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HOUSE BILL NO. 6052
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
by amending section 30 (MCL 206.30), as amended by 2025 PA 24.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 30. (1) "Taxable income" means, for a person other than a 1
corporation, estate, or trust, adjusted gross income as defined in 2
the internal revenue code subject to the following adjustments 3
under this section: 4
(a) Add gross interest income and dividends derived from 5
obligations or securities of states other than Michigan, in the 6
June 04, 2026, Introduced by Reps. Koleszar, Rheingans, McFall, Xiong, MacDonell and Foreman
and referred to Committee on Election Integrity.
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same amount that has been excluded from adjusted gross income less 1
related expenses not deducted in computing adjusted gross income 2
because of section 265(a)(1) of the internal revenue code. 3
(b) Add taxes on or measured by income to the extent the taxes 4
have been deducted in arriving at adjusted gross income including 5
any direct or indirect allocated share of taxes paid by a flow-6
through entity under part 4. 7
(c) Add losses on the sale or exchange of obligations of the 8
United States government, the income of which this state is 9
prohibited from subjecting to a net income tax, to the extent that 10
the loss has been deducted in arriving at adjusted gross income. 11
(d) Deduct, to the extent included in adjusted gross income, 12
income derived from obligations, or the sale or exchange of 13
obligations, of the United States government that this state is 14
prohibited by law from subjecting to a net income tax, reduced by 15
any interest on indebtedness incurred in carrying the obligations 16
and by any expenses incurred in the production of that income to 17
the extent that the expenses, including amortizable bond premiums, 18
were deducted in arriving at adjusted gross income. 19
(e) Deduct, to the extent included in adjusted gross income, 20
the following: 21
(i) Compensation, including retirement or pension benefits, 22
received for services in the Armed Forces of the United States. 23
(ii) Retirement or pension benefits under the railroad 24
retirement act of 1974, 45 USC 231 to 231v. 25
(iii) Retirement or pension benefits received for services in 26
the Michigan National Guard. 27
(f) Deduct the following to the extent included in adjusted 28
gross income subject to the limitations and restrictions set forth 29
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in subsection (9), (10), or (11), as applicable: 1
(i) Retirement or pension benefits received from a federal 2
public retirement system or from a public retirement system of or 3
created by this state or a political subdivision of this state. 4
(ii) Retirement or pension benefits received from a public 5
retirement system of or created by another state or any of its 6
political subdivisions if the income tax laws of the other state 7
permit a similar deduction or exemption or a reciprocal deduction 8
or exemption of a retirement or pension benefit received from a 9
public retirement system of or created by this state or any of the 10
political subdivisions of this state. 11
(iii) Social Security benefits as defined in section 86 of the 12
internal revenue code. 13
(iv) Beginning on and after January 1, 2007, retirement or 14
pension benefits not deductible under subparagraph (i) or 15
subdivision (e) from any other retirement or pension system or 16
benefits from a retirement annuity policy in which payments are 17
made for life to a senior citizen, to a maximum of $42,240.00 for a 18
single return and $84,480.00 for a joint return. The maximum 19
amounts allowed under this subparagraph shall be reduced by the 20
amount of the deduction for retirement or pension benefits claimed 21
under subparagraph (i) or subdivision (e) and by the amount of a 22
deduction claimed under subdivision (p). For the 2008 tax year and 23
each tax year after 2008, the maximum amounts allowed under this 24
subparagraph shall be adjusted by the percentage increase in the 25
United States Consumer Price Index for the immediately preceding 26
calendar year. The department shall annualize the amounts provided 27
in this subparagraph as necessary. 28
(v) The amount determined to be the section 22 amount eligible 29
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for the elderly and the permanently and totally disabled credit 1
provided in section 22 of the internal revenue code. 2
(g) Adjustments resulting from the application of section 271. 3
(h) Adjustments with respect to estate and trust income as 4
provided in section 36. 5
(i) Adjustments resulting from the allocation and 6
apportionment provisions of chapter 3. 7
(j) Deduct the following payments made by the taxpayer in the 8
tax year: 9
(i) The amount of a charitable contribution made to the advance 10
tuition payment fund created under section 9 of the Michigan 11
education trust act, 1986 PA 316, MCL 390.1429. 12
(ii) The amount of payment made under an advance tuition 13
payment contract as provided in the Michigan education trust act, 14
1986 PA 316, MCL 390.1421 to 390.1442. 15
(iii) The amount of payment made under a contract with a private 16
sector investment manager that meets all of the following criteria: 17
(A) The contract is certified and approved by the board of 18
directors of the Michigan education trust to provide equivalent 19
