Governor Whitmer Proposes Repeal of Retirement Tax

On Wednesday during the State of the State Address, Governor Gretchen Whitmer proposed a repeal of the retirement tax.

Officials say rolling back on the tax on retirement income, including pensions, 401k accounts and IRA would save half a million households $1,000 a year.

“Repealing the retirement tax will put Michiganders first and save half a million households $1,000 a year,” said Gov. Whitmer. “Michiganders who have worked hard, played by the rules, and budgeted for their whole lives should be able to retire and keep all of their hard-earned dollars. Putting money back in the pockets of retirees will help them afford the essentials from prescriptions, rent, utilities, car payments, to gifts for their grandkids.”

Officials say over the coming years, Governor Whitmer’s proposal would, “again exempt public pensions and restore deductions for private retirement income.”

They say this includes: private-sector pensions, withdrawals from individual retirement accounts (IRA’s), and the portion of the 401k account that is subject to employer match.

“The repeal of the pension tax has been a priority of Michigan’s labor movement since former Governor Snyder first taxed Michiganders’ pensions,” said Ron Bieber, President of the Michigan AFL-CIO. “Retirees across our great state are so grateful to have Governor Gretchen Whitmer as their champion, always prioritizing their dignity and the safety of the pensions they earned.”

“We support the governor’s call to phase out the retirement tax that so egregiously pulled the rug out from under a large swath of retirees who planned and counted on a pension not diminished by taxation,” said AARP Michigan Director Paula D. Cunningham. “Michiganders who have worked hard, played by the rules and paid their dues deserve to retire with dignity, but too many have been forced to go back to work to pay the bills. We urge state legislators to do the right thing by repealing this law and help build Michigan’s reputation as the first ‘age-friendly’ state in the Midwest.”

To view Governor Whitmer’s plan to repeal the retirement tax,