ADA TOWNSHIP, Mich. — When you think about retirement, you may picture a condo on a tropical beach, more time to read or more time with friends and family.
While we know many Michiganders love to head south for warmer weather, state lawmakers hope new relief for retirees may entice them to picture their retirement on a Michigan beach instead.
In March of 2023, state lawmakers rolled back the retirement tax by enacting the "Lowering MI Costs" Plan into law. The legislation puts $1,000 back in the pockets of about half a million households across the state.
It's something Governor Whitmer has wanted to do since it was first enacted in 2011, back when she was Senate Minority Leader under Governor Rick Snyder.
"14 years later, I'm governor and I got to sign the bill that actually repealed it," Whitmer tells FOX 17 Thursday.
Now, the 2023 tax season will be the first that retirees see some savings.
At the Michigan Education Association Office in Ada, East Grand Rapids State Rep. Phil Skaggs (D) told a room of retirees, "we want our families to be happy, healthy, safe and nearby."
To keep our loved ones nearby, lawmakers said Thursday that starts with creating a more affordable future.
Skaggs joked to the room, "It's about keeping Nana in Michigan."
"Nanas" like Lynn Mason, who told us she had to be sure to tell Governor Whitmer, that her two-year-old granddaughter says "hi."
Mason retired in 2012 after being a teacher for 31 years and she remembers when the retirement tax was added.
"It was heartbreaking in 2011," says Lynn, "I knew that the projected costs, what that was going to cost us for a long time, and I knew it was going to be expensive, and I knew it was going to be hard."
She says having that extra thousand dollars, will go a long way.
"I can remember where a bag of groceries would be $5, and now it's more like $25 for a bag of groceries or more," adds Mason.
West Michigan State Rep Carol Glanville (D) helped sponsor the repeal, and says she is proud to deliver this kind of relief.
"It was a proud moment, along with a lot of the other things we got to do right at the beginning of the year last year. So, excited that we are able to get that in place, and that it's going to take effect here for this tax year, and we're going to be able to provide that kind of relief, the relief that our seniors need," says Rep. Glanville.
For most retirees, it will take until 2026 for the retirement tax to be fully phased out.
But former public employees like firefighters, police officers, or county corrections officers — they won't pay any portion of the retirement tax starting this season.
"One of the great strengths of the state is that it's got an affordable cost of living, high quality of life," says Gov. Whitmer. "We boast 21% of the world's fresh surface water, some of the greatest institutions of higher education on the planet, and so we've got a powerful story to tell."
As these changes are very nuanced, lawmakers recommend speaking with your tax advisor to discuss how all of these will specifically impact you.
Tax Day is Monday, April 15.
You can also learn more about the repeal of the retirement tax here.
