Individual Income Tax 2016 - Michigan

MICHIGAN'S INDIVIDUAL INCOME TAX

2016

Michigan Department of Treasury Office of Revenue and Tax Analysis

Tax Analysis Division December 2018

MICHIGAN'S INDIVIDUAL INCOME TAX

2016

Tax Analysis Division December 2018

This report was prepared by Denise T. Heidt under the direction of Howard Heideman, Director of Tax Analysis Division, Office of Revenue and Tax Analysis (ORTA). Scott Darragh, and Eric Krupka of ORTA provided assistance.

TABLE OF CONTENTS

Page

I. EXECUTIVE SUMMARY ............................................................................ 1

Returns and Revenue ................................................................................................... 1 Interstate Comparisons................................................................................................. 1 Property Tax Credit...................................................................................................... 1 Home Heating Credit ................................................................................................... 2 Michigan Earned Income Tax Credit (EITC) .............................................................. 2 Historic Preservation Credit......................................................................................... 2 Credit for Income Paid to Another State...................................................................... 2 Use Tax Payments........................................................................................................ 2 Tax Law Changes in 2017 ........................................................................................... 2

II. INTRODUCTION......................................................................................... 4

III. HISTORY OF THE MICHIGAN INDIVIDUAL INCOME TAX............. 5

USE TAX PAYMENTS .............................................................................................. 8

IV. INCIDENCE OF THE INDIVIDUAL INCOME TAX............................ 10

V. INCOME TAX CREDITS .......................................................................... 21

REFUNDABLE CREDITS ....................................................................................... 21 Homestead Property Tax Credit................................................................................. 21 Home Heating Credit ................................................................................................. 24 Michigan Earned Income Tax Credit......................................................................... 25

NON-REFUNDABLE CREDITS ............................................................................. 25 Historic Preservation Credit....................................................................................... 25 Credit for Income Paid to Another State.................................................................... 26

VI. DESIGNATED CONTRIBUTIONS......................................................... 27

State Campaign Fund................................................................................................. 27 Children's Trust Fund ................................................................................................ 27 Military Family Relief Fund ...................................................................................... 27 Children of Veterans Tuition Grant Program ............................................................ 28 Other Funds................................................................................................................ 28

VII. INTERSTATE COMPARISONS ............................................................ 30

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VIII. GEOGRAPHIC PATTERN OF TAX AND CREDITS ......................... 33

IX. FEDERAL INCOME TAX INTERACTION ........................................... 34

Summary of Federal Tax Law Changes Passed Before 2018.................................... 34 2016............................................................................................................................ 35 2017............................................................................................................................ 35 2018............................................................................................................................ 35

X. MICHIGAN PUBLIC ACTS ? INCOME TAX......................................... 37

2016............................................................................................................................ 37 2017............................................................................................................................ 37

XI. EXHIBITS 25 THROUGH 40................................................................... 39

XII. APPENDIX A ........................................................................................... 60

FEDERAL TAX LAW CHANGES (from 2010 through 2015) ............................... 61 2010............................................................................................................................ 61 2011............................................................................................................................ 61 2012............................................................................................................................ 61 2013............................................................................................................................ 63 2014............................................................................................................................ 64 2015............................................................................................................................ 64

MICHIGAN PERSONAL INCOME TAX LEGISLATIVE HISTORY (1967 ? 2015)...................................................................................... 66

1967............................................................................................................................ 66 1968............................................................................................................................ 66 1969............................................................................................................................ 66 1970............................................................................................................................ 67 1971............................................................................................................................ 67 1972............................................................................................................................ 67 1973............................................................................................................................ 68 1974............................................................................................................................ 68 1975............................................................................................................................ 69 1976............................................................................................................................ 69 1977............................................................................................................................ 70 1978............................................................................................................................ 70 1979............................................................................................................................ 70 1980............................................................................................................................ 71 1981............................................................................................................................ 71 1982............................................................................................................................ 72 1983............................................................................................................................ 72

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1984............................................................................................................................ 73 1985............................................................................................................................ 73 1986............................................................................................................................ 74 1987............................................................................................................................ 74 1988............................................................................................................................ 75 1989............................................................................................................................ 76 1990............................................................................................................................ 76 1991............................................................................................................................ 76 1992............................................................................................................................ 77 1993............................................................................................................................ 77 1994............................................................................................................................ 78 1995............................................................................................................................ 78 1996............................................................................................................................ 79 1997............................................................................................................................ 80 1998............................................................................................................................ 80 1999............................................................................................................................ 81 2000............................................................................................................................ 81 2001............................................................................................................................ 82 2002............................................................................................................................ 82 2003............................................................................................................................ 83 2004............................................................................................................................ 84 2005............................................................................................................................ 84 2006............................................................................................................................ 85 2007............................................................................................................................ 85 2008............................................................................................................................ 86 2009............................................................................................................................ 87 2010............................................................................................................................ 87 2011............................................................................................................................ 88 2012............................................................................................................................ 90 2013............................................................................................................................ 91 2014............................................................................................................................ 91 2015............................................................................................................................ 92

MICHIGAN INCOME TAX REQUIREMENTS (1967 ? 2017).............................. 94

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