HB 4816 Summary

• Modifies Michigan Income Tax Act section 30 to restructure age-based limitations on retirement and pension benefit deductions, creating new restrictions for tax years beginning January 1, 2018 and later.

• Establishes a two-tier system for people born 1950-1955: limits retirement and pension deductions to $20,000 (single) or $40,000 (joint) until age 67, then allows unrestricted deduction; persons born 1946-1952 under prior law had different age thresholds.

• Provides special higher limits of $35,000 (single) or $55,000-$70,000 (joint) for government employees not covered by Social Security who were born 1950-1955, phasing to unrestricted deductions at age 67.

• Restricts retirement and pension benefit deductions for people born after 1955: deductions unavailable until age 67, when $20,000 (single) or $40,000 (joint) unrestricted deduction becomes available, with exceptions for government employees aged 62-66 not covered by Social Security.

• Updates references to ABLE savings accounts and education savings programs, clarifies treatment of Holocaust victim settlement proceeds and tribal member nonbusiness income deductions.