benefits and rights to purchasers and beneficiaries as an advance 20
tuition payment contract as described in subparagraph (ii). 21
(B) The contract applies only for a state institution of 22
higher education as defined in the Michigan education trust act, 23
1986 PA 316, MCL 390.1421 to 390.1442, or a community or junior 24
college in Michigan. 25
(C) The contract provides for enrollment by the contract's 26
qualified beneficiary in not less than 4 years after the date on 27
which the contract is entered into. 28
(D) The contract is entered into after either of the 29
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following: 1
(I) The purchaser has had the purchaser's offer to enter into 2
an advance tuition payment contract rejected by the board of 3
directors of the Michigan education trust, if the board determines 4
that the trust cannot accept an unlimited number of enrollees upon 5
an actuarially sound basis. 6
(II) The board of directors of the Michigan education trust 7
determines that the trust can accept an unlimited number of 8
enrollees upon an actuarially sound basis. 9
(k) If an advance tuition payment contract under the Michigan 10
education trust act, 1986 PA 316, MCL 390.1421 to 390.1442, or 11
another contract for which the payment was deductible under 12
subdivision (j) is terminated and the qualified beneficiary under 13
that contract does not attend a university, college, junior or 14
community college, or other institution of higher education, add 15
the amount of a refund received by the taxpayer as a result of that 16
termination or the amount of the deduction taken under subdivision 17
(j) for payment made under that contract, whichever is less. 18
(l) Deduct from the taxable income of a purchaser the amount 19
included as income to the purchaser under the internal revenue code 20
after the advance tuition payment contract entered into under the 21
Michigan education trust act, 1986 PA 316, MCL 390.1421 to 22
390.1442, is terminated because the qualified beneficiary attends 23
an institution of postsecondary education other than either a state 24
institution of higher education or an institution of postsecondary 25
education located outside this state with which a state institution 26
of higher education has reciprocity. 27
(m) Add, to the extent deducted in determining adjusted gross 28
income, the net operating loss deduction under section 172 of the 29
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internal revenue code. 1
(n) Deduct a net operating loss deduction for the taxable year 2
as determined under section 172 of the internal revenue code 3
subject to the modifications under section 172(b)(2) of the 4
internal revenue code and subject to the allocation and 5
apportionment provisions of chapter 3 for the taxable year in which 6
the loss was incurred. 7
(o) Deduct, to the extent included in adjusted gross income, 8
benefits from a discriminatory self-insurance medical expense 9
reimbursement plan. 10
(p) Beginning on and after January 1, 2007, subject to any 11
limitation provided in this subdivision, a taxpayer who is a senior 12
citizen may deduct to the extent included in adjusted gross income, 13
interest, dividends, and capital gains received in the tax year not 14
to exceed $9,420.00 for a single return and $18,840.00 for a joint 15
return. The maximum amounts allowed under this subdivision shall be 16
reduced by the amount of a deduction claimed for retirement or 17
pension benefits under subdivision (e) or a deduction claimed under 18
subdivision (f)(i), (ii), (iv), or (v). For the 2008 tax year and each 19
tax year after 2008, the maximum amounts allowed under this 20
subdivision shall be adjusted by the percentage increase in the 21
United States Consumer Price Index for the immediately preceding 22
calendar year. The department shall annualize the amounts provided 23
in this subdivision as necessary. The deduction under this 24
subdivision is not available to a senior citizen born after 1945. 25
(q) Deduct, to the extent included in adjusted gross income, 26
all of the following: 27
(i) The amount of a refund received in the tax year based on 28
taxes paid under this part and any direct or indirect allocated 29
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share of a refund received by a flow-through entity under part 4. 1
(ii) The amount of a refund received in the tax year based on 2
taxes paid under the city income tax act, 1964 PA 284, MCL 141.501 3
to 141.787. 4
(iii) The amount of a credit received in the tax year based on a 5
claim filed under sections 520 and 522 to the extent that the taxes 6
used to calculate the credit were not used to reduce adjusted gross 7
income for a prior year. 8
(r) Add the amount paid by the state on behalf of the taxpayer 9
in the tax year to repay the outstanding principal on a loan taken 10
on which the taxpayer defaulted that was to fund an advance tuition 11
payment contract entered into under the Michigan education trust 12
act, 1986 PA 316, MCL 390.1421 to 390.1442, if the cost of the 13
advance tuition payment contract was deducted under subdivision (j) 14
and was financed with a Michigan education trust secured loan. 15
(s) Deduct, to the extent included in adjusted gross income, 16
any amount, and any interest earned on that amount, received in the 17
tax year by a taxpayer who is a Holocaust victim as a result of a 18
settlement of claims against any entity or individual for any 19
recovered asset pursuant to the German act regulating unresolved 20
