The state’s pension tax is being phased out now that Governor Gretchen Whitmer has signed her Lowering MI Costs Plan into law. The governor says this will eliminate what she calls the retirement tax over four years. Region 4 Area Agency on Aging CEO Christine Vanlandingham tells us the move will affect many of Berrien County’s 32,000 seniors.
“This could have an average impact of another $800 to $1,000 in their pockets each year,” Vanlandingham said.
Vanlandingham says Tuesday’s action will affect public pensions, private retirements, and retirement savings. She believes this will help southwest Michigan seniors stay in the area.
“We want to make Michigan an age-friendly state and not penalize our retirees by taxing their pensions when that wasn’t the original deal when they were working for years. Then to have those taxes out on their pensions felt like a bait and switch. So, to have that repealed now feels like the right thing to do, and I think it will absolutely have an economic impact and we’ll be able to keep more of our seniors here in an age-friendly state.”
Vanlandingham says seniors were hurt with the creation of the 2011 pension tax. Considering many rely on pensions, she says $800 or $1,000 more in their pockets each year will help. The governor’s plan also increases the Michigan Working Families Tax Credit.
