December 4, 2013, Introduced by Rep. Singh and referred to the Committee on Tax Policy.
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
by amending sections 30, 311, 504, and 522 (MCL 206.30, 206.311,
206.504, and 206.522), section 30 as amended by 2012 PA 597,
section 311 as amended by 2011 PA 38, section 504 as amended by
1993 PA 328, and section 522 as amended by 2011 PA 180.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 30. (1) "Taxable income" means, for a person other than
2 a corporation, estate, or trust, adjusted gross income as defined
3 in the internal revenue code subject to the following adjustments
4 under this section:
5 (a) Add gross interest income and dividends derived from
6 obligations or securities of states other than Michigan, in the
1 same amount that has been excluded from adjusted gross income
2 less related expenses not deducted in computing adjusted gross
3 income because of section 265(a)(1) of the internal revenue code.
4 (b) Add taxes on or measured by income to the extent the
5 taxes have been deducted in arriving at adjusted gross income.
6 (c) Add losses on the sale or exchange of obligations of the
7 United States government, the income of which this state is
8 prohibited from subjecting to a net income tax, to the extent
9 that the loss has been deducted in arriving at adjusted gross
10 income.
11 (d) Deduct, to the extent included in adjusted gross income,
12 income derived from obligations, or the sale or exchange of
13 obligations, of the United States government that this state is
14 prohibited by law from subjecting to a net income tax, reduced by
15 any interest on indebtedness incurred in carrying the obligations
16 and by any expenses incurred in the production of that income to
17 the extent that the expenses, including amortizable bond
18 premiums, were deducted in arriving at adjusted gross income.
19 (e) Deduct, to the extent included in adjusted gross income,
20 the following:
21 (i) Compensation, including retirement benefits, received for
22 services in the armed forces of the United States.
23 (ii) Retirement or pension benefits under the railroad
24 retirement act of 1974, 45 USC 231 to 231v.
25 (iii) beginning Beginning January 1, 2012, retirement or
26 pension benefits received for services in the Michigan national
27 guard.
1 (f) Deduct the following to the extent included in adjusted
2 gross income subject to the limitations and restrictions set
3 forth in subsection (9):
4 (i) Retirement or pension benefits received from a federal
5 public retirement system or from a public retirement system of or
6 created by this state or a political subdivision of this state.
7 (ii) Retirement or pension benefits received from a public
8 retirement system of or created by another state or any of its
9 political subdivisions if the income tax laws of the other state
10 permit a similar deduction or exemption or a reciprocal deduction
11 or exemption of a retirement or pension benefit received from a
12 public retirement system of or created by this state or any of
13 the political subdivisions of this state.
14 (iii) Social security benefits as defined in section 86 of the
15 internal revenue code.
16 (iv) Beginning on and after January 1, 2007, retirement or
17 pension benefits not deductible under subparagraph (i) or
18 subdivision (e) from any other retirement or pension system or
19 benefits from a retirement annuity policy in which payments are
20 made for life to a senior citizen, to a maximum of $42,240.00 for
21 a single return and $84,480.00 for a joint return. The maximum
22 amounts allowed under this subparagraph shall be reduced by the
23 amount of the deduction for retirement or pension benefits
24 claimed under subparagraph (i) or subdivision (e) and by the
25 amount of a deduction claimed under subdivision (p). For the 2008
26 tax year and each tax year after 2008, the maximum amounts
27 allowed under this subparagraph shall be adjusted by the
1 percentage increase in the United States consumer price index for
2 the immediately preceding calendar year. The department shall
3 annualize the amounts provided in this subparagraph as necessary.
4 As used in this subparagraph, "senior citizen" means that term as
5 defined in section 514.
6 (v) The amount determined to be the section 22 amount
7 eligible for the elderly and the permanently and totally disabled
8 credit provided in section 22 of the internal revenue code.
9 (g) Adjustments resulting from the application of section
10 271.
11 (h) Adjustments with respect to estate and trust income as
12 provided in section 36.
13 (i) Adjustments resulting from the allocation and
14 apportionment provisions of chapter 3.
15 (j) Deduct the following payments made by the taxpayer in
16 the tax year:
17 (i) For the 2010 tax year and each tax year after 2010, the
18 amount of a charitable contribution made to the advance tuition
19 payment fund created under section 9 of the Michigan education
20 trust act, 1986 PA 316, MCL 390.1429.
