Michigan House Bill HB4747

Michigan 2025-2026 Regular Session

• Introduced: 7/29/25
• Refer: 7/29/25
• Report Pass: 9/16/25
• Engrossed: 10/21/25
• Refer: 10/23/25

Caption

Individual income tax: deductions; deduction for contributions made to any 529 education savings plan; provide for. Amends sec. 30 of 1967 PA 281 (MCL 206.30).

Impact

The bill represents a significant shift in how retirement income is treated within Michigan's tax framework, as it seeks to exempt certain retirement or pension benefits from taxation, effectively supporting retirees and incentivizing savings for education. The gradually increasing deductible amounts for retirement benefits are designed to lessen the tax burden on older adults, making it easier for them to manage their incomes post-retirement. Furthermore, by allowing deductions for contributions made to 529 plans, the bill aims to encourage savings for education, which aligns with broader goals of improving educational access and affordability.

Summary

House Bill 4747 proposes amendments to the Income Tax Act of 1967, primarily focusing on deductions related to retirement and pension benefits and contributions to 529 education savings plans. The bill aims to provide specific tax deductions for taxpayers receiving retirement income from public service, including police, fire department employees, and other state employees. Additionally, it contains provisions for individuals born after 1945 to gradually increase the amount they can deduct for retirement benefits, improving financial relief to those entering retirement age.

Sentiment

The sentiment surrounding HB 4747 appears to be generally positive, particularly among those advocating for retiree benefits and education savings. Supporters argue that the bill is a long-overdue adjustment needed to help seniors live more comfortably without the strain of income tax on their pensions. However, there may be concerns about the fiscal impact this amendment could have on state revenue, especially in light of budget considerations. Generally, the discourse points toward a favorable view among legislators focused on supporting retirees and education financing.

Contention

While there is broad support for the intent of the bill, notable contention lies in the potential implications for state tax revenues. Critics may voice concerns regarding the long-term effects of providing extensive tax deductions on the overall state budget. There may also be debate over whether all groups benefiting from these deductions are equitable and whether those still in active workforce positions should also receive similar benefits or adjustments in tax treatments. Hence, discussions underscore a balance between ensuring support for retirees and maintaining responsible fiscal policy.