Tax deductions

Lauwers co-sponsors new legislation for tax deductions for seniors


State Senator Dan Lauwers, a Republican from Brockway Township, co-sponsored new legislation that would provide tax relief for seniors.

Senate Bill 359 would change the Michigan pension tax deduction to allow all residents 67 years of age or older a deduction from all income, not just pensions. This would remove all limits on taxation and see these residents pay no income tax in the state.

“Michigan’s seniors have worked hard their entire lives and deserve to live out their golden years free of excessive taxes,” Lauwers said in a statement. “This bill provides tax relief that seniors deserve.


The expanded deduction would follow the cap already provided by law, which for the 2020 tax year is $ 53,759 for single or married tax filers filing separately and $ 107,517 for joint tax filers.

The deduction would remain linked to the consumer price index and would be adjusted accordingly each year, which is part of the current law.

The law does not discriminate as to whether a person aged 67 or over who claims these deductions is working or not, although the assumption in current law is that seniors are likely to live off their retirement income.

Lauwers said part of the reason for these changes is that he has encountered retirees with pensions across the state who are unsure of how state taxation on pensions works, saying that they will leave the state so as not to have to pay income tax. .

Lauwers often explained to them how the system actually works, explaining that they are always surprised to say that they don’t pay as much.

“There is no reason for retirees to leave the state for tax relief,” Lauwers said. “It makes things simpler than there is no limit. “

The bill was referred to the Senate Finance Committee before it could be put to a vote. Lauwers believes it will be a few weeks before the committee votes on these changes.


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