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SENATE BILL NO. 911
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, and
by adding section 51i.
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
April 21, 2026, Introduced by Senator NESBITT and referred to Committee on Finance,
Insurance, and Consumer Protection.
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obligations or securities of states other than Michigan, in the 1
same amount that has been excluded from adjusted gross income less 2
related expenses not deducted in computing adjusted gross income 3
because of section 265(a)(1) of the internal revenue code. 4
(b) Add taxes on or measured by income to the extent the taxes 5
have been deducted in arriving at adjusted gross income including 6
any direct or indirect allocated share of taxes paid by a flow-7
through entity under part 4. 8
(c) Add losses on the sale or exchange of obligations of the 9
United States government, the income of which this state is 10
prohibited from subjecting to a net income tax, to the extent that 11
the loss has been deducted in arriving at adjusted gross income. 12
(d) Deduct, to the extent included in adjusted gross income, 13
income derived from obligations, or the sale or exchange of 14
obligations, of the United States government that this state is 15
prohibited by law from subjecting to a net income tax, reduced by 16
any interest on indebtedness incurred in carrying the obligations 17
and by any expenses incurred in the production of that income to 18
the extent that the expenses, including amortizable bond premiums, 19
were deducted in arriving at adjusted gross income. 20
(e) Deduct, to the extent included in adjusted gross income, 21
the following: 22
(i) Compensation, including retirement or pension benefits, 23
received for services in the Armed Forces of the United States. 24
(ii) Retirement or pension benefits under the railroad 25
retirement act of 1974, 45 USC 231 to 231v. 26
(iii) Retirement or pension benefits received for services in 27
the Michigan National Guard. 28
(f) Deduct the following to the extent included in adjusted 29
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gross income subject to the limitations and restrictions set forth 1
in subsection (9), (10), or (11), as applicable: 2
(i) Retirement or pension benefits received from a federal 3
public retirement system or from a public retirement system of or 4
created by this state or a political subdivision of this state. 5
(ii) Retirement or pension benefits received from a public 6
retirement system of or created by another state or any of its 7
political subdivisions if the income tax laws of the other state 8
permit a similar deduction or exemption or a reciprocal deduction 9
or exemption of a retirement or pension benefit received from a 10
public retirement system of or created by this state or any of the 11
political subdivisions of this state. 12
(iii) Social Security benefits as defined in section 86 of the 13
internal revenue code. 14
(iv) Beginning on and after January 1, 2007, 2025, retirement 15
or pension benefits not deductible under subparagraph (i) or 16
subdivision (e) from any other retirement or pension system or 17
benefits from a retirement annuity policy in which payments are 18
made for life to a senior citizen, to a maximum of $42,240.00 19
$65,897.00 for a single return and $84,480.00 $131,794.00 for a 20
joint return. The maximum amounts allowed under this subparagraph 21
shall be reduced by the amount of the deduction for retirement or 22
pension benefits claimed under subparagraph (i) or subdivision (e) 23
and by the amount of a deduction claimed under subdivision (p). For 24
the 2008 2026 tax year and each tax year after 2008, 2026, the 25
maximum amounts allowed under this subparagraph shall be adjusted 26
by the percentage increase in the United States Consumer Price 27
Index for the immediately preceding calendar year. The department 28
shall annualize the amounts provided in this subparagraph as 29
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necessary. 1
(v) The amount determined to be the section 22 amount eligible 2
for the elderly and the permanently and totally disabled credit 3
provided in section 22 of the internal revenue code. 4
(g) Adjustments resulting from the application of section 271. 5
(h) Adjustments with respect to estate and trust income as 6
provided in section 36. 7
(i) Adjustments resulting from the allocation and 8
apportionment provisions of chapter 3. 9
(j) Deduct the following payments made by the taxpayer in the 10
tax year: 11
(i) The amount of a charitable contribution made to the advance 12
tuition payment fund created under section 9 of the Michigan 13
education trust act, 1986 PA 316, MCL 390.1429. 14
(ii) The amount of payment made under an advance tuition 15
payment contract as provided in the Michigan education trust act, 16
1986 PA 316, MCL 390.1421 to 390.1442. 17
(iii) The amount of payment made under a contract with a private 18
sector investment manager that meets all of the following criteria: 19
(A) The contract is certified and approved by the board of 20
directors of the Michigan education trust to provide equivalent 21
benefits and rights to purchasers and beneficiaries as an advance 22
tuition payment contract as described in subparagraph (ii). 23
(B) The contract applies only for a state institution of 24
higher education as defined in the Michigan education trust act, 25
1986 PA 316, MCL 390.1421 to 390.1442, or a community or junior 26
college in Michigan. 27
(C) The contract provides for enrollment by the contract's 28
qualified beneficiary in not less than 4 years after the date on 29
