Schmidt supports legislation aiding Michigan families

Senator Wayne Schmidt

Senator Wayne Schmidt

LANSING, Mich. — State Sen. Wayne Schmidt supports legislation that would restore the Michigan personal tax exemption that was lost in the recent federal tax reform.

The federal Tax Cuts and Jobs Act, in addition to lowering income tax rates, included a streamlined exemption process that eliminated the $4,050 personal exemption at the federal level, setting it to zero.

“There has been a lot of information surrounding what the new federal tax plan is going to mean for Michigan families,” said Schmidt, R-Traverse City.

Michigan’s current state income tax law ties the state’s personal exemptions to the federal number of exemptions. Without a revision to the law, Michigan taxpayers would no longer be able to claim the personal exemptions on their state taxes — which would cost state taxpayers around $1.5 billion a year.

Senate Bill 748 makes necessary changes to maintain the state’s personal exemption.

“This exemption is critical to many Michigan families, and without this action, they will lose it,” Schmidt said. “This legislation would ensure the state’s personal exemption remains regardless of changes on the federal level — and will do so without affecting other important portions of the budget like school aid.”

The legislation would also provide an increase in the state personal exemption by $500 to $4,800 by 2021, while remaining tied to inflation. Currently, the state’s personal tax exemption is scheduled to increase from $4,000 to $4,300 over the next three years.

“In recent years our state budget has stabilized and we have approved several reforms aimed at improving the state’s financial outlook,” Schmidt said. “It is time to start looking at ways to give families throughout my district and our state some relief. This bill would put more money in the pockets of taxpayers where it belongs.”

According to Senate Finance Committee Chairman Jack Brandenburg, the sponsor of SB 748, the committee will hold a hearing on the bill on Tuesday, Jan. 16.