March 07, 2023
Public Act (PA) 4 of 2023, also known as the Lowering MI Costs Plan, took effect Feb. 13, 2024. It phases in an income tax reduction over the course of four years for retirees who receive a pension. For the 2025 tax year (filed in 2026), Michigan’s tax return, forms, and instructions (e-file and paper format) incorporate all retirement and pension benefit subtraction options – including those created by PA 4 of 2023. For more details, see the Michigan Department of Treasury website.
For joint returns, the birth year of the older spouse can be used.
Judges FAQs for Public Act 4 of 2023 - Retirement State Tax Changes
The Michigan Office of Retirement Services will continue to evaluate what the law means for our members as the phase-in continues. Please consult a tax professional regarding any questions you may have. To learn more about PA 4 of 2023, see the Michigan Legislature's page.
Updated on Feb. 19, 2026
