Rolling back tax on seniors would save half a million Michigander an average of $1,000 a year
Photo by Dapo Abideen from Pexels
REDFORD, Mich. — Recently, Governor Gretchen Whitmer proposed a repeal of the retirement tax in her State of the State address. Rolling back this tax on retirement income, including pensions, 401(k) accounts and IRAs would save half a million households $1,000 a year.
“Repealing the retirement tax will put Michiganders first and save half a million households $1,000 a year,” said Whitmer. “Michiganders who have worked hard, played by the rules and budgeted for their whole lives should be able to retire and keep all of their hard-earned dollars. Putting money back in the pockets of retirees will help them afford the essentials from prescriptions, rent, utilities, car payments, to gifts for their grandkids.”
“The repeal of the pension tax has been a priority of Michigan’s labor movement since former Governor Snyder first taxed Michiganders’ pensions,” said Ron Bieber, president of the Michigan AFL-CIO.
“Retirees across our great state are so grateful to have Governor Gretchen Whitmer as their champion, always prioritizing their dignity and the safety of the pensions they earned,” Bieber added.
“We support the governor’s call to phase out the retirement tax that so egregiously pulled the rug out from under a large swath of retirees who planned and counted on a pension not diminished by taxation,” said AARP Michigan Director Paula D. Cunningham.
“Michiganders who have worked hard, played by the rules and paid their dues deserve to retire with dignity, but too many have been forced to go back to work to pay the bills,” Cunningham added. “We urge state legislators to do the right thing by repealing this law and help build Michigan’s reputation as the first ‘age-friendly’ state in the Midwest.”
“Many Michigan educators planned and saved for their retirement with the expectation that their pensions would be tax-free, as promised,” said Paula Herbart, Michigan Education Association president and veteran music teacher in Macomb County.
“The retirement tax was an unfair tax hike on retirees, and we strongly support Governor Whitmer’s plan to repeal it,” Herbart added. “Retired educators and school support staff held up their end of the bargain through a lifetime of service to our students and families. Now it’s time for state legislators to do the right thing and eliminate this burden unjustly placed on retirees.”
“Repealing the retirement tax would put money back in my pocket and allow me to spend more time with my loved ones,” said Clara B. Williams retired Michigander.
“After working for decades, budgeting every month, and saving for years, I deserve to keep all my pension. I support Governor Whitmer’s proposal to roll back the retirement tax,” Williams added.
The Plan
Whitmer is proposing a rollback of the retirement tax, which would save half a million households with pensions an average of $1,000 a year.
Over the coming years, Whitmer’s proposal would again exempt public pensions and restore deductions for private retirement income, including private-sector pensions, withdrawals from individual retirement accounts (IRAs) and the portion of a 401k account that is subject to an employer match.
