4924, Withholding Certificate for Michigan Pension or Annuity - michigan-2025

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Are pensions or retirement income taxed in Michigan? Yes, but its complicated. In tax year 2023, Michigan began a four-year phase-out of its retirement income tax. By the 2026 tax year, pensions and income from 401(k) and IRA withdrawals will be fully exempt from state income tax.
Effective January 1, 2012, Michigans tax treatment of pension and retirement benefits changed and these benefits are subject to income tax for many recipients. Michigan law requires the administrators of pension and retirement benefits to withhold income tax on payments that will be subject to tax.
MI-W4 Employees Michigan Withholding Exemption Certificate The information supplied on the MI-W4 form is used to determine the amount of Michigan income tax to withhold from your paychecks.
In general, payers must withhold 4.25 percent on all distributions that are subject to Michigan income tax, unless the payer receives a withholding certificate from a retiree that directs otherwise.
Purpose of form. Complete Form W-4P to have payers withhold the correct amount of federal income tax from your periodic pension, annuity (including commercial annuities), profit-sharing and stock bonus plan, or IRA payments. Federal income tax withholding applies to the taxable part of these payments.

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The tax system in Michigan offers several advantages to the senior citizen. In addition to their regular personal deduction of $2,900, persons 65 years or older are entitled to an additional exemption of $1,900 on their state income tax returns.
For the 2024 income tax returns, the individual income tax rate for Michigan taxpayers is 4.25 percent, and the personal exemption is $5,600 for each taxpayer and dependent. An additional personal exemption is available if you are the parent of a stillborn child delivered in 2024.

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