property claims, also known as Gesetz zur Regelung offener 21
Vermogensfragen, as a result of the settlement of the action 22
entitled In re: Holocaust victim assets litigation, CV-96-4849, CV-23
96-5161, and CV-97-0461 (E.D. NY), or as a result of any similar 24
action if the income and interest are not commingled in any way 25
with and are kept separate from all other funds and assets of the 26
taxpayer. As used in this subdivision: 27
(i) "Holocaust victim" means a person, or the heir or 28
beneficiary of that person, who was persecuted by Nazi Germany or 29
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any Axis regime during any period from 1933 to 1945. 1
(ii) "Recovered asset" means any asset of any type and any 2
interest earned on that asset, including, but not limited to, bank 3
deposits, insurance proceeds, or artwork owned by a Holocaust 4
victim during the period from 1920 to 1945, withheld from that 5
Holocaust victim from and after 1945, and not recovered, returned, 6
or otherwise compensated to the Holocaust victim until after 1993. 7
(t) Deduct all of the following: 8
(i) To the extent not deducted in determining adjusted gross 9
income, contributions made by the taxpayer in the tax year less 10
qualified withdrawals made in the tax year from education savings 11
accounts, calculated on a per education savings account basis, 12
pursuant to the Michigan education savings program act, 2000 PA 13
161, MCL 390.1471 to 390.1486, not to exceed a total deduction of 14
$5,000.00 for a single return or $10,000.00 for a joint return per 15
tax year. The amount calculated under this subparagraph for each 16
education savings account shall not be less than zero. 17
(ii) To the extent included in adjusted gross income, interest 18
earned in the tax year on the contributions to the taxpayer's 19
education savings accounts if the contributions were deductible 20
under subparagraph (i). 21
(iii) To the extent included in adjusted gross income, 22
distributions that are qualified withdrawals from an education 23
savings account to the designated beneficiary of that education 24
savings account. 25
(u) Add, to the extent not included in adjusted gross income, 26
the amount of money withdrawn by the taxpayer in the tax year from 27
education savings accounts, not to exceed the total amount deducted 28
under subdivision (t) in the tax year and all previous tax years, 29
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if the withdrawal was not a qualified withdrawal as provided in the 1
Michigan education savings program act, 2000 PA 161, MCL 390.1471 2
to 390.1486. This subdivision does not apply to withdrawals that 3
are less than the sum of all contributions made to an education 4
savings account in all previous tax years for which no deduction 5
was claimed under subdivision (t), less any contributions for which 6
no deduction was claimed under subdivision (t) that were withdrawn 7
in all previous tax years. 8
(v) A taxpayer who is a resident tribal member may deduct, to 9
the extent included in adjusted gross income, all nonbusiness 10
income earned or received in the tax year and during the period in 11
which an agreement entered into between the taxpayer's tribe and 12
this state pursuant to section 30c of 1941 PA 122, MCL 205.30c, is 13
in full force and effect. As used in this subdivision: 14
(i) "Business income" means business income as defined in 15
section 4 and apportioned under chapter 3. 16
(ii) "Nonbusiness income" means nonbusiness income as defined 17
in section 14 and, to the extent not included in business income, 18
all of the following: 19
(A) All income derived from wages whether the wages are earned 20
within the agreement area or outside of the agreement area. 21
(B) All interest and passive dividends. 22
(C) All rents and royalties derived from real property located 23
within the agreement area. 24
(D) All rents and royalties derived from tangible personal 25
property, to the extent the personal property is utilized within 26
the agreement area. 27
(E) Capital gains from the sale or exchange of real property 28
located within the agreement area. 29
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(F) Capital gains from the sale or exchange of tangible 1
personal property located within the agreement area at the time of 2
sale. 3
(G) Capital gains from the sale or exchange of intangible 4
personal property. 5
(H) All pension income and benefits, including, but not 6
limited to, distributions from a 401(k) plan, individual retirement 7
accounts under section 408 of the internal revenue code, or a 8
defined contribution plan, or payments from a defined benefit plan. 9
(I) All per capita payments by the tribe to resident tribal 10
members, without regard to the source of payment. 11
(J) All gaming winnings. 12
(iii) "Resident tribal member" means an individual who meets all 13
of the following criteria: 14
(A) Is an enrolled member of a federally recognized tribe. 15
(B) The individual's tribe has an agreement with this state 16
pursuant to section 30c of 1941 PA 122, MCL 205.30c, that is in 17
full force and effect. 18
(C) The individual's principal place of residence is located 19
within the agreement area as designated in the agreement under sub-20
subparagraph (B). 21
(w) Eliminate all of the following: 22
(i) Income from producing oil and gas to the extent included in 23
adjusted gross income. 24
(ii) Expenses of producing oil and gas to the extent deducted 25
in arriving at adjusted gross income. 26
(x) Deduct all of the following: 27
(i) To the extent not deducted in determining adjusted gross 28
income, contributions made by the taxpayer in the tax year less 29
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qualified withdrawals made in the tax year from an ABLE savings 1
account, pursuant to the Michigan achieving a better life 2
experience (ABLE) program act, 2015 PA 160, MCL 206.981 to 206.997, 3
not to exceed a total deduction of $5,000.00 for a single return or 4
$10,000.00 for a joint return per tax year. The amount calculated 5
under this subparagraph for an ABLE savings account shall not be 6
less than zero. 7
(ii) To the extent included in adjusted gross income, interest 8
earned in the tax year on the contributions to the taxpayer's ABLE 9
savings account if the contributions were deductible under 10
subparagraph (i). 11
(iii) To the extent included in adjusted gross income, 12
distributions that are qualified withdrawals from an ABLE savings 13
account to the designated beneficiary of that ABLE savings account. 14
(y) Add, to the extent not included in adjusted gross income, 15
the amount of money withdrawn by the taxpayer in the tax year from 16
an ABLE savings account, not to exceed the total amount deducted 17
under subdivision (x) in the tax year and all previous tax years, 18
if the withdrawal was not a qualified withdrawal as provided in the 19
Michigan achieving a better life experience (ABLE) program act, 20
2015 PA 160, MCL 206.981 to 206.997. This subdivision does not 21
apply to withdrawals that are less than the sum of all 22
contributions made to an ABLE savings account in all previous tax 23
years for which no deduction was claimed under subdivision (x), 24
less any contributions for which no deduction was claimed under 25
subdivision (x) that were withdrawn in all previous tax years. 26
(z) Deduct, to the extent included in adjusted gross income, 27
compensation received in the tax year pursuant to the wrongful 28
imprisonment compensation act, 2016 PA 343, MCL 691.1751 to 29
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691.1757. 1
(aa) For tax years that begin on and after January 1, 2025, a 2
taxpayer who is a disabled veteran may deduct, to the extent 3
included in adjusted gross income, income reported on a federal 4
income tax form 1099-C that is attributable to the cancellation or 5
discharge of a student loan by the United States Department of 6
Education pursuant to the total and permanent disability discharge 7
program, 34 CFR 685.213. As used in this subdivision, "disabled 8
veteran" means an individual who meets either of the following 9
criteria: 10
(i) Has been determined by the United States Department of 11
Veterans Affairs to be permanently and totally disabled as a result 12
of military service and entitled to veterans' benefits at the 100% 13
rate. 14
(ii) Has been rated by the United States Department of Veterans 15
Affairs as individually unemployable. 16
(bb) For tax years that begin on and after January 1, 2021, 17
and subject to the limitation under this subdivision, deduct, to 18
the extent not deducted in determining adjusted gross income, 19
wagering losses deducted under section 165(d) of the internal 20
revenue code on the taxpayer's federal income tax return for the 21
same tax year. For a nonresident, only wagering losses that are 22
attributable to wagering transactions placed at or through a casino 23
or licensed race meeting located in this state may be deducted and 24
must not exceed the gains on wagering transactions allocated to 25
this state under section 110(2)(d). As used in this subdivision, 26
"casino" and "licensed race meeting" mean those terms as defined in 27
section 110. 28
(cc) Except as otherwise provided under subparagraph (i), for 29
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tax years that begin on and after January 1, 2022, deduct all of 1
the following: 2
(i) To the extent not deducted in determining adjusted gross 3
income, contributions made by the taxpayer in the tax year less 4
qualified withdrawals made in the tax year from a first-time home 5
buyer savings account, pursuant to the Michigan first-time home 6
buyer savings program act, 2022 PA 6, MCL 565.1001 to 565.1013, not 7
to exceed a total deduction of $5,000.00 for a single return or 8
$10,000.00 for a joint return per tax year. The amount calculated 9
under this subparagraph for a first-time home buyer savings account 10
shall not be less than zero. The deduction under this subparagraph 11
does not apply for tax years that begin after December 31, 2026. 12
(ii) To the extent not deducted in determining adjusted gross 13
income, interest earned in the tax year on the contributions to the 14
taxpayer's first-time home buyer savings account. 15
(iii) To the extent included in adjusted gross income, 16
distributions that are qualified withdrawals from a first-time home 17
buyer savings account to the qualified beneficiary of that savings 18
account. 19
(dd) For tax years that begin on and after January 1, 2022, 20
add, to the extent not included in adjusted gross income, the 21
amount of money withdrawn by the taxpayer in the tax year from a 22
first-time home buyer savings account, not to exceed the total 23
amount deducted under subdivision (cc) in the tax year and all 24
previous tax years, if the withdrawal was not a qualified 25
withdrawal as provided in the Michigan first-time home buyer 26
savings program act, 2022 PA 6, MCL 565.1001 to 565.1013. This 27
subdivision does not apply to withdrawals that are less than the 28
sum of all contributions made to a first-time home buyer savings 29
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account in all previous tax years for which no deduction was 1
claimed under subdivision (cc), less any contributions for which no 2
deduction was claimed under subdivision (cc) that were withdrawn in 3
all previous tax years. 4
(ee) Subject to the limitations under this subdivision, for 5
tax years beginning after December 31, 2025 and before January 1, 6
2029, deduct, to the extent not deducted in determining adjusted 7
gross income, an amount equal to the sum of the following 8
deductions allowed to be claimed on the taxpayer's federal income 9
tax return for the same tax year: 10
(i) Qualified tips under section 224 of the internal revenue 11
code. For a nonresident, only qualified tips that are attributable 12
to services performed in this state may be deducted. 13
(ii) Qualified overtime compensation under section 225 of the 14
internal revenue code. For a nonresident, only qualified overtime 15
compensation that is attributable to services performed in this 16
state may be deducted. 17
(ff) For tax years beginning after December 31, 2024, adjusted 18
gross income must be calculated as if both of the following 19
conditions applied, subject to any necessary adjustments under 20
subparagraph (iii): 21
(i) Sections 168(n) and 174A of the internal revenue code were 22
not in effect. 23
(ii) Sections 163(j), 168(k), 174, and 179 of the internal 24
revenue code applied as those provisions were in effect on December 25
31, 2024. 26
(iii) The state treasurer shall, if necessary, modify the 27
application of any references in the internal revenue code to the 28
sections identified in subparagraphs (i) and (ii) in a reasonable 29
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manner to carry out the purpose of this subdivision, including, but 1
not limited to, modifying the application of section references 2
that were amended under Public Law 119-21. 3
(gg) For tax years beginning after December 31, 2021, adjusted 4
gross income must be calculated as if the transition rules under 5
section 70302 of Public Law 119-21, including, but not limited to, 6
any provisions related to the application of section 174A of the 7
internal revenue code, do not apply. 8
(hh) For tax years beginning on and after January 1, 2026, 9
deduct, to the extent included in adjusted gross income, 100% of 10
any compensation paid by this state or any political subdivision of 11
this state to an individual in the exercise of the individual's 12
duties as an election inspector during an election period to assist 13
with the conduct of an election. As used in this subdivision: 14
(i) "Election challenger" means an individual designated under 15
section 730 of the Michigan election law, 1954 PA 116, MCL 168.730. 16
(ii) "Election inspector" means an individual who assists with 17
conducting elections in compliance with the Michigan election law, 18
1954 PA 116, MCL 168.1 to 168.992, but does not include election 19
challengers, election observers, or individuals who are full-time 20
employees of the county, city, or township clerk's office. 21
(iii) "Election observer" means an individual who volunteers to 22
observe election activities, as permitted by law, 23
(iv) "Election period" means the date of a state, local, or 24
federal election, including primary and general elections, and 25
includes the early voting period for that election date and any 26
dates prior to and after the election period that an election 27
inspector is required to attend election inspector trainings or 28
meetings. 29
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(2) Except as otherwise provided in subsection (7), and 1
section 30a, a personal exemption of $3,700.00 multiplied by the 2
number of personal and dependency exemptions shall be subtracted in 3
the calculation that determines taxable income. The number of 4
personal and dependency exemptions allowed shall be determined as 5
follows: 6
(a) Each taxpayer may claim 1 personal exemption. However, if 7
a joint return is not made by the taxpayer and the taxpayer's 8
spouse, the taxpayer may claim a personal exemption for the spouse 9
if the spouse, for the calendar year in which the taxable year of 10
the taxpayer begins, does not have any gross income and is not the 11
dependent of another taxpayer. 12
(b) A taxpayer may claim a dependency exemption for each 13
individual who is a dependent of the taxpayer for the tax year. 14
(c) A taxpayer may claim an additional exemption under this 15
subsection in the tax year for which the taxpayer has a certificate 16
of stillbirth from the department of health and human services as 17
provided under section 2834 of the public health code, 1978 PA 368, 18
MCL 333.2834. 19
(3) Except as otherwise provided in subsection (7), a single 20
additional exemption determined as follows shall be subtracted in 21
the calculation that determines taxable income in each of the 22
following circumstances: 23
(a) $1,800.00 for each taxpayer and every dependent of the 24
taxpayer who is a deaf person as defined in section 2 of the deaf 25
persons' interpreters act, 1982 PA 204, MCL 393.502; a paraplegic, 26
a quadriplegic, or a hemiplegic; a person who is blind as defined 27
in section 504; or a person who is totally and permanently disabled 28
as defined in section 522. When a dependent of a taxpayer files an 29
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annual return under this part, the taxpayer or dependent of the 1
