Governor Gretchen Whitmer announced the details of her “Lowering MI Costs” proposal at a press conference on Monday, including a one-time $180 inflation relief check for Michigan taxpayers.
Michigan’s budget surplus is projected to reach $9.2 billion by next fall.
The “Lowering MI Costs” proposal from Whitmer and Democratic state leaders also includes a previously announced repeal of the retirement tax and a significant increase of the state’s earned income tax credit.
An expansion of the Working Families Tax Credit would give at least $3,000 in refunds to about 700,000 families.
“This will be the largest tax breaks for working families and seniors in Michigan in decades,” said Gov. Whitmer in the press conference.
Here's a more detailed look at what the plan entails from Whitmer's office:
Retirement tax: The plan phases out the retirement tax over four years and ultimately puts an average of $1,000 back in the pockets of 500,000 households. Lowering MI Costs will equalize the exemption on both public and private pensions.
Working Families Tax Credit: The plan quintuples the Michigan Working Families Tax Credit match of the federal Earned Income Tax Credit (EITC) to 30%, up from 6%. It delivers an average combined tax refund of $3,150 to 700,000 families, directly impacting nearly one million kids—almost half the kids in Michigan. Lowering MI Costs makes this boost retroactive for tax year 2022, meaning families will get more money in their pockets this year.
Inflation Relief Checks: The plan will deliver $180 inflation relief checks to every Michigan tax filer, providing immediate relief by putting money back in pockets. Ensures everyone receives some relief and builds on relief for working families and seniors.
The proposal is awaiting a vote in the Michigan Legislature.
The Associated Press contributed to this report.