LANSING, Mich. (WZMQ) – While filing your taxes this year, you’ll notice a few new programs introduced by the state. Governor Gretchen Whitmer’s ‘Lowering MI Costs’ plan goes into effect on February 13th and will introduce some changes to the state’s Earned Income Tax Credit (EITC) and retirement tax.
Sarah Rusnell works in outreach with the Michigan Treasury, she explained that two major changes to tax preparations this year could give more money back to Michiganders, both are a part of the Lowering MI Costs plan passed last year, the first change is the rollback of the retirement tax which will affect people receiving pension or retirement benefits.
“What this law change did was give our retirees in Michigan more options for tax treatment on their retirement or pension benefits,” Rusnell said. “We are excited about all of the money on the table and available for our individuals filing this season.”
This change has a four-year phase-in, which begins with this tax season. Alongside several other tax resources, the treasury website now has a pension calculator to help determine the best taxing situation for your benefits.
The second change is an increase in the Michigan Earned Income Tax Credit, from 6% to 30%.
Rusnell explained that the 2023 Michigan EITC can be up to $2,081, and the federal return as much as $7,000.
“Combined federal and state, there are thousands of dollars that folks who qualify for the earned income tax credit can take advantage of when they file their tax return,” Rusnell said. “filers do not need to wait to take advantage of that expanded credit. they can file right now.”
The EITC is mostly for working individuals or couples filing with dependants, though some disabilities can also make you eligible. The increase is also retroactive to 2022, so if you filed for the EITC durring the last tax season, you’ll receive a check for the change once the law goes into effect on the 13th.
Also starting this year, you can sign up to become an organ donor through Michigan Gift of Life when filing taxes.
Rusnell said that with all of the changes, taking advantage of digital filing or checking to see if you might be eligible for free tax help is a great way to make sure you don’t miss out on those benefits this tax season. The Michigan treasury has all the qualifications for those tax changes and preparation assistance on its website Michigan.gov/taxes and MichiganFreeTaxHelp.org