taxpayer, but not both, may claim the additional exemption allowed 2
under this subdivision. 3
(b) For tax years beginning after 2007, $250.00 for each 4
taxpayer and every dependent of the taxpayer who is a qualified 5
disabled veteran. When a dependent of a taxpayer files an annual 6
return under this part, the taxpayer or dependent of the taxpayer, 7
but not both, may claim the additional exemption allowed under this 8
subdivision. As used in this subdivision: 9
(i) "Qualified disabled veteran" means a veteran with a 10
service-connected disability. 11
(ii) "Service-connected disability" means a disability incurred 12
or aggravated in the line of duty in the active military, naval, or 13
air service as described in 38 USC 101(16). 14
(iii) "Veteran" means an individual who served in the active 15
military, naval, marine, coast guard, or air service and who was 16
discharged or released from the individual's service with an 17
honorable or general discharge. 18
(4) An individual with respect to whom a deduction under 19
subsection (2) is allowable to another taxpayer during the tax year 20
is not entitled to an exemption for purposes of subsection (2), but 21
may subtract $1,500.00 in the calculation that determines taxable 22
income for a tax year. 23
(5) A nonresident or a part-year resident is allowed that 24
proportion of an exemption or deduction allowed under subsection 25
(2), (3), or (4) that the taxpayer's portion of adjusted gross 26
income from Michigan sources bears to the taxpayer's total adjusted 27
gross income. 28
(6) In calculating taxable income, a taxpayer shall not 29
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subtract from adjusted gross income the amount of prizes won by the 1
taxpayer under the McCauley-Traxler-Law-Bowman-McNeely lottery act, 2
1972 PA 239, MCL 432.1 to 432.47. 3
(7) For each tax year beginning on and after January 1, 2013, 4
the personal exemption allowed under subsection (2) shall be 5
adjusted by multiplying the exemption for the tax year beginning in 6
2012 by a fraction, the numerator of which is the United States 7
Consumer Price Index for the state fiscal year ending in the tax 8
year prior to the tax year for which the adjustment is being made 9
and the denominator of which is the United States Consumer Price 10
Index for the 2010-2011 state fiscal year. For the 2022 tax year 11
and each tax year after 2022, the adjusted amount determined under 12
this subsection shall be increased by an additional $600.00. The 13
resultant product shall be rounded to the nearest $100.00 14
increment. For each tax year, the exemptions allowed under 15
subsection (3) shall be adjusted by multiplying the exemption 16
amount under subsection (3) for the tax year by a fraction, the 17
numerator of which is the United States Consumer Price Index for 18
the state fiscal year ending the tax year prior to the tax year for 19
which the adjustment is being made and the denominator of which is 20
the United States Consumer Price Index for the 1998-1999 state 21
fiscal year. The resultant product shall be rounded to the nearest 22
$100.00 increment. 23
(8) As used in this section, "retirement or pension benefits" 24
means distributions from all of the following: 25
(a) Except as provided in subdivision (d), qualified pension 26
trusts and annuity plans that qualify under section 401(a) of the 27
internal revenue code, including all of the following: 28
(i) Plans for self-employed persons, commonly known as Keogh or 29
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HR10 plans. 1
(ii) Individual retirement accounts that qualify under section 2
408 of the internal revenue code if the distributions are not made 3
until the participant has reached 59-1/2 years of age, except in 4
the case of death, disability, or distributions described by 5
section 72(t)(2)(A)(iv) of the internal revenue code. 6
(iii) Employee annuities or tax-sheltered annuities purchased 7
under section 403(b) of the internal revenue code by organizations 8
exempt under section 501(c)(3) of the internal revenue code, or by 9
public school systems. 10
(iv) Distributions from a 401(k) plan attributable to employee 11
contributions mandated by the plan or attributable to employer 12
contributions. 13
(b) The following retirement and pension plans not qualified 14
under the internal revenue code: 15
(i) Plans of the United States, state governments other than 16
this state, and political subdivisions, agencies, or 17
instrumentalities of this state. 18
(ii) Plans maintained by a church or a convention or 19
association of churches. 20
(iii) All other unqualified pension plans that prescribe 21
eligibility for retirement and predetermine contributions and 22
benefits if the distributions are made from a pension trust. 23
(c) Retirement or pension benefits received by a surviving 24
spouse if those benefits qualified for a deduction prior to the 25
decedent's death. Benefits received by a surviving child are not 26
deductible. 27
(d) Retirement and pension benefits do not include: 28
(i) Amounts received from a plan that allows the employee to 29
20
KAS H06744'26_HB6052_INTR_1 vxqbz4
set the amount of compensation to be deferred and does not 1
prescribe retirement age or years of service. These plans include, 2
but are not limited to, all of the following: 3
(A) Deferred compensation plans under section 457 of the 4
internal revenue code. 5
(B) Distributions from plans under section 401(k) of the 6
internal revenue code other than plans described in subdivision 7