21 (ii) The amount of payment made under an advance tuition
22 payment contract as provided in the Michigan education trust act,
23 1986 PA 316, MCL 390.1421 to 390.1442.
24 (iii) The amount of payment made under a contract with a
25 private sector investment manager that meets all of the following
26 criteria:
27 (A) The contract is certified and approved by the board of
1 directors of the Michigan education trust to provide equivalent
2 benefits and rights to purchasers and beneficiaries as an advance
3 tuition payment contract as described in subparagraph (ii).
4 (B) The contract applies only for a state institution of
5 higher education as defined in the Michigan education trust act,
6 1986 PA 316, MCL 390.1421 to 390.1442, or a community or junior
7 college in Michigan.
8 (C) The contract provides for enrollment by the contract's
9 qualified beneficiary in not less than 4 years after the date on
10 which the contract is entered into.
11 (D) The contract is entered into after either of the
12 following:
13 (I) The purchaser has had his or her offer to enter into an
14 advance tuition payment contract rejected by the board of
15 directors of the Michigan education trust, if the board
16 determines that the trust cannot accept an unlimited number of
17 enrollees upon an actuarially sound basis.
18 (II) The board of directors of the Michigan education trust
19 determines that the trust can accept an unlimited number of
20 enrollees upon an actuarially sound basis.
21 (k) If an advance tuition payment contract under the
22 Michigan education trust act, 1986 PA 316, MCL 390.1421 to
23 390.1442, or another contract for which the payment was
24 deductible under subdivision (j) is terminated and the qualified
25 beneficiary under that contract does not attend a university,
26 college, junior or community college, or other institution of
27 higher education, add the amount of a refund received by the
1 taxpayer as a result of that termination or the amount of the
2 deduction taken under subdivision (j) for payment made under that
3 contract, whichever is less.
4 (l) Deduct from the taxable income of a purchaser the amount
5 included as income to the purchaser under the internal revenue
6 code after the advance tuition payment contract entered into
7 under the Michigan education trust act, 1986 PA 316, MCL 390.1421
8 to 390.1442, is terminated because the qualified beneficiary
9 attends an institution of postsecondary education other than
10 either a state institution of higher education or an institution
11 of postsecondary education located outside this state with which
12 a state institution of higher education has reciprocity.
13 (m) Add, to the extent deducted in determining adjusted
14 gross income, the net operating loss deduction under section 172
15 of the internal revenue code.
16 (n) Deduct a net operating loss deduction for the taxable
17 year as determined under section 172 of the internal revenue code
18 subject to the modifications under section 172(b)(2) of the
19 internal revenue code and subject to the allocation and
20 apportionment provisions of chapter 3 of this part for the
21 taxable year in which the loss was incurred.
22 (o) Deduct, to the extent included in adjusted gross income,
23 benefits from a discriminatory self-insurance medical expense
24 reimbursement plan.
25 (p) Beginning on and after January 1, 2007, subject to any
26 limitation provided in this subdivision, a taxpayer who is a
27 senior citizen may deduct to the extent included in adjusted
1 gross income, interest, dividends, and capital gains received in
2 the tax year not to exceed $9,420.00 for a single return and
3 $18,840.00 for a joint return. The maximum amounts allowed under
4 this subdivision shall be reduced by the amount of a deduction
5 claimed for retirement benefits under subdivision (e) or a
6 deduction claimed under subdivision (f)(i), (ii), (iv), or (v). For
7 the 2008 tax year and each tax year after 2008, the maximum
8 amounts allowed under this subdivision shall be adjusted by the
9 percentage increase in the United States consumer price index for
10 the immediately preceding calendar year. The department shall
11 annualize the amounts provided in this subdivision as necessary.
12 Beginning January 1, 2012, the deduction under this subsection is
13 not available to a senior citizen born after 1945. As used in
14 this subdivision, "senior citizen" means that term as defined in
15 section 514.
16 (q) Deduct, to the extent included in adjusted gross income,
17 all of the following:
18 (i) The amount of a refund received in the tax year based on
19 taxes paid under this part.
20 (ii) The amount of a refund received in the tax year based on
21 taxes paid under the city income tax act, 1964 PA 284, MCL
22 141.501 to 141.787.
23 (iii) The amount of a credit received in the tax year based on
24 a claim filed under sections 520 and 522 to the extent that the
25 taxes used to calculate the credit were not used to reduce
26 adjusted gross income for a prior year.
