LANSING, Mich. — We’ve been hearing a lot about tax changes here in Michigan since Democrats took control of the Legislature. Let's take a look at just what these tax proposals are.
“The earned income credit. That's going to help a lot of low income families," said Debbie Allerding, who owns Mid-Michigan Tax and Accounting in Lansing.
She’s our local tax expert.
“[The EITC] used to be 10% about 12 years ago, I believe, so this would be a great thing, the 30%," she said.
At its core, the Earned Income Tax Credit, often called the Working Families Tax Credit, gives low to moderate earners more money back through their taxes. New legislation would increase that credit in Michigan from 6% to 30% and could give more money to hundreds of thousands of taxpayers.
The repeal of the retirement tax is something Allerding has been waiting for.
“I've been wanting them to roll back the retirement tax since he changed it in 2012. It hurt a lot of our seniors,” she said.
Former Michigan Gov. Rick Snyder implemented the retirement tax back in 2011. It’s a 4.25% tax on pensions that would be phased out under Whitmer’s plan.
“When you have to pay $500 a year that you really could use elsewhere to the state of Michigan, that hurts you. They've already paid money on that tax or mean tax on that money," Allerding said.
Now, the $180 "inflation checks" are one-time checks that would go out to each income tax filing. There’s an important distinction here, which is couples who file together would get one check of $180 dollars, not two.
“I don't think it'll be complicated if you, if you've been into doing taxes and you go to the classes and you learn and you keep up with tax pro in the state of Michigan laws, but there were these changes are going to be big, but they're going to be good. They're all good," Allerding said.
The legislation to make these changes still needs to be approved the Legislature, in which Democrats have a razor-thin majority.