(a)(iv). 8
(C) Distributions from plans under section 403(b) of the 9
internal revenue code other than plans described in subdivision 10
(a)(iii). 11
(ii) Premature distributions paid on separation, withdrawal, or 12
discontinuance of a plan prior to the earliest date the recipient 13
could have retired under the provisions of the plan. 14
(iii) Payments received as an incentive to retire early unless 15
the distributions are from a pension trust. 16
(9) Except as otherwise provided in subsection (10) or (11), 17
in determining taxable income under this section, the following 18
limitations and restrictions apply: 19
(a) For a person born before 1946, this subsection provides no 20
additional restrictions or limitations under subsection (1)(f). 21
(b) Except as otherwise provided in subdivision (c), for a 22
person born in 1946 through 1952, the sum of the deductions under 23
subsection (1)(f)(i), (ii), and (iv) is limited to $20,000.00 for a 24
single return and $40,000.00 for a joint return. After that person 25
reaches the age of 67, the deductions under subsection (1)(f)(i), 26
(ii), and (iv) do not apply and that person is eligible for a 27
deduction of $20,000.00 for a single return and $40,000.00 for a 28
joint return, which deduction is available against all types of 29
21
KAS H06744'26_HB6052_INTR_1 vxqbz4
income and is not restricted to income from retirement or pension 1
benefits. A person who takes the deduction under subsection (1)(e) 2
is not eligible for the unrestricted deduction of $20,000.00 for a 3
single return and $40,000.00 for a joint return under this 4
subdivision. 5
(c) Beginning January 1, 2013 for a person born in 1946 6
through 1952 and beginning January 1, 2018 for a person born after 7
1945 who has retired as of January 1, 2013, if that person receives 8
retirement or pension benefits from employment with a governmental 9
agency that was not covered by the federal social security act, 42 10
USC 301 to 1397mm, the sum of the deductions under subsection 11
(1)(f)(i), (ii), and (iv) is limited to $35,000.00 for a single return 12
and, except as otherwise provided under this subdivision, 13
$55,000.00 for a joint return. If both spouses filing a joint 14
return receive retirement or pension benefits from employment with 15
a governmental agency that was not covered by the federal social 16
security act, 42 USC 301 to 1397mm, the sum of the deductions under 17
subsection (1)(f)(i), (ii), and (iv) is limited to $70,000.00 for a 18
joint return. After that person reaches the age of 67, the 19
deductions under subsection (1)(f)(i), (ii), and (iv) do not apply and 20
that person is eligible for a deduction of $35,000.00 for a single 21
return and $55,000.00 for a joint return, or $70,000.00 for a joint 22
return if applicable, which deduction is available against all 23
types of income and is not restricted to income from retirement or 24
pension benefits. A person who takes the deduction under subsection 25
(1)(e) is not eligible for the unrestricted deduction of $35,000.00 26
for a single return and $55,000.00 for a joint return, or 27
$70,000.00 for a joint return if applicable, under this 28
subdivision. 29
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KAS H06744'26_HB6052_INTR_1 vxqbz4
(d) Except as otherwise provided under subdivision (c) for a 1
person who was retired as of January 1, 2013, for a person born 2
after 1952 who has reached the age of 62 through 66 years of age 3
and who receives retirement or pension benefits from employment 4
with a governmental agency that was not covered by the federal 5
social security act, 42 USC 301 to 1397mm, the sum of the 6
deductions under subsection (1)(f)(i), (ii), and (iv) is limited to 7
$15,000.00 for a single return and, except as otherwise provided 8
under this subdivision, $15,000.00 for a joint return. If both 9
spouses filing a joint return receive retirement or pension 10
benefits from employment with a governmental agency that was not 11
covered by the federal social security act, 42 USC 301 to 1397mm, 12
the sum of the deductions under subsection (1)(f)(i), (ii), and (iv) 13
is limited to $30,000.00 for a joint return. 14
(e) Except as otherwise provided under subdivision (c) or (d), 15
for a person born after 1952, the deduction under subsection 16
(1)(f)(i), (ii), or (iv) does not apply. When that person reaches the 17
age of 67, that person is eligible for a deduction of $20,000.00 18
for a single return and $40,000.00 for a joint return, which 19
deduction is available against all types of income and is not 20
restricted to income from retirement or pension benefits. For tax 21
years that begin before January 1, 2026 and after December 31, 22
2028, if a person takes the deduction of $20,000.00 for a single 23
return and $40,000.00 for a joint return, that person shall not 24
take the deduction under subsection (1)(f)(iii) and shall not take 25
the personal exemption under subsection (2). For tax years that 26
begin before January 1, 2026 and after December 31, 2028, that 27
person may elect not to take the deduction of $20,000.00 for a 28
single return and $40,000.00 for a joint return and elect to take 29
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KAS H06744'26_HB6052_INTR_1 vxqbz4
the deduction under subsection (1)(f)(iii) and the personal exemption 1
under subsection (2) if that election would reduce that person's 2
tax liability. For tax years that begin on and after January 1, 3
2026 and before January 1, 2029, if a person takes the deduction of 4
