Snyder administration has plan to deal with federal tax hit

Jan 8, 2018

State Treasurer Nick Khouri.

Governor Rick Snyder has proposed a plan to offset tax increases on Michigan families as a result of the federal tax overhaul. The main component is to allow Michigan taxpayers to continue to claim a four thousand dollar personal exemption on their state taxes.

“The number of exemptions you can claim on your Michigan tax form is tied directly to how many exemptions you can claim on your federal tax form," said state Treasurer Nick Khouri. "As part of federal tax reform just signed last month, it eliminated personal exemptions, including in Michigan. It was an unintended consequence.”

Kouri says that would cost a typical family of four in Michigan $680 on their 2018 taxes. The plan would also increase the Michigan personal exemption over three years.

The federal tax plan would result in a $1.5 billion increase in state taxes without action from the governor and the Legislature. 

Some Republicans in the Legislature have called, instead, for a rollback in the state income tax rate.