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which the contract is entered into. 1
(D) The contract is entered into after either of the 2
following: 3
(I) The purchaser has had the purchaser's offer to enter into 4
an advance tuition payment contract rejected by the board of 5
directors of the Michigan education trust, if the board determines 6
that the trust cannot accept an unlimited number of enrollees upon 7
an actuarially sound basis. 8
(II) The board of directors of the Michigan education trust 9
determines that the trust can accept an unlimited number of 10
enrollees upon an actuarially sound basis. 11
(k) If an advance tuition payment contract under the Michigan 12
education trust act, 1986 PA 316, MCL 390.1421 to 390.1442, or 13
another contract for which the payment was deductible under 14
subdivision (j) is terminated and the qualified beneficiary under 15
that contract does not attend a university, college, junior or 16
community college, or other institution of higher education, add 17
the amount of a refund received by the taxpayer as a result of that 18
termination or the amount of the deduction taken under subdivision 19
(j) for payment made under that contract, whichever is less. 20
(l) Deduct from the taxable income of a purchaser the amount 21
included as income to the purchaser under the internal revenue code 22
after the advance tuition payment contract entered into under the 23
Michigan education trust act, 1986 PA 316, MCL 390.1421 to 24
390.1442, is terminated because the qualified beneficiary attends 25
an institution of postsecondary education other than either a state 26
institution of higher education or an institution of postsecondary 27
education located outside this state with which a state institution 28
of higher education has reciprocity. 29
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(m) Add, to the extent deducted in determining adjusted gross 1
income, the net operating loss deduction under section 172 of the 2
internal revenue code. 3
(n) Deduct a net operating loss deduction for the taxable year 4
as determined under section 172 of the internal revenue code 5
subject to the modifications under section 172(b)(2) of the 6
internal revenue code and subject to the allocation and 7
apportionment provisions of chapter 3 for the taxable year in which 8
the loss was incurred. 9
(o) Deduct, to the extent included in adjusted gross income, 10
benefits from a discriminatory self-insurance medical expense 11
reimbursement plan. 12
(p) Beginning on and after January 1, 2007, 2025, subject to 13
any limitation provided in this subdivision, a taxpayer who is a 14
senior citizen may deduct to the extent included in adjusted gross 15
income, interest, dividends, and capital gains received in the tax 16
year not to exceed $9,420.00 $14,688.00 for a single return and 17
$18,840.00 $29,376.00 for a joint return. The maximum amounts 18
allowed under this subdivision shall be reduced by the amount of a 19
deduction claimed for retirement or pension benefits under 20
subdivision (e) or a deduction claimed under subdivision (f)(i), 21
(ii), (iv), or (v). For the 2008 2026 tax year and each tax year 22
after 2008, 2026, the maximum amounts allowed under this 23
subdivision shall be adjusted by the percentage increase in the 24
United States Consumer Price Index for the immediately preceding 25
calendar year. The department shall annualize the amounts provided 26
in this subdivision as necessary. The deduction under this 27
subdivision is not available to a senior citizen born after 1945. 28
(q) Deduct, to the extent included in adjusted gross income, 29
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all of the following: 1
(i) The amount of a refund received in the tax year based on 2
taxes paid under this part and any direct or indirect allocated 3
share of a refund received by a flow-through entity under part 4. 4
(ii) The amount of a refund received in the tax year based on 5
taxes paid under the city income tax act, 1964 PA 284, MCL 141.501 6
to 141.787. 7
(iii) The amount of a credit received in the tax year based on a 8
claim filed under sections 520 and 522 to the extent that the taxes 9
used to calculate the credit were not used to reduce adjusted gross 10
income for a prior year. 11
(r) Add the amount paid by the state on behalf of the taxpayer 12
in the tax year to repay the outstanding principal on a loan taken 13
on which the taxpayer defaulted that was to fund an advance tuition 14
payment contract entered into under the Michigan education trust 15
act, 1986 PA 316, MCL 390.1421 to 390.1442, if the cost of the 16
advance tuition payment contract was deducted under subdivision (j) 17
and was financed with a Michigan education trust secured loan. 18
(s) Deduct, to the extent included in adjusted gross income, 19
any amount, and any interest earned on that amount, received in the 20
tax year by a taxpayer who is a Holocaust victim as a result of a 21
settlement of claims against any entity or individual for any 22
recovered asset pursuant to the German act regulating unresolved 23
property claims, also known as Gesetz zur Regelung offener 24
Vermogensfragen, as a result of the settlement of the action 25
entitled In re: Holocaust victim assets litigation, CV-96-4849, CV-26
96-5161, and CV-97-0461 (E.D. NY), or as a result of any similar 27
action if the income and interest are not commingled in any way 28
with and are kept separate from all other funds and assets of the 29
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taxpayer. As used in this subdivision: 1
(i) "Holocaust victim" means a person, or the heir or 2
