Revenue Administrative Bulletin 1989-12

MICHIGAN DEPARTMENT OF TREASURY
REVENUE ADMINISTRATIVE BULLETIN 1989-12
Approved: March 31, 1989

INCOME TAX FILING REQUIREMENTS, DEDUCTIONS, AND
EXEMPTIONS FOR DEPENDENT INDIVIDUALS

RAB-89-12. This Bulletin explains the filing requirements, deductions, and exemptions available to a taxpayer who is claimed as a dependent on another taxpayer's income tax return.

Filing Requirements and Deductions

For a tax year beginning after 1986, Michigan's Income Tax Act provides that a taxpayer having an adjusted gross income of $1,500.00 or less and whose personal exemption is allowed to another federal taxpayer under Section 151 of the Internal Revenue Code (IRC) is exempt from Michigan income tax. [MCL 206.52] This person is not required to file an income tax return.

A taxpayer having an adjusted gross income of $1,500.01 or more and whose personal exemption is allowed to another federal taxpayer under Section 151 of the IRC is required to file a Michigan income tax return. However, under Michigan's Income Tax Act, this individual is allowed to claim a deduction of $500.00 from taxable income for a tax year beginning in 1988. [MCL 206.30(4)] The deduction is increased to $1,000.00 for tax years beginning after 1988.

Exemptions

A personal exemption cannot be claimed by a dependent if another taxpayer can claim a dependency exemption for that person. This is true even when the dependent taxpayer is not actually claimed as a dependent on the other's return. A dependent who may not claim a regular personal exemption still may claim one or more of the additional exemptions provided under Michigan's Income Tax. [MCL 206.30(3)(a) through (d)]

The additional exemptions are:

1. Paraplegic, quadriplegic, hemiplegic, disabled or blind;
2. Deaf;
3. 65 years of age or older; or,
4. The exemption granted when an individual's return includes unemployment compensation that amounts to 50% or more of adjusted gross income for tax years beginning after 1986.

Example

A college student is eligible to be claimed as a dependent by his parents on their 1988 Federal income tax return. The student, who is considered deaf as defined in Michigan's Income Tax Act [MCL 206.30(3)(b)] is required to file a Michigan income tax return because the student has adjusted gross income of $1,800.00. The student is allowed to claim a deduction of $500.00 under Michigan's Income Tax Act [MCL 206.30(4)] and an exemption for $1,200.00 as a deaf individual under Michigan's Income Tax Act [MCL 206.30(3)(b)].

Although Michigan's Income Tax Act [MCL 206.30(2)] disallows a personal exemption to an individual claimed on another person's Federal income tax return, the special exemptions described in Michigan's Income Tax Act [MCL 206.30(3)] are allowed to any taxpayer required to file a return. These exemptions are not conditioned on whether a taxpayer is entitled to a federal exemption.