Here is a brief outline of major tax changes in the state of Michigan that start January 1, 2012.
Business Tax Changes:
- Michigan Business Tax is replaced by the Corporate Income Tax which taxes corporate income at a rate of 6%.
- S Corporation, limited liability companies and partnerships would not be subject to this tax unless they elect to be taxed as a C Corporation for Federal income tax purposes.
Individual Tax Changes:
- Non-refundable credits i.e. city income tax credit, public contribution credits and homeless food bank credits to name a few are eliminated.
- Pension and retirement income deductions have been modified based on the age of the taxpayer.
- Tax rate will remain at 4.35% until January 1, 2013.
- $600 exemption for taxpayer’s dependents under the age of 19 is eliminated.
