Michigan has made the following changes to the tax laws for the 2020 tax year:
Michigan Standard Deduction
If you or your spouse (if Married Filing Jointly) were born during the period January 1, 1946 through December 31, 1952, and were age 67 before December 31, 2020, you can deduct $20,000 if filing as Single or Married Filing Separately, or $40,000 if filing as Married Filing Jointly, against all income, rather than solely against retirement and pension.
If you or your spouse (if Married Filing Jointly) were born during the period January 1, 1953 through January 1, 1954, and were age 67 on or before December 31, 2020, you can either deduct the personal exemption amount and taxable Social Security benefits, military compensation (including retirement benefits), Michigan National Guard retirement benefits and railroad retirement benefits included in adjusted gross income (AGI), or claim a deduction against all income, of $20,000 if filing as Single or Married Filing Separately, or $40,000 if Married Filing Jointly.
Surviving Spouse Benefit
A surviving spouse is any individual who was born after 1945 and has reached age 67, has not remarried, and has claimed a subtraction for retirement and pension benefits on a jointly filed return with the descendent in the year that they died, may choose to claim the larger of:
- the survivor's Michigan Standard Deduction, OR
- the retirement and pension benefits subtraction available based on the deceased spouse's year of birth subject to the limits available for a single filer.
Expanded Subtraction for Retirement Benefits
If you or your spouse (if Married Filing Jointly) were born after January 1, 1954 but before January 2, 1959, and have reached age 62 and receive Social Security exempt retirement benefits due to employment with a governmental agency, you may be eligible to claim a retirement and pension deduction.
For more information, please refer to the instructions for Form MI-1040.
For more information please refer to the Michigan MI-1040 Instructions.