MI HB5941

Allows tipped employees to deduct proven gratuities reported to employers for federal insurance contributions act purposes, effective for tax years beginning after December 31, 2024.

Defines "tipped employee" as an employee in an occupation who regularly receives more than $30.00 per month in gratuities and "gratuities" as voluntary monetary contributions from guests or customers reported to the employer.

Removes outdated effective dates from existing deductions for Michigan National Guard retirement benefits and other retirement/pension benefits by striking "beginning January 1, 2012" and "beginning on and after January 1, 2007" language.

Updates federal statute references from outdated citations (chapter 531, 49 Stat 620) to current citations (42 USC 301 to 1397mm) regarding federal social security act coverage.

Clarifies that gratuities must be declared on the employee's federal filing for FICA purposes to qualify for the Michigan income tax deduction.