Michigan Senate and House introducing bills to repeal Pension Tax

Updated on Monday, December 18, 2023

Pension Tax Repeal Frequently Asked Questions (FAQs)

Question: I am a retired law enforcement officer; will my pension be subject to Michigan State Tax? 

Answer: Our friends in the Michigan Legislature passed Michigan Public Act 4; this now means that your pensions will not be taxed, no matter how old you are.

Question: I have paid state tax for all of 2023. Will I get that money back? 

Answer: As is always the case, you must consult with your tax preparer. The law has been signed by the Governor and covers the tax year that began on January 1, 2023. 

Question: ​​When will they stop withholding State Tax? 

Answer: Because rules require a certain number of votes to take immediate effect (this bill did not), it goes into effect after 90 days have lapsed since the legislature ended on 11-14-23 (sine die). The 91st day after sine die is February 13, 2024. After that, depending on which pension system you’re covered under, they may stop taking it out, or you may have to fill out a new W-4 for State withholding.

Updated on Thursday, October 12, 2023

On Wednesday, October 11th, POAM Vice President Jon Pignataro met with Governor Gretchen Whitmer and State Representative Jim Haadsma, thanking both for their support. Representative Haadsma has been supportive of the correction officers’ issue. Jon expressed our gratitude for the Governors work on repealing the pension tax for law enforcement and other pro-police labor issues.

Michigan State Rep Haadsma, POAM VP Jonathan Pignataro, and Michigan Governor Gretchen Whitmer

Updated on Tuesday, March 7, 2023

On Monday, March 6th, Senate Bill 4001 passed. POAM Executive Board members John Graver, Jon Pignataro, and Anthony Hall attended the bill signing ceremony with Governor Whitmer and Lt. Governor Garlin Gilchrist to support the repeal of the Pension Tax.

POAM Executive Board members John Graver, Jon Pignataro, and Anthony Hall attend the HB 4001 signing ceremony with Governor Whitmer and Lt. Governor Garlin Gilchrist.

Updated on Friday, February 17, 2023

On Thursday, the Michigan State Senate passed House Bill 4001, which will now head to Governor Whitmer for her signature. This bill exempts all police and correction officers’ pension income from the state income tax. While there is a 4-year phase-in for most pension earners, POAM successfully amended the bill to exempt police and corrections officers from the 4-year phase-in timeline.

The bill was passed by the Michigan Senate 20-17. Every Republican member of the Michigan Senate voted no. Conversely, every Democrat in the Senate voted yes.

Senate Republicans also opposed granting this law immediate effect, meaning the new law’s implementation will be delayed, likely until 2024. POAM is incredibly disappointed that all but 1 Republican in both the Michigan House and Michigan Senate did not support this legislation and blocked the immediate implementation of this tax cut that would help so many retired law enforcement officers.

POAM is incredibly grateful to the following 5 legislators who stood up for law enforcement and made sure this tax cut would be available to law enforcement without a phase-in.

  • Senate Majority Leader Winnie Brinks (D-Grand Rapids)
  • Speaker of the House Joe Tate (D-Detroit)
  • Senator Kevin Hertel (D-Saint Clair Shores)
  • Representative Angela Witwer (D-Delta Township)
  • Representative Mike Mueller (R-Linden)

POAM will continue to lead, fight for, and stand up for law enforcement officers across Michigan.

Kenneth E. Grabowski
Legislative Director
Police Officers Association of Michigan

Updated on Friday, February 10, 2023

On Thursday, February 9th, the Michigan House of Representatives narrowly passed House Bill 4001. Included in this legislation was the elimination of state income tax on pensions. POAM worked closely with legislative leaders and the Governor to include language specifically allowing police officers and corrections officers to receive this benefit immediately. For non-first responders, there is a 4-year phase in.

This is a significant victory for POAM and law enforcement across Michigan.

The POAM Executive Board's Excitement for the House Bill 4001 Passing, February 2023.
Thumbs up to the passing of House Bill 4001 and our friend Representative Mike Mueller’s involvement.

POAM would like to thank Speaker of the House Joe Tate and Representative Angela Witwer for their leadership and support of this legislation and police and corrections officers. Additionally, we would like to thank Senator Kevin Hertel, who supports our efforts in the Senate with similar legislation.

Finally, POAM would like to thank former POAM member and current State Representative Mike Mueller for his courageous support of this bill. Representative Mueller was the only republican that voted Yes on this legislation. Representative Mueller has been a close friend of POAM for many years and was the recipient of POAM’s 2022 Legislator of the Year. He has once again shown leadership and a commitment to having the back of law enforcement across Michigan.

We encourage all POAM members to take a quick minute to call Representative Mueller’s office or send him an email thanking him for his support. You can email him at mikemueller@house.mi.gov or call (517) 373-0840.

This legislation will now be before the Senate on Tuesday, February 14th, where we expect the bill to pass and head to the Governor’s desk for her signature.

Kenneth E. Grabowski
POAM Legislative Director

Updated on Friday, January 27, 2023

On Thursday, both the Michigan House and Michigan Senate passed legislation repealing the tax on pensions. The Senate passed Senate Bill 1 with 3 republicans voting yes and all 20 democrats voting yes. In the House, House Bill 4001 was passed 67-41 with 11 republicans and 56 democrats voting yes. The bills will now switch legislative chambers for further consideration.

POAM was at committee earlier this week to support the pension tax repeal before the Senate Finance, Insurance and Consumer Protection committee chaired by Sen. Mary Cavanagh. POAM was the only active police union in Michigan at committee and in public support of this legislation. We will continue to advocate for this legislation until it passes the legislature and is signed by the Governor.

Kenneth E. Grabowski
POAM Legislative Director

5 responses to “Michigan Pension Tax to be Repealed

Posted by Joe

Does the word all police include retired Federal law enforement under the new Michigan tax law?

Posted on June 10, 2023 at 8:26 AM

Posted by Lawrence E. Somero

I retired from the New Hampshire State Police in 2004. Before moving my wife back to her home state of Michigan I made sure my police pension wouldn’t be taxed. I was shocked and saddened when I later learned that my pension that I earned in another state and was spending in this state was to be taxed and that I would have to file quarterly to the Michigan treasury. This loss of pension has been a real hardship. It’s my hope that my out of state pension is included in house Bill 4001. Thank you to all the above mentioned backers of law enforcement and this bill.

Posted on May 8, 2023 at 9:52 PM

Posted by Rick Drewyour

It’s about time. Gov Snyder removed this benefit after getting an endorsement from POAM. Then he said it was not intended to effect law enforcement and he’d add an amendment to reverse that. It never happened

Posted on March 8, 2023 at 7:47 PM

Posted by David Misiak (Retired Law Enforcement)

Yes, promises made and promise kept by Governor Whitmer and the Democratic party. Its about time retirees stop paying state tax on pension earnings that they were already taxed when they were active workers. It seems like there money handled out for whatever reason to whoever for whatever. Finally first responders are receiving a break and recognition. Again, thank you Governor Whitmer !

Posted on February 17, 2023 at 8:36 AM

Posted by Carol Brooks

Good morning, Is this a national wide
Repeal or is this just for Michigan state
I live in New York on a fix income and they are taxing my Pension also, and for the life of me I can’t understand why you would tax a Senior citizen pension. In closing if there is a national repeal I would like to become a partner in repealing this tax law in every State because it is wrong.

Posted on February 7, 2023 at 7:25 AM

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