Governor Whitmer Calls for Huge New Tax Cut for Seniors The Michigan governor’s proposed budget would cut taxes on pension income, saving about 500,000 retirees roughly $1,000 a year, and restore tax deductions on other retirement income.
By Main Street Sentinel Staff
Michigan Governor Gretchen Whitmer’s proposed budget would deliver huge new tax cuts to seniors. Whitmer recently outlined a plan to cut taxes on public pensions and reinstate deductions for private retirement income, saying that the changes would put money back into the pockets of retirees and help them afford essentials like prescriptions, rent, utilities, and car payments.
The Detroit Free Press reported that the tax cuts on private pensions would be phased in over three years, starting with a 25 percent reduction for retirees age 65 and older, with age eligibility decreasing until the plan is fully implemented in 2025. Once in place, the plan would save roughly 500,000 seniors about $1,000 annually. Whitmer’s plan would also restore tax deductions for other retirement income, including private pensions, IRAs, and 401ks.
AARP Michigan Director Paula D. Cunningham said: “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.”
She continued: “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. 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.”