The State Senate and House of Representatives passed sweeping tax reform that Governor Snyder is highly likely to sign into law. The biggest changes are the elimination of the Michigan Business Tax which is being replaced by a 6% Corporate Income Tax (for entities organized as C Corporations only), and the elimination of the retirement income exemption. Previously, most retirement income including pensions and withdrawals from IRAs/401Ks was exempt from Michigan income tax. Other changes involve the elimination and/or reduction of certain credits and overall simplification of the Michigan tax code. These changes are effective 1/1/12.
If you have questions as to how this will affect your 2012 tax bill, please contact me using the contact information on my website.
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