27 (r) Add the amount paid by the state on behalf of the
1 taxpayer in the tax year to repay the outstanding principal on a
2 loan taken on which the taxpayer defaulted that was to fund an
3 advance tuition payment contract entered into under the Michigan
4 education trust act, 1986 PA 316, MCL 390.1421 to 390.1442, if
5 the cost of the advance tuition payment contract was deducted
6 under subdivision (j) and was financed with a Michigan education
7 trust secured loan.
8 (s) Deduct, to the extent included in adjusted gross income,
9 any amount, and any interest earned on that amount, received in
10 the tax year by a taxpayer who is a Holocaust victim as a result
11 of a settlement of claims against any entity or individual for
12 any recovered asset pursuant to the German act regulating
13 unresolved property claims, also known as Gesetz zur Regelung
14 offener Vermogensfragen, as a result of the settlement of the
15 action entitled In re: Holocaust victim assets litigation, CV-96-
16 4849, CV-96-5161, and CV-97-0461 (E.D. NY), or as a result of any
17 similar action if the income and interest are not commingled in
18 any way with and are kept separate from all other funds and
19 assets of the taxpayer. As used in this subdivision:
20 (i) "Holocaust victim" means a person, or the heir or
21 beneficiary of that person, who was persecuted by Nazi Germany or
22 any Axis regime during any period from 1933 to 1945.
23 (ii) "Recovered asset" means any asset of any type and any
24 interest earned on that asset including, but not limited to, bank
25 deposits, insurance proceeds, or artwork owned by a Holocaust
26 victim during the period from 1920 to 1945, withheld from that
27 Holocaust victim from and after 1945, and not recovered,
1 returned, or otherwise compensated to the Holocaust victim until
2 after 1993.
3 (t) Deduct, to the extent not deducted in determining
4 adjusted gross income, both of the following:
5 (i) Contributions made by the taxpayer in the tax year less
6 qualified withdrawals made in the tax year from education savings
7 accounts, calculated on a per education savings account basis,
8 pursuant to the Michigan education savings program act, 2000 PA
9 161, MCL 390.1471 to 390.1486, not to exceed a total deduction of
10 $5,000.00 for a single return or $10,000.00 for a joint return
11 per tax year. The amount calculated under this subparagraph for
12 each education savings account shall not be less than zero.
13 (ii) The amount under section 30f.
14 (u) Add, to the extent not included in adjusted gross
15 income, the amount of money withdrawn by the taxpayer in the tax
16 year from education savings accounts, not to exceed the total
17 amount deducted under subdivision (t) in the tax year and all
18 previous tax years, if the withdrawal was not a qualified
19 withdrawal as provided in the Michigan education savings program
20 act, 2000 PA 161, MCL 390.1471 to 390.1486. This subdivision does
21 not apply to withdrawals that are less than the sum of all
22 contributions made to an education savings account in all
23 previous tax years for which no deduction was claimed under
24 subdivision (t), less any contributions for which no deduction
25 was claimed under subdivision (t) that were withdrawn in all
26 previous tax years.
27 (v) A taxpayer who is a resident tribal member may deduct,
1 to the extent included in adjusted gross income, all nonbusiness
2 income earned or received in the tax year and during the period
3 in which an agreement entered into between the taxpayer's tribe
4 and this state pursuant to section 30c of 1941 PA 122, MCL
5 205.30c, is in full force and effect. As used in this
6 subdivision:
7 (i) "Business income" means business income as defined in
8 section 4 and apportioned under chapter 3.
9 (ii) "Nonbusiness income" means nonbusiness income as defined
10 in section 14 and, to the extent not included in business income,
11 all of the following:
12 (A) All income derived from wages whether the wages are
13 earned within the agreement area or outside of the agreement
14 area.
15 (B) All interest and passive dividends.
16 (C) All rents and royalties derived from real property
17 located within the agreement area.
18 (D) All rents and royalties derived from tangible personal
19 property, to the extent the personal property is utilized within
20 the agreement area.
21 (E) Capital gains from the sale or exchange of real property
22 located within the agreement area.
23 (F) Capital gains from the sale or exchange of tangible
24 personal property located within the agreement area at the time
25 of sale.
26 (G) Capital gains from the sale or exchange of intangible
27 personal property.
1 (H) All pension income and benefits including, but not
2 limited to, distributions from a 401(k) plan, individual
3 retirement accounts under section 408 of the internal revenue
4 code, or a defined contribution plan, or payments from a defined
5 benefit plan.
