Michigan Senate Passes Tax Cut Legislation

According to a report in Gongwer, Senate Republicans unanimously passed legislation to increase the personal exemption for taxpayers.  SB 748 increases the personal exemption to $5,000 by 2021. The legislation is designed to avoid an unintended $1.5 billion windfall for the state in response to the new federal tax law, which would eliminate the current $4,000 Michigan income tax personal exemption for taxpayers and dependents, an exemption tied to the federal personal exemption, which will end under the new law. The estimated cost of the tax cut is $210 million, with the average cut for a family of four being about $125.

The Michigan House Tax Policy Committee also has their version of the tax cut, which raises the personal exemption to $4,800 and create a $100 tax credit for seniors 62 and older. Both plans provide deeper tax cuts than the increase to a $4,500 personal exemption by 2021 Governor Rick Snyder has proposed.

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