beneficiary of that person, who was persecuted by Nazi Germany or 3
any Axis regime during any period from 1933 to 1945. 4
(ii) "Recovered asset" means any asset of any type and any 5
interest earned on that asset, including, but not limited to, bank 6
deposits, insurance proceeds, or artwork owned by a Holocaust 7
victim during the period from 1920 to 1945, withheld from that 8
Holocaust victim from and after 1945, and not recovered, returned, 9
or otherwise compensated to the Holocaust victim until after 1993. 10
(t) Deduct all of the following: 11
(i) To the extent not deducted in determining adjusted gross 12
income, contributions made by the taxpayer in the tax year less 13
qualified withdrawals made in the tax year from education savings 14
accounts, calculated on a per education savings account basis, 15
pursuant to the Michigan education savings program act, 2000 PA 16
161, MCL 390.1471 to 390.1486, not to exceed a total deduction of 17
$5,000.00 for a single return or $10,000.00 for a joint return per 18
tax year. The amount calculated under this subparagraph for each 19
education savings account shall not be less than zero. 20
(ii) To the extent included in adjusted gross income, interest 21
earned in the tax year on the contributions to the taxpayer's 22
education savings accounts if the contributions were deductible 23
under subparagraph (i). 24
(iii) To the extent included in adjusted gross income, 25
distributions that are qualified withdrawals from an education 26
savings account to the designated beneficiary of that education 27
savings account. 28
(u) Add, to the extent not included in adjusted gross income, 29
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the amount of money withdrawn by the taxpayer in the tax year from 1
education savings accounts, not to exceed the total amount deducted 2
under subdivision (t) in the tax year and all previous tax years, 3
if the withdrawal was not a qualified withdrawal as provided in the 4
Michigan education savings program act, 2000 PA 161, MCL 390.1471 5
to 390.1486. This subdivision does not apply to withdrawals that 6
are less than the sum of all contributions made to an education 7
savings account in all previous tax years for which no deduction 8
was claimed under subdivision (t), less any contributions for which 9
no deduction was claimed under subdivision (t) that were withdrawn 10
in all previous tax years. 11
(v) A taxpayer who is a resident tribal member may deduct, to 12
the extent included in adjusted gross income, all nonbusiness 13
income earned or received in the tax year and during the period in 14
which an agreement entered into between the taxpayer's tribe and 15
this state pursuant to section 30c of 1941 PA 122, MCL 205.30c, is 16
in full force and effect. As used in this subdivision: 17
(i) "Business income" means business income as defined in 18
section 4 and apportioned under chapter 3. 19
(ii) "Nonbusiness income" means nonbusiness income as defined 20
in section 14 and, to the extent not included in business income, 21
all of the following: 22
(A) All income derived from wages whether the wages are earned 23
within the agreement area or outside of the agreement area. 24
(B) All interest and passive dividends. 25
(C) All rents and royalties derived from real property located 26
within the agreement area. 27
(D) All rents and royalties derived from tangible personal 28
property, to the extent the personal property is utilized within 29
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the agreement area. 1
(E) Capital gains from the sale or exchange of real property 2
located within the agreement area. 3
(F) Capital gains from the sale or exchange of tangible 4
personal property located within the agreement area at the time of 5
sale. 6
(G) Capital gains from the sale or exchange of intangible 7
personal property. 8
(H) All pension income and benefits, including, but not 9
limited to, distributions from a 401(k) plan, individual retirement 10
accounts under section 408 of the internal revenue code, or a 11
defined contribution plan, or payments from a defined benefit plan. 12
(I) All per capita payments by the tribe to resident tribal 13
members, without regard to the source of payment. 14
(J) All gaming winnings. 15
(iii) "Resident tribal member" means an individual who meets all 16
of the following criteria: 17
(A) Is an enrolled member of a federally recognized tribe. 18
(B) The individual's tribe has an agreement with this state 19
pursuant to section 30c of 1941 PA 122, MCL 205.30c, that is in 20
full force and effect. 21
(C) The individual's principal place of residence is located 22
within the agreement area as designated in the agreement under sub-23
subparagraph (B). 24
(w) Eliminate all of the following: 25
(i) Income from producing oil and gas to the extent included in 26
adjusted gross income. 27
(ii) Expenses of producing oil and gas to the extent deducted 28
in arriving at adjusted gross income. 29
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(x) Deduct all of the following: 1
(i) To the extent not deducted in determining adjusted gross 2
income, contributions made by the taxpayer in the tax year less 3
qualified withdrawals made in the tax year from an ABLE savings 4
account, pursuant to the Michigan achieving a better life 5
experience (ABLE) program act, 2015 PA 160, MCL 206.981 to 206.997, 6
not to exceed a total deduction of $5,000.00 for a single return or 7
$10,000.00 for a joint return per tax year. The amount calculated 8
under this subparagraph for an ABLE savings account shall not be 9
less than zero. 10
(ii) To the extent included in adjusted gross income, interest 11