6 (I) All per capita payments by the tribe to resident tribal
7 members, without regard to the source of payment.
8 (J) All gaming winnings.
9 (iii) "Resident tribal member" means an individual who meets
10 all of the following criteria:
11 (A) Is an enrolled member of a federally recognized tribe.
12 (B) The individual's tribe has an agreement with this state
13 pursuant to section 30c of 1941 PA 122, MCL 205.30c, that is in
14 full force and effect.
15 (C) The individual's principal place of residence is located
16 within the agreement area as designated in the agreement under
17 sub-subparagraph (B).
18 (w) For tax years beginning after December 31, 2011,
19 eliminate all of the following:
20 (i) Income from producing oil and gas to the extent included
21 in adjusted gross income.
22 (ii) Expenses of producing oil and gas to the extent deducted
23 in arriving at adjusted gross income.
24 (2) Except as otherwise provided in subsection (7), a
25 personal exemption of $3,700.00 multiplied by the number of
26 personal or dependency exemptions allowable on the taxpayer's
27 federal income tax return pursuant to the internal revenue code
1 shall be subtracted in the calculation that determines taxable
2 income.
3 (3) Except as otherwise provided in subsection (7), a single
4 additional exemption determined as follows shall be subtracted in
5 the calculation that determines taxable income in each of the
6 following circumstances:
7 (a) $1,800.00 for each taxpayer and every dependent of the
8 taxpayer who is a deaf person as defined in section 2 of the deaf
9 persons' interpreters act, 1982 PA 204, MCL 393.502; a
10 paraplegic, a quadriplegic, or a hemiplegic; a person who is
11 blind as defined in section 504; or a person who is totally and
12 permanently disabled as defined in section 522. When a dependent
13 of a taxpayer files an annual return under this part, the
14 taxpayer or dependent of the taxpayer, but not both, may claim
15 the additional exemption allowed under this subdivision. As used
16 in this subdivision, "dependent" means that term as defined in
17 section 30e.
18 (b) For tax years beginning after 2007, $250.00 for each
19 taxpayer and every dependent of the taxpayer who is a qualified
20 disabled veteran. When a dependent of a taxpayer files an annual
21 return under this part, the taxpayer or dependent of the
22 taxpayer, but not both, may claim the additional exemption
23 allowed under this subdivision. As used in this subdivision:
24 (i) "Qualified disabled veteran" means a veteran with a
25 service-connected disability.
26 (ii) "Service-connected disability" means a disability
27 incurred or aggravated in the line of duty in the active
1 military, naval, or air service as described in 38 USC 101(16).
2 (iii) "Veteran" means a person who served in the active
3 military, naval, marine, coast guard, or air service and who was
4 discharged or released from his or her service with an honorable
5 or general discharge.
6 (4) An individual with respect to whom a deduction under
7 section 151 of the internal revenue code is allowable to another
8 federal taxpayer during the tax year is not considered to have an
9 allowable federal exemption for purposes of subsection (2), but
10 may subtract $1,500.00 in the calculation that determines taxable
11 income for a tax year.
12 (5) A nonresident or a part-year resident is allowed that
13 proportion of an exemption or deduction allowed under subsection
14 (2), (3), or (4) that the taxpayer's portion of adjusted gross
15 income from Michigan sources bears to the taxpayer's total
16 adjusted gross income.
17 (6) In calculating taxable income, a taxpayer shall not
18 subtract from adjusted gross income the amount of prizes won by
19 the taxpayer under the McCauley-Traxler-Law-Bowman-McNeely
20 lottery act, 1972 PA 239, MCL 432.1 to 432.47.
21 (7) For each tax year beginning on and after January 1,
22 2013, the personal exemption allowed under subsection (2) shall
23 be adjusted by multiplying the exemption for the tax year
24 beginning in 2012 by a fraction, the numerator of which is the
25 United States consumer price index for the state fiscal year
26 ending in the tax year prior to the tax year for which the
27 adjustment is being made and the denominator of which is the
1 United States consumer price index for the 2010-2011 state fiscal
2 year. The resultant product shall be rounded to the nearest
3 $100.00 increment. As used in this section, "United States
4 consumer price index" means the United States consumer price
5 index for all urban consumers as defined and reported by the
6 United States department of labor, bureau of labor statistics.
7 For each tax year, the exemptions allowed under subsection (3)
8 shall be adjusted by multiplying the exemption amount under
9 subsection (3) for the tax year by a fraction, the numerator of
10 which is the United States consumer price index for the state
11 fiscal year ending the tax year prior to the tax year for which
12 the adjustment is being made and the denominator of which is the
13 United States consumer price index for the 1998-1999 state fiscal
14 year. The resultant product shall be rounded to the nearest
15 $100.00 increment.
