Treatment of Retirement Income under PA 4

Official source

PA 4 of 2023, the Lowering MI Costs Plan, was signed into Michigan law on March 7, 2023, and amended section 30 of the MITA, MCL 206.30, to phase out (roll back) the 3-tier system of limitations and restrictions placed on the retirement subtraction since 2012. PA 4 also created two new subsections, 30(10) and (11). These statutory amendments made the provisions of subsections 30(9), (10), and (11) elective, allowing taxpayers to choose the maximum deduction available under those provisions. In addition, PA 24 of 2025, effective October 7, 2025, amended subsection 30(9) to temporarily expand the standard deduction with respect to the Social Security income deduction. The following questions and answers provide a discussion that describes the subtraction for retirement or pension benefits and the standard deduction under PAs 4 and 24.

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Treatment of Retirement Income under PA 4

Official source

PA 4 of 2023, the Lowering MI Costs Plan, was signed into Michigan law on March 7, 2023, and amended section 30 of the MITA, MCL 206.30, to phase out (roll back) the 3-tier system of limitations and restrictions placed on the retirement subtraction since 2012. PA 4 also created two new subsections, 30(10) and (11). These statutory amendments made the provisions of subsections 30(9), (10), and (11) elective, allowing taxpayers to choose the maximum deduction available under those provisions. In addition, PA 24 of 2025, effective October 7, 2025, amended subsection 30(9) to temporarily expand the standard deduction with respect to the Social Security income deduction. The following questions and answers provide a discussion that describes the subtraction for retirement or pension benefits and the standard deduction under PAs 4 and 24.