earned in the tax year on the contributions to the taxpayer's ABLE 12
savings account if the contributions were deductible under 13
subparagraph (i). 14
(iii) To the extent included in adjusted gross income, 15
distributions that are qualified withdrawals from an ABLE savings 16
account to the designated beneficiary of that ABLE savings account. 17
(y) Add, to the extent not included in adjusted gross income, 18
the amount of money withdrawn by the taxpayer in the tax year from 19
an ABLE savings account, not to exceed the total amount deducted 20
under subdivision (x) in the tax year and all previous tax years, 21
if the withdrawal was not a qualified withdrawal as provided in the 22
Michigan achieving a better life experience (ABLE) program act, 23
2015 PA 160, MCL 206.981 to 206.997. This subdivision does not 24
apply to withdrawals that are less than the sum of all 25
contributions made to an ABLE savings account in all previous tax 26
years for which no deduction was claimed under subdivision (x), 27
less any contributions for which no deduction was claimed under 28
subdivision (x) that were withdrawn in all previous tax years. 29
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(z) Deduct, to the extent included in adjusted gross income, 1
compensation received in the tax year pursuant to the wrongful 2
imprisonment compensation act, 2016 PA 343, MCL 691.1751 to 3
691.1757. 4
(aa) For tax years that begin on and after January 1, 2025, a 5
taxpayer who is a disabled veteran may deduct, to the extent 6
included in adjusted gross income, income reported on a federal 7
income tax form 1099-C that is attributable to the cancellation or 8
discharge of a student loan by the United States Department of 9
Education pursuant to the total and permanent disability discharge 10
program, 34 CFR 685.213. As used in this subdivision, "disabled 11
veteran" means an individual who meets either of the following 12
criteria: 13
(i) Has been determined by the United States Department of 14
Veterans Affairs to be permanently and totally disabled as a result 15
of military service and entitled to veterans' benefits at the 100% 16
rate. 17
(ii) Has been rated by the United States Department of Veterans 18
Affairs as individually unemployable. 19
(bb) For tax years that begin on and after January 1, 2021, 20
and subject to the limitation under this subdivision, deduct, to 21
the extent not deducted in determining adjusted gross income, 22
wagering losses deducted under section 165(d) of the internal 23
revenue code on the taxpayer's federal income tax return for the 24
same tax year. For a nonresident, only wagering losses that are 25
attributable to wagering transactions placed at or through a casino 26
or licensed race meeting located in this state may be deducted and 27
must not exceed the gains on wagering transactions allocated to 28
this state under section 110(2)(d). As used in this subdivision, 29
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"casino" and "licensed race meeting" mean those terms as defined in 1
section 110. 2
(cc) Except as otherwise provided under subparagraph (i), for 3
tax years that begin on and after January 1, 2022, deduct all of 4
the following: 5
(i) To the extent not deducted in determining adjusted gross 6
income, contributions made by the taxpayer in the tax year less 7
qualified withdrawals made in the tax year from a first-time home 8
buyer savings account, pursuant to the Michigan first-time home 9
buyer savings program act, 2022 PA 6, MCL 565.1001 to 565.1013, not 10
to exceed a total deduction of $5,000.00 for a single return or 11
$10,000.00 for a joint return per tax year. The amount calculated 12
under this subparagraph for a first-time home buyer savings account 13
shall not be less than zero. The deduction under this subparagraph 14
does not apply for tax years that begin after December 31, 2026. 15
(ii) To the extent not deducted in determining adjusted gross 16
income, interest earned in the tax year on the contributions to the 17
taxpayer's first-time home buyer savings account. 18
(iii) To the extent included in adjusted gross income, 19
distributions that are qualified withdrawals from a first-time home 20
buyer savings account to the qualified beneficiary of that savings 21
account. 22
(dd) For tax years that begin on and after January 1, 2022, 23
add, to the extent not included in adjusted gross income, the 24
amount of money withdrawn by the taxpayer in the tax year from a 25
first-time home buyer savings account, not to exceed the total 26
amount deducted under subdivision (cc) in the tax year and all 27
previous tax years, if the withdrawal was not a qualified 28
withdrawal as provided in the Michigan first-time home buyer 29
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savings program act, 2022 PA 6, MCL 565.1001 to 565.1013. This 1
subdivision does not apply to withdrawals that are less than the 2
sum of all contributions made to a first-time home buyer savings 3
account in all previous tax years for which no deduction was 4
claimed under subdivision (cc), less any contributions for which no 5
deduction was claimed under subdivision (cc) that were withdrawn in 6
all previous tax years. 7
(ee) Subject to the limitations under this subdivision, for 8
tax years beginning after December 31, 2025 and before January 1, 9
2029, deduct, to the extent not deducted in determining adjusted 10
gross income, an amount equal to the sum of the following 11
deductions allowed to be claimed on the taxpayer's federal income 12
tax return for the same tax year: 13
(i) Qualified tips under section 224 of the internal revenue 14
code. For a nonresident, only qualified tips that are attributable 15
