State Rep. Diana Farrington today voted to repeal Michigan’s pension tax, a proposal that would provide meaningful tax relief for the state’s senior citizens.

“Across southeast Michigan and the entire state, the pension tax established in 2011 is one of the biggest complaints we hear about. The change in state law came up unexpectedly and soon-to-be retirees didn’t have time to prepare for it,” Farrington, of Utica, said after she and the House Tax Policy Committee voted to advance the repeal proposal with bipartisan support.

“Eliminating this tax will help seniors today and those who will be retirees in the future,” Farrington said. “It will free up resources for seniors on fixed incomes to pay rent, buy food and get the medicine they need.”

The committee’s vote advances the bill – one of the first introduced in the 2019-20 session – to the House Ways and Means Committee for further consideration.

House Bill 4006 would eliminate the pension tax approved in 2011, re-establishing Michigan’s previous retirement tax structure. Public pensions would be exempt from taxation and other retirement income would have higher deductibles for state income taxes. Social Security income would continue to be exempt.

The proposal also would eliminate Michigan’s current, complex three-tiered retirement tax structure – which now has different rules for taxpayers depending on what year they were born.

Farrington noted Michigan’s economy and state budget are in much better shape today than when the pension tax was enacted.

“The state budget should never be balanced on the backs of retirees,” Farrington said. “The time is certainly right to move forward with this repeal.”

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