This week, I supported Senate passage of legislation to preserve the personal exemption on the state income tax and provide additional tax relief for Michigan families.
Senate Bill 748 would provide well-earned tax relief to Michigan residents and small business owners who have worked hard to help grow our economy and create jobs. As a result of our efforts to improve our state, we have the ability to return to taxpayers more of their money while maintaining critical services and investment in education.
The federal Tax Cuts and Jobs Act signed in December 2017 simplifies the code, lowers tax rates, doubles the standard deduction and increases family tax credits. However, in streamlining the exemption process, it effectively ends the federal personal exemption. Since the state personal exemption is based on the federal return, without a revision to state law, Michigan taxpayers would no longer be able to claim personal exemptions on their state taxes.
SB 748 would make the necessary changes to maintain the state personal exemption and also boost the exemption by an additional $700 to $5,000 by 2021.
Most Michigan taxpayers will pay less in taxes under the federal reform, and this measure will ensure that they can continue claiming the personal exemption on their state taxes and also enable them to keep more of their hard-earned money.
Providing this responsible and affordable relief is another step in helping Michigan families and job providers and getting government out of the way.