State Rep. Jack O’Malley today voted to approve a sweeping tax relief plan that will provide savings for workers, families and seniors in northern Michigan.

Senate Bill 768 cuts income taxes for Michigan workers and provides genuine tax savings for retirees and pension protections. It also creates a nonrefundable child tax credit worth $500 for each qualified dependent.

O’Malley has consistently fought for child tax credit measures to help families save. In December, he called on Congress to work together to extend an expanded child tax credit as part of the American Rescue Plan, saying it would allow people with kids to reduce their tax liability and receive monthly payments.

“Raising a family is tough right now. Inflation is impacting budgets and the prices of everyday things such as gas, groceries, medicine,” said O’Malley, of Lake Ann. “With events we are seeing, there’s a good chance inflation is only going to continue. People need something to counteract that to make ends meet, and they see Michigan operating with a record surplus.

“This would provide everyone in our state with relief instead of just some. It’s a plan that promotes fairness and getting more money back into people’s pockets.”

Estimates for the previous version of the plan stated an average family of four in Michigan would receive around $147 in tax relief. With the added child tax credit, those savings could grow to $1,147.

The plan reduces the income tax rate from 4.25 percent to 3.9 percent for all individual payers, which would return nearly $1.1 billion to Michigan taxpayers in the first year. A larger number of seniors would also receive additional relief through a combined $600 million in exemption reforms. The income exempted from taxes for people 62 and older would rise to $20,000 for individual filers and $40,000 for joint filers, instead of those 67 and older under current law.

An additional exemption would be applied specifically to retirement income – also at $20,000 for single filers and $40,000 for joint filers. With the two exemptions, a person 62 or older with retirement income is eligible for $40,000 for single filers or $80,000 for joint filers.

The plan works with corresponding legislation to provide debt relief for local government employees totaling $1.5 billion in one-time funding. The proposal, HB 5054, helps ensure more pensions will actually exist and be sufficiently funded for municipal workers who have earned them, such as police and fire.

The plans will advance to the governor for consideration once approved by the House and Senate.

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