to services performed in this state may be deducted. 16
(ii) Qualified overtime compensation under section 225 of the 17
internal revenue code. For a nonresident, only qualified overtime 18
compensation that is attributable to services performed in this 19
state may be deducted. 20
(ff) For tax years beginning after December 31, 2024, adjusted 21
gross income must be calculated as if both of the following 22
conditions applied, subject to any necessary adjustments under 23
subparagraph (iii): 24
(i) Sections 168(n) and 174A of the internal revenue code were 25
not in effect. 26
(ii) Sections 163(j), 168(k), 174, and 179 of the internal 27
revenue code applied as those provisions were in effect on December 28
31, 2024. 29
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(iii) The state treasurer shall, if necessary, modify the 1
application of any references in the internal revenue code to the 2
sections identified in subparagraphs (i) and (ii) in a reasonable 3
manner to carry out the purpose of this subdivision, including, but 4
not limited to, modifying the application of section references 5
that were amended under Public Law 119-21. 6
(gg) For tax years beginning after December 31, 2021, adjusted 7
gross income must be calculated as if the transition rules under 8
section 70302 of Public Law 119-21, including, but not limited to, 9
any provisions related to the application of section 174A of the 10
internal revenue code, do not apply. 11
(hh) For tax years beginning on and after January 1, 2026, 12
deduct contributions made during the tax year by the taxpayer into 13
a Trump account created under section 530A of the internal revenue 14
code, to a maximum of $5,000.00, for any tax year before the 15
calendar year in which the account beneficiary attains the age of 16
18. As used in this subdivision, "account beneficiary" and "Trump 17
account" mean those terms as defined under section 530A of the 18
internal revenue code. 19
(2) Except as otherwise provided in subsection (7), and 20
section 30a, a personal exemption of $3,700.00 multiplied by the 21
number of personal and dependency exemptions shall be subtracted in 22
the calculation that determines taxable income. The number of 23
personal and dependency exemptions allowed shall be determined as 24
follows: 25
(a) Each taxpayer may claim 1 personal exemption. However, if 26
a joint return is not made by the taxpayer and the taxpayer's 27
spouse, the taxpayer may claim a personal exemption for the spouse 28
if the spouse, for the calendar year in which the taxable year of 29
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the taxpayer begins, does not have any gross income and is not the 1
dependent of another taxpayer. 2
(b) A taxpayer may claim a dependency exemption for each 3
individual who is a dependent of the taxpayer for the tax year. 4
(c) A taxpayer may claim an additional exemption under this 5
subsection in the tax year for which the taxpayer has a certificate 6
of stillbirth from the department of health and human services as 7
provided under section 2834 of the public health code, 1978 PA 368, 8
MCL 333.2834. 9
(3) Except as otherwise provided in subsection (7), a single 10
additional exemption determined as follows shall be subtracted in 11
the calculation that determines taxable income in each of the 12
following circumstances: 13
(a) $1,800.00 for each taxpayer and every dependent of the 14
taxpayer who is a deaf person as defined in section 2 of the deaf 15
persons' interpreters act, 1982 PA 204, MCL 393.502; a paraplegic, 16
a quadriplegic, or a hemiplegic; a person who is blind as defined 17
in section 504; or a person who is totally and permanently disabled 18
as defined in section 522. When a dependent of a taxpayer files an 19
annual return under this part, the taxpayer or dependent of the 20
taxpayer, but not both, may claim the additional exemption allowed 21
under this subdivision. 22
(b) For tax years beginning after 2007, $250.00 for each 23
taxpayer and every dependent of the taxpayer who is a qualified 24
disabled veteran. When a dependent of a taxpayer files an annual 25
return under this part, the taxpayer or dependent of the taxpayer, 26
but not both, may claim the additional exemption allowed under this 27
subdivision. As used in this subdivision: 28
(i) "Qualified disabled veteran" means a veteran with a 29
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service-connected disability. 1
(ii) "Service-connected disability" means a disability incurred 2
or aggravated in the line of duty in the active military, naval, or 3
air service as described in 38 USC 101(16). 4
(iii) "Veteran" means an individual who served in the active 5
military, naval, marine, coast guard, or air service and who was 6
discharged or released from the individual's service with an 7
honorable or general discharge. 8
(4) An individual with respect to whom a deduction under 9
subsection (2) is allowable to another taxpayer during the tax year 10
is not entitled to an exemption for purposes of subsection (2), but 11
may subtract $1,500.00 in the calculation that determines taxable 12
income for a tax year. 13
(5) A nonresident or a part-year resident is allowed that 14
proportion of an exemption or deduction allowed under subsection 15
(2), (3), or (4) that the taxpayer's portion of adjusted gross 16
income from Michigan sources bears to the taxpayer's total adjusted 17
gross income. 18
(6) In calculating taxable income, a taxpayer shall not 19
subtract from adjusted gross income the amount of prizes won by the 20
taxpayer under the McCauley-Traxler-Law-Bowman-McNeely lottery act, 21
1972 PA 239, MCL 432.1 to 432.47. 22