16 (8) As used in subsection (1)(f), "retirement or pension
17 benefits" means distributions from all of the following:
18 (a) Except as provided in subdivision (d), qualified pension
19 trusts and annuity plans that qualify under section 401(a) of the
20 internal revenue code, including all of the following:
21 (i) Plans for self-employed persons, commonly known as Keogh
22 or HR10 plans.
23 (ii) Individual retirement accounts that qualify under
24 section 408 of the internal revenue code if the distributions are
25 not made until the participant has reached 59-1/2 years of age,
26 except in the case of death, disability, or distributions
27 described by section 72(t)(2)(A)(iv) of the internal revenue code.
1 (iii) Employee annuities or tax-sheltered annuities purchased
2 under section 403(b) of the internal revenue code by
3 organizations exempt under section 501(c)(3) of the internal
4 revenue code, or by public school systems.
5 (iv) Distributions from a 401(k) plan attributable to
6 employee contributions mandated by the plan or attributable to
7 employer contributions.
8 (b) The following retirement and pension plans not qualified
9 under the internal revenue code:
10 (i) Plans of the United States, state governments other than
11 this state, and political subdivisions, agencies, or
12 instrumentalities of this state.
13 (ii) Plans maintained by a church or a convention or
14 association of churches.
15 (iii) All other unqualified pension plans that prescribe
16 eligibility for retirement and predetermine contributions and
17 benefits if the distributions are made from a pension trust.
18 (c) Retirement or pension benefits received by a surviving
19 spouse if those benefits qualified for a deduction prior to the
20 decedent's death. Benefits received by a surviving child are not
21 deductible.
22 (d) Retirement and pension benefits do not include:
23 (i) Amounts received from a plan that allows the employee to
24 set the amount of compensation to be deferred and does not
25 prescribe retirement age or years of service. These plans
26 include, but are not limited to, all of the following:
27 (A) Deferred compensation plans under section 457 of the
1 internal revenue code.
2 (B) Distributions from plans under section 401(k) of the
3 internal revenue code other than plans described in subdivision
4 (a)(iv).
5 (C) Distributions from plans under section 403(b) of the
6 internal revenue code other than plans described in subdivision
7 (a)(iii).
8 (ii) Premature distributions paid on separation, withdrawal,
9 or discontinuance of a plan prior to the earliest date the
10 recipient could have retired under the provisions of the plan.
11 (iii) Payments received as an incentive to retire early unless
12 the distributions are from a pension trust.
13 (9) In determining taxable income under this section, the
14 following limitations and restrictions apply:
15 (a) For a person born before 1946, this subsection provides
16 no additional restrictions or limitations under subsection
17 (1)(f).
18 (b) Except as otherwise provided in subdivision (c), for a
19 person born in 1946 through 1952, the sum of the deductions under
20 subsection (1)(f)(i), (ii), and (iv) is limited to $20,000.00 for a
21 single return and $40,000.00 for a joint return. After that
22 person reaches the age of 67, the deductions under subsection
23 (1)(f)(i), (ii), and (iv) do not apply and that person is eligible
24 for a deduction of $20,000.00 for a single return and $40,000.00
25 for a joint return, which deduction is available against all
26 types of income and is not restricted to income from retirement
27 or pension benefits. A person that who takes
the deduction under
1 subsection (1)(e) is not eligible for the unrestricted deduction
2 of $20,000.00 for a single return and $40,000.00 for a joint
3 return under this subdivision.
