State of Michigan Tax Changes for the

2024 Tax season

Exemptions

The personal exemption allowance for tax year 2023 is $5,400. If someone else can claim you as a dependent, the exemption is $1,500.

GAMBLING LOSSES

Dividend & Interest Deduction

For 2023, taxpayers may be eligible to deduct gambling losses that were claimed as an itemized deduction on their federal return as a subtraction on their Michigan tax return.

The Dividend/Interest/Capital Gains Deduction is available for taxpayers born prior to 1946. This subtraction is limited to $12,697 for single or married filing separately filers or $25,394 for joint filers.

Homestead Property Tax Credit

Taxpayers with total household resources above $67,300 and a home with a taxable value over $154,000 will no longer be eligible to receive the credit. For 2023, the maximum Homestead Property Tax allowed is $1,700.

Household income, for purposes of calculating this credit, will exclude losses from business, rentals and royalties and net operating losses.

Earned Income Credit

FIRST-TIME HOME BUYER SAVINGS PROGRAM

If you are eligible to claim a Federal Earned Income Tax Credit, you will be eligible to claim a Michigan Earned Income Tax Credit. The credit is equal 30% of your Federal Earned Income Tax Credit. Prior to 2023 taxpayers were eligible to receive a 6% credit.

The First-Time Savings Program deduction of $5,000 (single) or $10,000 (joint) may be claimed for contributions made to a first-time homebuyer savings account during tax years 2022 - 2026.

Statute of Limitations

A taxpayer may file and claim a refund to the State of Michigan within four years from the date set for the filing of the original return. For example, you must file a 2019 Michigan Individual Income Tax Return and/or Homestead Property Tax Credit on or before April 15, 2024.

PENSION DEDUCTION

Taxpayers born before 1946 may subtract all public and private pensions up to $56,961for single or married filing separately filers and $113,922 for joint filers.

Taxpayers born during the period January 1, 1946 through December 31, 1952 are allowed to subtract $20,000 against all income for single filers and $40,000 for joint filers.

Taxpayers born during the period January 1, 1953 through January 1, 1956 may subtract retirement and pension benefits of $20,000 for single filers and $40,000 for married filing jointly.

Taxpayers born on or after January 1, 1956 but before January 2, 1961 who have reached age 62 and receive retirement benefits from employment exempt from Social Security may deduct up to $15,000 ($30,000 for joint taxpayers that both qualify) in qualifying retirement and pension benefits.

Taxpayers born after January 1, 1956, who received retirement benefits from SSA exempt employment and were retired as of January 1, 2013 may deduct up to $35,000 in qualifying pension benefits if single or married filing separately or $55,000 if married filing jointly ($70,000 if both qualify)

All other taxpayers born after 1956, all retirement and pension benefits are taxable and are not entitled to a pension subtraction.

E-Payments

Michigan taxpayers now have the option of making tax payments electronically when paying tax due.  Payments can be made using direct deposit, credit or debit card.  A convenience fee will be added if using a debit or credit card. This new feature is available for making the following payments:

• Michigan individual income tax payments

• Quarterly estimated income tax payments

• Individual income tax extension payments

• City of Detroit individual income tax payments

For a more comprehensive listing of State of Michigan tax changes for 2023-2024 visit www.michigan.gov/taxes.