LANSING, Mich. — The Michigan Legislature on Wednesday passed a bill sponsored by Sen. Jack Brandenburg that would restore the Michigan personal tax exemption lost in the recent federal tax reform and would reduce income taxes overall for Michigan families.
Senate Bill 748 avoids a tax hike on Michigan families of nearly $1.5 billion by maintaining the state’s personal exemption. It also increases the exemption by $600 through 2021 for a total of $4,900 that year. The deduction would then remain tied to inflation. Currently, the state personal tax exemption is only scheduled to increase from $4,000 to $4,300 over the next three years.
“This is a huge win for Michigan taxpayers,” said Brandenburg. “It’s been more than 20 years since we’ve seen any significant tax relief, so clearly this is long overdue.”
Michigan’s current state income tax law ties Michigan’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. Once fully phased-in, the relief will mean Michigan income tax savings of more than $150 per year for a family of four.
“Tax relief is something that I’ve been working on since I came to Lansing fifteen years ago,” Brandenburg said. “My Republican colleagues and I made some tremendous economic improvements in that time, but this is one of the bills I’m most proud of because it directly makes people’s wallets thicker.”
SB 748 will now go to Gov. Snyder for his signature into law. The bill would go into immediate effect upon the governor’s signature.