BREAKING NEWS – THURSDAY 4:48PM
The bill, SB 1, which passed committee yesterday, was passed by the full Senate today rolling back the state’s tax law on pensions and passing with a vote of 23-15 which would roll back changes to the retirement tax that were made in 2011.
A substitute for SB 1 was adopted prior to passage which would eliminate a four-year phasing in period for the bill, making the changes effective during the 2023 tax year rather than being fully phased in by 2026.
The bill would allow seniors with pension or other retirement benefits to either continue with the Snyder-era taxation formula or revert to the pre-2012 system. Prior to the changes that began with the 2012 tax year, pensions from public sector jobs were fully exempt from the state income tax and retirement benefits from private sector jobs were subject to a large deduction, $42,240 for singles and $84,480 for those filing jointly with those adjusting for inflation.
The bill makes a housekeeping change to adjust them for inflation in the statute, meaning the 2023 deductions will be $56,961 for singles and $113,922 for those filing jointly.
The bill now goes to the House for consideration.