(7) For each tax year beginning on and after January 1, 2013, 23
the personal exemption allowed under subsection (2) shall be 24
adjusted by multiplying the exemption for the tax year beginning in 25
2012 by a fraction, the numerator of which is the United States 26
Consumer Price Index for the state fiscal year ending in the tax 27
year prior to the tax year for which the adjustment is being made 28
and the denominator of which is the United States Consumer Price 29
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Index for the 2010-2011 state fiscal year. For the 2022 tax year 1
and each tax year after 2022, the adjusted amount determined under 2
this subsection shall be increased by an additional $600.00. The 3
resultant product shall be rounded to the nearest $100.00 4
increment. For each tax year, the exemptions allowed under 5
subsection (3) shall be adjusted by multiplying the exemption 6
amount under subsection (3) for the tax year by a fraction, the 7
numerator of which is the United States Consumer Price Index for 8
the state fiscal year ending the tax year prior to the tax year for 9
which the adjustment is being made and the denominator of which is 10
the United States Consumer Price Index for the 1998-1999 state 11
fiscal year. The resultant product shall be rounded to the nearest 12
$100.00 increment. 13
(8) As used in this section, "retirement or pension benefits" 14
means distributions from all of the following: 15
(a) Except as provided in subdivision (d), qualified pension 16
trusts and annuity plans that qualify under section 401(a) of the 17
internal revenue code, including all of the following: 18
(i) Plans for self-employed persons, commonly known as Keogh or 19
HR10 plans. 20
(ii) Individual retirement accounts that qualify under section 21
408 of the internal revenue code if the distributions are not made 22
until the participant has reached 59-1/2 years of age, except in 23
the case of death, disability, or distributions described by 24
section 72(t)(2)(A)(iv) of the internal revenue code. 25
(iii) Employee annuities or tax-sheltered annuities purchased 26
under section 403(b) of the internal revenue code by organizations 27
exempt under section 501(c)(3) of the internal revenue code, or by 28
public school systems. 29
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(iv) Distributions from a 401(k) plan attributable to employee 1
contributions mandated by the plan or attributable to employer 2
contributions. 3
(b) The following retirement and pension plans not qualified 4
under the internal revenue code: 5
(i) Plans of the United States, state governments other than 6
this state, and political subdivisions, agencies, or 7
instrumentalities of this state. 8
(ii) Plans maintained by a church or a convention or 9
association of churches. 10
(iii) All other unqualified pension plans that prescribe 11
eligibility for retirement and predetermine contributions and 12
benefits if the distributions are made from a pension trust. 13
(c) Retirement or pension benefits received by a surviving 14
spouse if those benefits qualified for a deduction prior to the 15
decedent's death. Benefits received by a surviving child are not 16
deductible. 17
(d) Retirement and pension benefits do not include: 18
(i) Amounts received from a plan that allows the employee to 19
set the amount of compensation to be deferred and does not 20
prescribe retirement age or years of service. These plans include, 21
but are not limited to, all of the following: 22
(A) Deferred compensation plans under section 457 of the 23
internal revenue code. 24
(B) Distributions from plans under section 401(k) of the 25
internal revenue code other than plans described in subdivision 26
(a)(iv). 27
(C) Distributions from plans under section 403(b) of the 28
internal revenue code other than plans described in subdivision 29
20
KAS S06499'26_SB0911_INTR_1 j2bu5o
(a)(iii). 1
(ii) Premature distributions paid on separation, withdrawal, or 2
discontinuance of a plan prior to the earliest date the recipient 3
could have retired under the provisions of the plan. 4
(iii) Payments received as an incentive to retire early unless 5
the distributions are from a pension trust. 6
(9) Except as otherwise provided in subsection (10) or (11), 7
in determining taxable income under this section, the following 8
limitations and restrictions apply: 9
(a) For a person born before 1946, this subsection provides no 10
additional restrictions or limitations under subsection (1)(f). 11
(b) Except as otherwise provided in subdivision (c), for a 12
person born in 1946 through 1952, the sum of the deductions under 13
subsection (1)(f)(i), (ii), and (iv) is limited to $20,000.00 for a 14
single return and $40,000.00 for a joint return. After that person 15
reaches the age of 67, the deductions under subsection (1)(f)(i), 16
(ii), and (iv) do not apply and that person is eligible for a 17
deduction of $20,000.00 for a single return and $40,000.00 for a 18
joint return, which deduction is available against all types of 19
income and is not restricted to income from retirement or pension 20
benefits. A person who takes the deduction under subsection (1)(e) 21
is not eligible for the unrestricted deduction of $20,000.00 for a 22
single return and $40,000.00 for a joint return under this 23
subdivision. 24
(c) Beginning January 1, 2013 for a person born in 1946 25
through 1952 and beginning January 1, 2018 for a person born after 26
1945 who has retired as of January 1, 2013, if that person receives 27
retirement or pension benefits from employment with a governmental 28
agency that was not covered by the federal social security act, 42 29
21