$20,000.00 for a single return or $40,000.00 for a joint return, 5
that person shall not take the personal exemption under subsection 6
(2). A person who takes the deduction under subsection (1)(e) is 7
not eligible for the unrestricted deduction of $20,000.00 for a 8
single return and $40,000.00 for a joint return under this 9
subdivision. 10
(f) For a joint return, the limitations and restrictions in 11
this subsection shall be applied based on the date of birth of the 12
older spouse filing the joint return. If a deduction under 13
subsection (1)(f) was claimed on a joint return for a tax year in 14
which a spouse died and the surviving spouse has not remarried 15
since the death of that spouse, the surviving spouse is entitled to 16
claim the deduction under subsection (1)(f) in subsequent tax years 17
subject to the same restrictions and limitations, for a single 18
return, that would have applied based on the date of birth of the 19
older of the 2 spouses. For tax years beginning after December 31, 20
2019, a surviving spouse born after 1945 who has reached the age of 21
67 and has not remarried since the death of that spouse may elect 22
to take the deduction that is available against all types of income 23
subject to the same limitations and restrictions as provided under 24
this subsection based on the surviving spouse's date of birth 25
instead of taking the deduction allowed under subsection (1)(f), 26
for a single return, based on the date of birth of the older 27
spouse. 28
(10) In determining taxable income under this section, a 29
24
KAS H06744'26_HB6052_INTR_1 vxqbz4
taxpayer may elect to deduct retirement or pension benefits as 1
provided under subsection (1)(f) with the following limitations and 2
restrictions or elect to apply the limitations and restrictions in 3
subsection (9), or subsection (11) if applicable: 4
(a) For the 2023 tax year, a taxpayer who was born after 1945 5
and before 1959 may deduct an amount of retirement or pension 6
benefits not to exceed 25% of the maximum amount of retirement or 7
pension benefits that the taxpayer would be allowed to deduct for 8
the tax year under subsection (1)(f)(iv) if the taxpayer's 9
retirement or pension benefits were subject to the limitations of 10
that subsection only. 11
(b) For the 2024 tax year, a taxpayer who was born after 1945 12
and before 1963 may deduct an amount of retirement or pension 13
benefits not to exceed 50% of the maximum amount of retirement or 14
pension benefits that the taxpayer would be allowed to deduct for 15
the tax year under subsection (1)(f)(iv) if the taxpayer's 16
retirement or pension benefits were subject to the limitations of 17
that subsection only. 18
(c) For the 2025 tax year, a taxpayer who was born after 1945 19
and before 1967 may deduct an amount of retirement or pension 20
benefits not to exceed 75% of the maximum amount of retirement or 21
pension benefits that the taxpayer would be allowed to deduct for 22
the tax year under subsection (1)(f)(iv) if the taxpayer's 23
retirement or pension benefits were subject to the limitations of 24
that subsection only. 25
(d) For the 2026 tax year and each tax year after 2026, a 26
taxpayer may deduct retirement or pension benefits as provided 27
under subsection (1)(f), except that the amounts deductible under 28
subsection (1)(f)(i) and (ii) combined are subject to the same 29
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KAS H06744'26_HB6052_INTR_1 vxqbz4
maximum amounts allowed under subsection (1)(f)(iv) for a single 1
return and a joint return for that same tax year. 2
(e) For a joint return, the limitations and restrictions in 3
this subsection shall be applied based on the date of birth of the 4
older spouse filing the joint return. If a deduction under 5
subsection (1)(f) was claimed on a joint return for a tax year in 6
which a spouse died and the surviving spouse has not remarried 7
since the death of that spouse, the surviving spouse is entitled to 8
claim the deduction under subsection (1)(f) in subsequent tax years 9
subject to the same restrictions and limitations under this 10
subsection, for a single return, that would have applied based on 11
the date of birth of the older of the 2 spouses. 12
(11) For tax years beginning on and after January 1, 2023, in 13
determining taxable income under this section, a taxpayer with 14
retirement or pension benefits received for services as a public 15
police or fire department employee subject to 1969 PA 312, MCL 16
423.231 to 423.247, a state police trooper or state police sergeant 17
subject to 1980 PA 17, MCL 423.271 to 423.287, or a corrections 18
officer employed by a county sheriff in a county jail, work camp, 19
or other facility maintained by a county that houses adult 20
prisoners may elect to deduct retirement or pension benefits as 21
provided under subsection (1)(f) without any additional limitations 22
or restrictions or elect to apply the limitations and restrictions 23
in subsection (9) or (10). 24
(12) As used in this section: 25
(a) "Oil and gas" means oil and gas subject to severance tax 26
under 1929 PA 48, MCL 205.301 to 205.317. 27
(b) "Senior citizen" means that term as defined in section 28
514. 29
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KAS H06744'26_HB6052_INTR_1 vxqbz4
(c) "United States Consumer Price Index" means the United 1
States Consumer Price Index for all urban consumers as defined and 2
reported by the United States Department of Labor, Bureau of Labor 3
Statistics. 4