Repealing Michigan’s Retirement Tax: This Is Gov. Whitmer’s Plan to Save Retirees $1,000 Per Year 

“That’s money for prescriptions, rent, car payments, or gifts for grandkids,” Whitmer said during her State of the State speech on Wednesday.

Need to Know

• Under current law, all retirement income is taxed for Michiganders born after 1946.
• Gov. Gretchen Whitmer wants to eliminate the tax, which would save an estimated half-a-million households $1,000 per year, according to her office.
• Retired steelworker Steve Turri say this policy would provide he and his wife more financial security

MICHIGAN–Retirees in Michigan could soon save $1,000 per year under a plan proposed by Gov. Gretchen Whitmer. 

Gov. Whitmer has announced a plan to repeal the so-called retirement tax. Under current state law, all retirement income–including pensions, 401k accounts, and IRAs–is taxed for Michiganders born after 1946. Whitmer’s effort would repeal that tax and save an estimated half-a-million households $1,000 per year, according to her office.

“That’s money for prescriptions, rent, car payments, or gifts for grandkids,” Whitmer said during her State of the State speech. “Repealing the retirement tax will help real people.”

Her proposal has already gained support from the Michigan AFL-CIO, the Michigan Education Association, the Detroit Urban League, and AARP Michigan. 

“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,” AARP Michigan Director Paula D. Cunningham said in a statement. “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.”   

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Whitmer noted that she opposed the retirement tax when it was passed in 2011 under former Republican Gov. Rick Snyder. Whitmer served in the state legislature at the time.  She also tried to repeal the tax during budget negotiations in 2019, but was unable to get the Republican-led legislature on board.

If Republicans agree to Whitmer’s plan this time around–and there are indications they might–seniors would be free from the retirement tax by the end of 2024. That would provide a huge help to Steve Turri, a Negaunee resident and retired steelworker.

“I worked for 31 years as a Steelworker. In 2004 I retired with a pension to provide for my wife and me. My pension is a lynchpin for our financial security,” Turri said in a statement. “The law that taxed my pension years later has been unfair to us. I fully support the Governor’s proposal to repeal the pension tax.”