HB 5661 Summary

• Allows employers with 50 or fewer employees to elect not to withhold Michigan income tax from employee compensation, effective January 1, 2020.

• Requires employers making this election to notify the Department of Treasury in a prescribed form and provide notice to each affected employee.

• Modifies section 711 reporting requirements to apply regardless of whether an employer elects the withholding exemption, ensuring proper tax documentation and filing obligations are maintained.

• Maintains existing withholding obligations for employers with more than 50 employees and for all other income sources including pensions, annuities, gambling winnings, and flow-through entity distributions.