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Thursday, January 12, 2012

Important Michigan Tax Law Changes for 2012

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Notice how many times the word REPEAL is used below and, how many of the changes impact in Michigan's Income Tax working families and seniors!
Michigan tax changes to note; most to take effect in 2013
LAPEER COUNTY — On May 25, 2011, Gov. Rick Snyder signed legislation amending the Michigan Income Tax Act. This new legislation does not apply to or otherwise impact income tax returns that are due in April 2012.

Instead, the first returns that are affected by this legislation are those returns that are due in April 2013. The changes include: Exemptions

Personal exemption set at $3,700 (same as under current law) and will be indexed to inflation beginning in 2013.

Repeals special exemptions for seniors

Repeals special exemption for unemployment compensation greater than 50 percent of adjusted gross income (AGI).

• Special exemption for disabled and exemption for disabled veterans remain unchanged.

• Phases out certain pension and retirement income subtractions based on date of birth. Deductions/Subtractions

Repeals the deduction for reinvestment of gain from Michigan Strategic Fund investments.

Repeals certain miscellaneous deductions (political donations; prizes won in stateregulated bingo, raffle, or charity games; charitable gifts from retirement plans).

• Removes both the gross income and the related expenses from oil and gas production if the gross income was subject to severance tax.

Repeals the $600 deduction for children 18 and under. Non-refundable Credits

Repeals the credit for city income taxes.

Repeals the credit for public contributions.

Repeals the credit for contributions to homeless shelters, food banks, and community foundations.

Repeals the credit for contributions to medical savings accounts.

Repeals the credit for donations to the Family Development Program.

Repeals the film credit for wage withholding.

Repeals the credit for automobile donations.

Repeals the credit for college tuition and fees.

• Ends credits for historic rehabilitation plans certified after 2011. Refundable Credits

Reduces the Earned Income Tax Credit from 20 percent to 6 percent.

Repeals the excess adoption expense credit.

Repeals the stillbirth credit.

• Changes the homestead property tax credit as follows:

— Household income is replaced by total household resources which excludes losses from business, rentals and royalties and also excludes net operating losses.
ROJS News Editor's note...
In the end, Michigan's working, middle and lower classes will pay more in every way, as between the repeals of credits and either the scaling and/or elimination back of others. Also remember, as you end reading this important information, Michigan's C & S Corporations received a TAX BREAK to the tune of $1.8 Billion dollars. In other words, they receive a break while starting in 2013, your family and individuals will be paying more.
Enjoy your Michigan Tax Return refund for the 2011 tax year, as it might be the last one that is received, for awhile.
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