KAS S06499'26_SB0911_INTR_1 j2bu5o
USC 301 to 1397mm, the sum of the deductions under subsection 1
(1)(f)(i), (ii), and (iv) is limited to $35,000.00 for a single return 2
and, except as otherwise provided under this subdivision, 3
$55,000.00 for a joint return. If both spouses filing a joint 4
return receive retirement or pension benefits from employment with 5
a governmental agency that was not covered by the federal social 6
security act, 42 USC 301 to 1397mm, the sum of the deductions under 7
subsection (1)(f)(i), (ii), and (iv) is limited to $70,000.00 for a 8
joint return. After that person reaches the age of 67, the 9
deductions under subsection (1)(f)(i), (ii), and (iv) do not apply and 10
that person is eligible for a deduction of $35,000.00 for a single 11
return and $55,000.00 for a joint return, or $70,000.00 for a joint 12
return if applicable, which deduction is available against all 13
types of income and is not restricted to income from retirement or 14
pension benefits. A person who takes the deduction under subsection 15
(1)(e) is not eligible for the unrestricted deduction of $35,000.00 16
for a single return and $55,000.00 for a joint return, or 17
$70,000.00 for a joint return if applicable, under this 18
subdivision. 19
(d) Except as otherwise provided under subdivision (c) for a 20
person who was retired as of January 1, 2013, for a person born 21
after 1952 who has reached the age of 62 through 66 years of age 22
and who receives retirement or pension benefits from employment 23
with a governmental agency that was not covered by the federal 24
social security act, 42 USC 301 to 1397mm, the sum of the 25
deductions under subsection (1)(f)(i), (ii), and (iv) is limited to 26
$15,000.00 for a single return and, except as otherwise provided 27
under this subdivision, $15,000.00 for a joint return. If both 28
spouses filing a joint return receive retirement or pension 29
22
KAS S06499'26_SB0911_INTR_1 j2bu5o
benefits from employment with a governmental agency that was not 1
covered by the federal social security act, 42 USC 301 to 1397mm, 2
the sum of the deductions under subsection (1)(f)(i), (ii), and (iv) 3
is limited to $30,000.00 for a joint return. 4
(e) Except as otherwise provided under subdivision (c) or (d), 5
for a person born after 1952, the deduction under subsection 6
(1)(f)(i), (ii), or (iv) does not apply. When that person reaches the 7
age of 67, that person is eligible for a deduction of $20,000.00 8
for a single return and $40,000.00 for a joint return, which 9
deduction is available against all types of income and is not 10
restricted to income from retirement or pension benefits. For tax 11
years that begin before January 1, 2026 and after December 31, 12
2028, if a person takes the deduction of $20,000.00 for a single 13
return and $40,000.00 for a joint return, that person shall not 14
take the deduction under subsection (1)(f)(iii) and shall not take 15
the personal exemption under subsection (2). For tax years that 16
begin before January 1, 2026 and after December 31, 2028, that 17
person may elect not to take the deduction of $20,000.00 for a 18
single return and $40,000.00 for a joint return and elect to take 19
the deduction under subsection (1)(f)(iii) and the personal exemption 20
under subsection (2) if that election would reduce that person's 21
tax liability. For tax years that begin on and after January 1, 22
2026 and before January 1, 2029, if a person takes the deduction of 23
$20,000.00 for a single return or $40,000.00 for a joint return, 24
that person shall not take the personal exemption under subsection 25
(2). A person who takes the deduction under subsection (1)(e) is 26
not eligible for the unrestricted deduction of $20,000.00 for a 27
single return and $40,000.00 for a joint return under this 28
subdivision. 29
23
KAS S06499'26_SB0911_INTR_1 j2bu5o
(f) For a joint return, the limitations and restrictions in 1
this subsection shall be applied based on the date of birth of the 2
older spouse filing the joint return. If a deduction under 3
subsection (1)(f) was claimed on a joint return for a tax year in 4
which a spouse died and the surviving spouse has not remarried 5
since the death of that spouse, the surviving spouse is entitled to 6
claim the deduction under subsection (1)(f) in subsequent tax years 7
subject to the same restrictions and limitations, for a single 8
return, that would have applied based on the date of birth of the 9
older of the 2 spouses. For tax years beginning after December 31, 10
2019, a surviving spouse born after 1945 who has reached the age of 11
67 and has not remarried since the death of that spouse may elect 12
to take the deduction that is available against all types of income 13
subject to the same limitations and restrictions as provided under 14
this subsection based on the surviving spouse's date of birth 15
instead of taking the deduction allowed under subsection (1)(f), 16
for a single return, based on the date of birth of the older 17
spouse. 18
(10) In determining taxable income under this section, a 19
taxpayer may elect to deduct retirement or pension benefits as 20
provided under subsection (1)(f) with the following limitations and 21
restrictions or elect to apply the limitations and restrictions in 22
subsection (9), or subsection (11) if applicable: 23
(a) For the 2023 tax year, a taxpayer who was born after 1945 24
and before 1959 may deduct an amount of retirement or pension 25
benefits not to exceed 25% of the maximum amount of retirement or 26
pension benefits that the taxpayer would be allowed to deduct for 27
the tax year under subsection (1)(f)(iv) if the taxpayer's 28
