin 2023-22 and supplements Revenue Administrative Bulletins 2017-21, 2017-25, and 2018-21)

Approved: January 8, 2026

A taxpayer may rely on this Revenue Administrative Bulletin (RAB) until it is revoked by Treasury or until a law on which this RAB is based is altered by legislation or by binding judicial precedent. See MCL 205.6a and RAB 2016-20.

RAB 2026-1. This RAB discusses the tax treatment of retirement and pension benefits and the standard deduction following the changes to Section 30 of the Michigan Income Tax Act (MITA) enacted by Public Act 4 of 2023 (PA 4) and Public Act 24 of 2025. It updates RAB 2023-22 by providing further guidance on the deduction for certain public safety personnel and their spouses, both surviving and divorced. It also clarifies guidance regarding deductions available to surviving spouses who only claimed a social security deduction in the year of the decedent’s death. Additionally, this update removes transitional guidance regarding the withholding obligations of pension administrators that is no longer applicable and provides guidance about changes to the standard deduction for taxpayers with Social Security income for tax years 2026 through 2028. Overall, the RAB update reflects a streamlining of issues, update of dollar limits, and more clarity on frequently asked questions.

This RAB supplements RAB 2017-21, Individual Retirement Arrangements ; RAB 2017-25, Tax Treatment of Retirement Income from IRC 403(b) Plans ; and RAB 2018-21, Deduction of Retirement and Pension Benefits from a Public Retirement System .