For Michigan, when you were born determines how much if any of your pension you can exclude from Michigan taxes.
- If you were born before 1946 you may subtract all qualifying pension and retirement benefits received from public sources (Michigan Public School retirement is a public source)
- If you were born between January 1, 1946 through January 1, 1949 you are eligible for a deduction against all income. It's not specifically a pension exclusion. The amount is $20,000 for single and $40,000 for joint returns.
- If you were born from January 1, 1949 through December 31, 1952 you may subtract the first $20,000 for single or married filing separately, or $40,000 for married filing jointly, of all private and public pension and annuity benefits. Benefits in excess of these limits are taxable to Michigan.
- If you were born after 1952, all pension distributions are taxable, unless you meet an exception.
See this link for more information: http://www.michigan.gov/taxes/0,4676,7-238-43513-372300--,00.html
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