4 (c) Beginning January 1, 2013, for a person born in 1946
5 through 1952 who receives retirement or pension benefits from
6 employment with a governmental agency that was not covered by the
7 federal social security act, chapter 531, 49 Stat. 620, the sum
8 of the deductions under subsection (1)(f)(i), (ii), and (iv) is
9 limited to $35,000.00 for a single return and, except as
10 otherwise provided under this subdivision, $55,000.00 for a joint
11 return. If both of the husband and wife individuals filing a
12 joint return receive retirement or pension benefits from
13 employment with a governmental agency that was not covered by the
14 federal social security act, chapter 531, 49 Stat. 620, the sum
15 of the deductions under subsection (1)(f)(i), (ii), and (iv) is
16 limited to $70,000.00 for a joint return. After that person
17 reaches the age of 67, the deductions under subsection (1)(f)(i),
18 (ii), and (iv) do not apply and that person is eligible for a
19 deduction of $35,000.00 for a single return and $55,000.00 for a
20 joint return, or $70,000.00 for a joint return if applicable,
21 which deduction is available against all types of income and is
22 not restricted to income from retirement or pension benefits. A
23 person who takes the deduction under subsection (1)(e) is not
24 eligible for the unrestricted deduction of $35,000.00 for a
25 single return and $55,000.00 for a joint return, or $70,000.00
26 for a joint return if applicable, under this subdivision.
27 (d) For a person born after 1952 who has reached the age of
1 62 through 66 years of age and who receives retirement or pension
2 benefits from employment with a governmental agency that was not
3 covered by the federal social security act, chapter 532, 49 Stat.
4 620, the sum of the deductions under subsection (1)(f)(i), (ii),
5 and (iv) is limited to $15,000.00 for a single return and, except
6 as otherwise provided under this subdivision, $15,000.00 for a
7 joint return. If both the husband and the wife filing a joint
8 return receive retirement or pension benefits from employment
9 with a governmental agency that was not covered by the federal
10 social security act, chapter 532, 49 Stat. 620, the sum of the
11 deductions under subsection (1)(f)(i), (ii), and (iv) is limited to
12 $30,000.00 for a joint return.
13 (e) Except as otherwise provided under subdivision (d), for
14 a person born after 1952, the deduction under subsection
15 (1)(f)(i), (ii), or (iv) does not apply. When that person reaches
16 the age of 67, that person is eligible for a deduction of
17 $20,000.00 for a single return and $40,000.00 for a joint return,
18 which deduction is available against all types of income and is
19 not restricted to income from retirement or pension benefits. If
20 a person takes the deduction of $20,000.00 for a single return
21 and $40,000.00 for a joint return, that person shall not take the
22 deduction under subsection (1)(f)(iii) and shall not take the
23 personal exemption under subsection (2). That person may elect
24 not to take the deduction of $20,000.00 for a single return and
25 $40,000.00 for a joint return and elect to take the deduction
26 under subsection (1)(f)(iii) and the personal exemption under
27 subsection (2) if that election would reduce that person's tax
1 liability. A person that who takes the deduction
under subsection
2 (1)(e) is not eligible for the unrestricted deduction of
3 $20,000.00 for a single return and $40,000.00 for a joint return
4 under this subdivision.
5 (f) For a joint return, the limitations and restrictions in
6 this subsection shall be applied based on the age of the older
7 spouse filing the joint return.
8 (10) As used in this section, "oil and gas" means oil and
9 gas that is subject to severance tax under 1929 PA 48, MCL
10 205.301 to 205.317.
11 Sec. 311. (1) The taxpayer on or before the due date set for
12 the filing of a return or the payment of the tax, except as
13 otherwise provided in this part, shall make out a return in the
14 form and content as prescribed by the department, verify the
15 return, and transmit it, together with a remittance of the amount
16 of the tax, to the department.
17 (2) Except as otherwise provided in subsection (5), the
18 department, upon application of the taxpayer and for good cause
19 shown, may extend under prescribed conditions the time for filing
20 the annual or final return required by this part. Before the
21 original due date, the taxpayer shall remit with an application
22 for extension the estimated tax due. In computing the tax due for
23 the tax year, interest at the rate established in, and penalties
24 imposed by, section 23 of 1941 PA 122, MCL 205.23, shall be added
25 to the amount of tax unpaid for the period of the extension. The
26 department may require a tentative return and payment of an
27 estimated tax.
1 (3) Taxpayers who are husband and wife and who file a joint
2 federal income tax return pursuant to the internal revenue code
3 shall file a joint return. Taxpayers who file a joint federal
4 income tax return pursuant to the internal revenue code may file
5 a joint return.
6 (4) Except as provided in subsection (5), if the taxpayer
7 has been granted an extension or extensions of time within which
8 to file a final federal return for a taxable year, the filing of
9 a copy of the extension or extensions automatically extends the
10 due date of the final return under this part for an equivalent
11 period. The taxpayer shall remit with the copy of the extension
12 or extensions the estimated tax due. In computing the tax due for
13 the tax year, interest at the rate established in, and penalties
14 imposed by, section 23 of 1941 PA 122, MCL 205.23, shall be added
15 to the amount of tax unpaid for the period of the extension.
