Hello BillM223,
From my understanding, based on new Michigan law, when selecting “yes” for public safety officer, the program should be exempting pension income from the state tax portion. However, it is not exempting it. Only when choosing “military pension” does it exempt it (but it is not a military pension it is a qualified government/public pension). Federal taxes are not affected by this law, and are taxed.
Also, it’s really confusing when it doesn’t save the “yes” for public officer, and you have to change it every time you go back. That is going to mess up a lot of people’s taxes that don’t catch that (my opinion).
I spoke to two agents already about this issue, and they both agreed that there was an issue here (for both of these points). But I don’t see it resolved.
Thanks to advise if I’m missing something here, or when this issue will be fixed. If I didn’t catch the fact that it taxed this pension income, I would probably have filed this way (and lost about $1000).