retirement or pension benefits were subject to the limitations of 29
24
KAS S06499'26_SB0911_INTR_1 j2bu5o
that subsection only. 1
(b) For the 2024 tax year, a taxpayer who was born after 1945 2
and before 1963 may deduct an amount of retirement or pension 3
benefits not to exceed 50% of the maximum amount of retirement or 4
pension benefits that the taxpayer would be allowed to deduct for 5
the tax year under subsection (1)(f)(iv) if the taxpayer's 6
retirement or pension benefits were subject to the limitations of 7
that subsection only. 8
(c) For the 2025 tax year, a taxpayer who was born after 1945 9
and before 1967 may deduct an amount of retirement or pension 10
benefits not to exceed 75% of the maximum amount of retirement or 11
pension benefits that the taxpayer would be allowed to deduct for 12
the tax year under subsection (1)(f)(iv) if the taxpayer's 13
retirement or pension benefits were subject to the limitations of 14
that subsection only. 15
(d) For the 2026 tax year and each tax year after 2026, a 16
taxpayer may deduct retirement or pension benefits as provided 17
under subsection (1)(f), except that the amounts deductible under 18
subsection (1)(f)(i) and (ii) combined are subject to the same 19
maximum amounts allowed under subsection (1)(f)(iv) for a single 20
return and a joint return for that same tax year. 21
(e) For a joint return, the limitations and restrictions in 22
this subsection shall be applied based on the date of birth of the 23
older spouse filing the joint return. If a deduction under 24
subsection (1)(f) was claimed on a joint return for a tax year in 25
which a spouse died and the surviving spouse has not remarried 26
since the death of that spouse, the surviving spouse is entitled to 27
claim the deduction under subsection (1)(f) in subsequent tax years 28
subject to the same restrictions and limitations under this 29
25
KAS S06499'26_SB0911_INTR_1 j2bu5o
subsection, for a single return, that would have applied based on 1
the date of birth of the older of the 2 spouses. 2
(11) For tax years beginning on and after January 1, 2023, in 3
determining taxable income under this section, a taxpayer with 4
retirement or pension benefits received for services as a public 5
police or fire department employee subject to 1969 PA 312, MCL 6
423.231 to 423.247, a state police trooper or state police sergeant 7
subject to 1980 PA 17, MCL 423.271 to 423.287, or a corrections 8
officer employed by a county sheriff in a county jail, work camp, 9
or other facility maintained by a county that houses adult 10
prisoners may elect to deduct retirement or pension benefits as 11
provided under subsection (1)(f) without any additional limitations 12
or restrictions or elect to apply the limitations and restrictions 13
in subsection (9) or (10). 14
(12) As used in this section: 15
(a) "Oil and gas" means oil and gas subject to severance tax 16
under 1929 PA 48, MCL 205.301 to 205.317. 17
(b) "Senior citizen" means that term as defined in section 18
514. 19
(c) "United States Consumer Price Index" means the United 20
States Consumer Price Index for all urban consumers as defined and 21
reported by the United States Department of Labor, Bureau of Labor 22
Statistics. 23
Sec. 51i. (1) The Michigan Trump account contribution fund is 24
created within the state treasury. The state treasurer may receive 25
money or other assets from any source for deposit into the Michigan 26
Trump account contribution fund. The state treasurer shall direct 27
the investment of the Michigan Trump account contribution fund. The 28
state treasurer shall credit to the Michigan Trump account 29
26
KAS S06499'26_SB0911_INTR_1 j2bu5o
contribution fund interest and earnings from those fund 1
investments. 2
(2) Money in the Michigan Trump account contribution fund at 3
the close of the fiscal year shall remain in that fund and shall 4
not lapse to the general fund. However, any money in the Michigan 5
Trump account contribution fund after all contributions have been 6
made in accordance with this section shall lapse to the general 7
fund at the close of the 2028-2029 state fiscal year. 8
(3) The department shall be the administrator of the Michigan 9
Trump account contribution fund. 10
(4) The department shall expend money from the Michigan Trump 11
account contribution fund to make a matching qualified general 12
contribution to the Trump account of an eligible child who is the 13
account beneficiary upon request in a form as prescribed by the 14
department and upon proof to the department of all of the 15
following: 16
(a) A payment to the Trump account has been made as provided 17
under section 6434 of the internal revenue code. 18
(b) The eligible child was born in this state and resides in 19
this state at the time of the department's contribution. 20
(c) The amount of the contribution under this section must be 21
equal to the amount of the payment made to the Trump account under 22
section 6434 of the internal revenue code or $1,000.00, whichever 23
is less. 24
(5) In addition to the other distributions under this part, 25
beginning with the 2026-2027 state fiscal year through the 2028-26
2029 state fiscal year, from the revenue collected under this part 27
$100,000,000.00 is appropriated to and deposited in the Michigan 28
Trump account contribution fund created under this section. 29
27
Final Page
KAS S06499'26_SB0911_INTR_1 j2bu5o
(6) As used in this section: 1
(a) "Account beneficiary", "qualified general contribution", 2
and "Trump account" mean those terms as defined under section 530A 3
of the internal revenue code. 4
(b) "Eligible child" means that term as defined under section 5
6434 of the internal revenue code. 6