16 (5) If the taxpayer is eligible for an automatic extension
17 of time within which to file a federal return based on service in
18 a combat zone, the due date for filing an annual or final return
19 or a return and payment of an estimated tax under this part is
20 automatically extended for an equivalent period of time. The
21 taxpayer is not required to file a copy of any federal extension,
22 but shall print "COMBAT ZONE" in red ink at the top of his or her
23 return when the return is filed. The taxpayer is not required to
24 pay the amount of tax due at the time the return is originally
25 due, and the department shall not impose any interest or
26 penalties for the amount of tax unpaid for the period of the
27 extension.
1 Sec. 504. (1) "Blind" means a person with a permanent
2 impairment of both eyes of the following status: central visual
3 acuity of 20/200 or less in the better eye, with corrective
4 glasses, or central visual acuity of more than 20/200 if there is
5 a field defect in which the peripheral field has contracted to
6 such an extent that the widest diameter of visual field subtends
7 an angular distance of not greater than 20 degrees in the better
8 eye.
9 (2) "Claimant" means an individual natural person who filed
10 a claim under this chapter and who was domiciled in this state
11 during at least 6 months of the calendar year immediately
12 preceding the year in which the claim is filed under this chapter
13 and includes a husband and wife if they are required to
14 individuals who file a joint state income tax return. The 6-month
15 residency requirement does not apply to a claimant who files for
16 the home heating credit under section 527a.
17 Sec. 522. (1) The amount of a claim made pursuant to this
18 chapter shall be determined as follows:
19 (a) A claimant who is not a senior citizen is entitled to a
20 credit against the state income tax liability under this part
21 equal to 60% of the amount by which the property taxes on the
22 homestead, or the credit for rental of the homestead for the tax
23 year, exceeds 3.5% of the claimant's total household resources
24 for that tax year.
25 (b) A claimant who is a senior citizen is entitled to a
26 credit against the state income tax liability under this part
27 equal to the following:
1 (i) For a claimant with total household resources of
2 $21,000.00 or less, an amount as determined in accordance with
3 subdivision (c).
4 (ii) For a claimant with total household resources of more
5 than $21,000.00 and less than or equal to $22,000.00, an amount
6 equal to 96% of the difference between the property taxes on the
7 homestead or the credit for rental of the homestead for the tax
8 year and 3.5% of total household resources.
9 (iii) For a claimant with total household resources of more
10 than $22,000.00 and less than or equal to $23,000.00, an amount
11 equal to 92% of the difference between the property taxes on the
12 homestead or the credit for rental of the homestead for the tax
13 year and 3.5% of total household resources.
14 (iv) For a claimant with total household resources of more
15 than $23,000.00 and less than or equal to $24,000.00, an amount
16 equal to 88% of the difference between the property taxes on the
17 homestead or the credit for rental of the homestead for the tax
18 year and 3.5% of total household resources.
19 (v) For a claimant with total household resources of more
20 than $24,000.00 and less than or equal to $25,000.00, an amount
21 equal to 84% of the difference between the property taxes on the
22 homestead or the credit for rental of the homestead for the tax
23 year and 3.5% of total household resources.
24 (vi) For a claimant with total household resources of more
25 than $25,000.00 and less than or equal to $26,000.00, an amount
26 equal to 80% of the difference between the property taxes on the
27 homestead or the credit for rental of the homestead for the tax
1 year and 3.5% of total household resources.
2 (vii) For a claimant with total household resources of more
3 than $26,000.00 and less than or equal to $27,000.00, an amount
4 equal to 76% of the difference between the property taxes on the
5 homestead or the credit for rental of the homestead for the tax
6 year and 3.5% of total household resources.
7 (viii) For a claimant with total household resources of more
8 than $27,000.00 and less than or equal to $28,000.00, an amount
9 equal to 72% of the difference between the property taxes on the
10 homestead or the credit for rental of the homestead for the tax
11 year and 3.5% of total household resources.
12 (ix) For a claimant with total household resources of more
13 than $28,000.00 and less than or equal to $29,000.00, an amount
14 equal to 68% of the difference between the property taxes on the
15 homestead or the credit for rental of the homestead for the tax
16 year and 3.5% of total household resources.
