MI HB5838

Increases the personal exemption amount by $600.00 for the 2022 tax year and each tax year thereafter, with the adjustment rounded to the nearest $100.00 increment.

Modifies retirement and pension benefit deduction restrictions for individuals born after 1945, lowering the age threshold from 67 to 62 beginning January 1, 2022 for eligibility to claim an unrestricted deduction of $20,000.00 (single) or $40,000.00 (joint).

Reduces the personal income tax rate from 4.25% to 3.9% effective January 1, 2022, subject to a revenue-dependent adjustment mechanism that may trigger rate reductions if general fund revenue growth exceeds inflation.

Adds a new subsection (10) allowing taxpayers who elect the unrestricted deduction to claim an additional restricted deduction for retirement or pension benefits up to $20,000.00 (single) or $40,000.00 (joint) if retirement income remains after the unrestricted deduction.

Extends the allowable deduction period for surviving spouses born after 1945 to take unrestricted income deductions starting at age 62 (rather than 67) for tax years beginning after December 31, 2022.