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HB 4001

Individual income tax: retirement or pension benefits; limitations and restrictions on deductions of certain retirement or pension benefits, revenue distributions, earned income tax credit, rebate payments, rebate and revitalization and placemaking funds; revise, increase, and provide for. Amends title & secs. 30, 51, 272 & 695 of 1967 PA 281 (MCL 206.30 et seq.) & adds secs. 51h, 476 & 696.

2023-2024 Regular Session Introduced by Abraham Aiyash and 45 co-sponsors

Michigan restricts retirement income tax deductions while expanding earned income credits and creating revitalization funds through redistributed revenues.

assigned PA 4'23
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Bill Summary · HB 4001

Legislative bill overview

HB 4001 modifies Michigan's individual income tax treatment of retirement and pension benefits by imposing new limitations and restrictions on deductions for certain retirement income. The bill also restructures revenue distributions, adjusts the Earned Income Tax Credit (EITC), and establishes new rebate and revitalization/placemaking funds to redistribute collected revenues.

Why is this important

This legislation affects how Michigan taxes retirees and pension recipients—a significant portion of the population—while simultaneously creating new tax credit mechanisms and economic development funding. The changes will impact state revenue collection, retirement planning decisions, and fund allocation for community revitalization projects across Michigan.

Potential points of contention

  • Fairness in retirement taxation: Changes to pension/retirement deductions may burden some retirees while benefiting others, raising questions about horizontal equity across income levels
  • Revenue allocation priorities: Deciding how to distribute new revenues between EITC expansion, rebates, and placemaking funds involves competing policy goals with different constituencies
  • Economic development effectiveness: The creation of revitalization and placemaking funds assumes targeted spending is effective—outcomes depend heavily on implementation and local conditions

Compiled from official sources — confirm details with the bill’s official record.

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