According to Michigan Instructions for Form 4884 "Michigan offers qualifying taxpayers a subtraction from their state income for Retirement Benefits that are Exempt from Michigan Income Tax". Refer to the following to help you determine if you qualify for this subtraction:
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 $51,570 for single or married filing separate, or $103,140 for a married filing a joint return.
Recipients born from January 1, 1946 through January 1, 1952, do not complete Form 4884. See Schedule 1, line 24.
Recipients born after January 1, 1952 through December 31, 1952 have the ability to subtract up to $20,000 in qualifying pension and retirement benefits for single or married filing separate filers, or up to $40,000 for a married filing a joint return.
Recipients born on or after January 1, 1953 but before January 2, 1957 who have reached age 62 and receive retirement benefits from employment exempt from Social Security can subtract up to $15,000 in qualifying retirement and pension benefits. If both spouses on a joint return receive Social Security exempt retirement benefits, the maximum subtraction increases to $30,000. See Form 4884, line 29 instructions for more information.
Recipients born after 1952, received retirement 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 for a single or married filing separately flier or $55,000 on a married filing joint return. If both taxpayers on a joint return qualify, the maximum subtraction is $70,000.
All other Recipients born after 1952, all pension and retirement benefits are taxable and you are not allowed to take a pension deduction.
To locate this section within your Michigan return, follow the steps below:
- State Section
- Subtractions from Income
- Income Deductions for Taxpayers Born Before 1953
For additional information, see:
- MI-1040 Instructions
- Form 4884
- Michigan Retirement Benefits Chart
- Is my military pension/retirement income taxable to Michigan?