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Public Act 4 of 2023 - Retirement State Tax Changes
March 07, 2023
Public Act (PA) 4 of 2023 (formerly House Bill 4001 of 2023) was recently signed by Gov. Gretchen Whitmer. The bill did not receive sufficient votes for immediate effect; thus, it won’t be effective until 90 days after the sine die adjournment, meaning 90 days after the adjournment of the current legislative session. The session will adjourn around the end of the calendar year, so the law will take effect sometime in March 2024.
PA 4 of 2023 phases in an income tax reduction for retirees over the course of four years, beginning with the 2023 tax year (filed in 2024). It allows retirees to choose between the limitations on the deductibility of retirement and pension income as outlined in the Income Tax Act of 1967, or the new limitations as outlined in PA 4 of 2023 (see comparison charts below). Retirees who want to use the limits of the new law should file their 2023 tax return after the law’s effective date. If filing before the law’s effective date, an amended return can be filed after PA 4 of 2023 takes effect.
For joint returns, the birth year of the older spouse can be used.
Public schools FAQs for Public Act 4 of 2023 - Retirement State Tax Changes
The Michigan Office of Retirement Services will continue to evaluate what the new 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 page.
Published on March 7, 2023
Updated on May 2, 2023