17 (x) For a claimant with total household resources of more
18 than $29,000.00 and less than or equal to $30,000.00, an amount
19 equal to 64% of the difference between the property taxes on the
20 homestead or the credit for rental of the homestead for the tax
21 year and 3.5% of total household resources.
22 (xi) For a claimant with total household resources of more
23 than $30,000.00, an amount equal to 60% of the difference between
24 the property taxes on the homestead or the credit for rental of
25 the homestead for the tax year and 3.5% of total household
26 resources.
27 (c) A claimant who is a senior citizen with total household
1 resources of $21,000.00 or less or a paraplegic, hemiplegic, or
2 quadriplegic and for tax years that begin after December 31,
3 1999, a claimant who is totally and permanently disabled or deaf
4 is entitled to a credit against the state income tax liability
5 for the amount by which the property taxes on the homestead, the
6 credit for rental of the homestead, or a service charge in lieu
7 of ad valorem taxes as provided by section 15a of the state
8 housing development authority act of 1966, 1966 PA 346, MCL
9 125.1415a, for the tax year exceeds the percentage of the
10 claimant's total household resources for that tax year computed
11 as follows:
12 Total household resources Percentage
13 Not over $3,000.00 .0%
14 Over $3,000.00 but not over $4,000.00 1.0%
15 Over $4,000.00 but not over $5,000.00 2.0%
16 Over $5,000.00 but not over $6,000.00 3.0%
17 Over $6,000.00 3.5%
18 (d) A claimant who is an eligible serviceperson, eligible
19 veteran, or eligible widow or widower is entitled to a credit
20 against the state income tax liability for a percentage of the
21 property taxes on the homestead for the tax year not in excess of
22 100% determined as follows:
23 (i) Divide the taxable value allowance specified in section
24 506 by the taxable value of the homestead or, if the eligible
25 serviceperson, eligible veteran, or eligible widow or widower
26 leases or rents a homestead, divide 17% of the total annual rent
1 paid for tax years before the 1994 tax year, or 20% of the total
2 annual rent paid for tax years after the 1993 tax year on the
3 property by the property tax rate on the property.
4 (ii) Multiply the property taxes on the homestead by the
5 percentage computed in subparagraph (i).
6 (e) A claimant who is blind is entitled to a credit against
7 the state income tax liability for a percentage of the property
8 taxes on the homestead for the tax year determined as follows:
9 (i) If the taxable value of the homestead is $3,500.00 or
10 less, 100% of the property taxes.
11 (ii) If the taxable value of the homestead is more than
12 $3,500.00, the percentage that $3,500.00 bears to the taxable
13 value of the homestead.
14 (2) A person who is qualified to make a claim under more
15 than 1 classification shall elect the classification under which
16 the claim is made.
17 (3) Only 1 claimant per household for a tax year is entitled
18 to the credit, unless both the husband and wife individuals
19 filing a joint return are blind, then each shall be considered a
20 claimant.
21 (4) As used in this section, "totally and permanently
22 disabled" means disability as defined in section 216 of title II
23 of the social security act, 42 USC 416.
24 (5) A senior citizen who has total household resources for
25 the tax year of $6,000.00 or less and who for 1973 received a
26 senior citizen homestead exemption under former section 7c of the
27 general property tax act, 1893 PA 206, may compute the credit
1 against the state income tax liability for a percentage of the
2 property taxes on the homestead for the tax year determined as
3 follows:
4 (a) If the taxable value of the homestead is $2,500.00 or
5 less, 100% of the property taxes.
6 (b) If the taxable value of the homestead is more than
7 $2,500.00, the percentage that $2,500.00 bears to the taxable
8 value of the homestead.
9 (6) For a return of less than 12 months, the claim shall be
10 reduced proportionately.
11 (7) The department may prescribe tables that may be used to
12 determine the amount of the claim.
13 (8) The total credit allowed in this section for each year
14 after December 31, 1975 shall not exceed $1,200.00 per year.
15 (9) The total credit allowable under this part and part 361
16 of the natural resources and environmental protection act, 1994
17 PA 451, MCL 324.36101 to 324.36117, shall not exceed the total
18 property tax due and payable by the claimant in that year. The
19 amount by which the credit exceeds the property tax due and
20 payable shall be deducted from the credit claimed under part 361
21 of the natural resources and environmental protection act, 1994
22 PA 451, MCL 324.36101 to 324.36117.