LANSING, Mich. — Legislation co-sponsored by Sen. Tonya Schuitmaker would ensure state and local exemptions remain in place despite recent changes on the federal level.
“The recent federal changes were largely welcomed in my district, though many have shown some confusion or uncertainty as to what the federal changes may mean for next year’s taxes,” said Schuitmaker, R-Lawton. “These measures will ensure Michigan residents are able to claim the personal exemption on their state and local income taxes.”
The federal Tax Cuts and Jobs Act, in addition to lowering income tax rates, included a process that set the federal personal exemption to zero. Though the exemption is not explicitly eliminated by the new law, Michigan’s current state income tax law ties the state’s personal exemptions to the federal number of exemptions. Without a revision to the law, Michigan taxpayers would no longer be able to claim the personal exemptions on their state taxes.
SB 748 would also increase the state’s personal exemption to $4,900 by 2021. In 2018, the exemption would be $4,050. It would increase to $4,400 in 2019, to $4,750 in 2020 and finally to $4,900 in 2021.
“These bills allow residents to keep these much-needed, and much-deserved exemptions,” Schuitmaker said. “When coupled with the recent federal tax reforms, Michiganders should be able to start putting more of their hard-earned money in their pockets.”
The bills will now go to Gov. Rick Snyder for further consideration.