According to the Michigan Instructions for Form 4884, "Retirement and pension benefits are taxed differently depending on the age of the recipient. Married couples filing a joint return should complete Form 4884 based on the year of birth of the older spouse."
Recipients born before 1946 may deduct all qualifying pension and retirement benefits received from public sources or federal sources and may deduct qualifying private pensions and retirement benefits up to $64,040 for single or married filing separate, or $128,080 for a married filing a joint return.
If the public retirement benefits are greater than the maximum amount, the recipient, and their spouse (If filing a joint return) are not entitled to claim an additional subtraction for private retirement and pension benefits.
Recipients born during the period January 1, 1946 through December 31, 1952 qualify for a retirement and pension benefits subtraction or a Tier 2 Michigan Standard Deduction.
NOTE: Exceptions may apply for surviving spouses.
Recipients born from January 1, 1953 through December 31, 1958 qualify for a retirement and pension benefits subtraction or a Tier 3 Michigan Standard Deduction.
Recipients born during the period from January 2, 1958 through December 31, 1962 may subtract qualifying retirement and pension benefits up to $32,020 if single or married filing separate, or $64,040 if married filing a joint return.
Recipients born from January 1, 1958 through January 1, 1963 and who have reached age 62, received retirement and pension benefits from SSA exempt employment may subtract up to $15,000 in qualifying retirement and pension benefits. If both spouses on a joint return receive Social Security exempt retirement and pension benefits, the maximum subtraction increases to $30,000.
NOTE: Recipients born prior to January 1, 1963 may qualify for multiple subtraction options.
Recipients born after January 1, 1958, received retirement and pension benefits from SSA exempt employment and were retired as of January 1, 2013 may subtract up to $35,000 in qualifying retirement and pension benefits if filing as single or married filing separately, or $55,000 if married filing a joint return. The maximum subtraction increases to $70,000 if both spouses on a joint return qualify.
Recipients born after December 31, 1962, do not qualify for a retirement and pension benefits subtraction. All benefits included in the adjusted gross income are taxable.
NOTE: Exceptions may apply for surviving spouses.
Qualifying surviving spouse born January 1, 1946 through January 1, 1958 and has reached the age of 67 may elect to claim the most beneficial of either a Michigan Standard Deduction or a retirement and pension benefits subtraction on Form 4884.
If a surviving spouse did not claim a subtraction for retirement and pension or Social Security benefits on a return jointly filed with the decedent in the year the spouse died or the surviving spouse has remarried, they are not considered a qualifying surviving spouse and must claim the retirement and pension benefits subtraction based on the year of birth of the filer (or older spouse if remarried).
Program Entry
To locate this section within your Michigan return, follow the steps below:
- State Section
- Edit Michigan state return
- Subtractions from Income
- Deductions Based on Year of Birth
Additional Information
For additional information, see: