2025 Michigan Form 4884 adjusted to zero by Michigan Department of Treasury

Similar issue where pension income from deceased spouse was removed from subtractions, income recalculated and refund reduced.  I think my issue was because the deceased spouse name, DOB, SSN, etc was not included on the worksheet or 4884.  Still investigating...

Oh that worries me because I will be filing MI 4884 soon.

For comparison you could use the Michigan Department of Treasury websites " 2025 Retirement and Pension Estimator" as a double check. You don't have to put in your actual birthday but you want the birth year correct.

In my case it matches turbo tax. If yours matches turbo tax that would be good backup to have if the letter gives you a way to respond to their change.

I just got off the phone with the Michigan Treasury as I had the same issue.  I have to resubmit my Form 4884 to include the Part 2: Deceased Spouse Information. 

I received the same letter for my mom's return.  She died in 2025 at 93 years old, so I don't understand why.  Filling out the "2025 Retirement and Pension Estimator" shows that TurboTax was correct.  The only minor thing that could have triggered this is that box 7 of the 1099-R has a 4.  Maybe they want my dad's information on the 4884?  It worked without it for the last few years...

I just received the same notice from the State of Michigan.  They zeroed out the retirement benefits submitted on Form 4884.  My husband is 64 (birthday in 1961) and qualifies for this deduction.  I manually went through the instructions and can subtract up to $64,040 if married filing a joint return.  His retirement income is less than that so 100% qualifies per Worksheet 3.3 on page 25 of the 1040 instructions.  I just submitted a response to the letter via their online portal and asked for more information because I can't respond correctly if I don't know why it was adjusted.  TurboTax completed the same calculation and forms for 2024 and that went through ok.  I think the State is incorrect.  

I think I finally figured out the issue, Turbo Tax included a lump sum pension payment with a distribution Code of G, direct rollover to a ROTH IRA in my retirement income for the State of Michigan.  That is not allowed by Michigan, and may be why the total Retirement and Pension Benefits Subtraction was set to $0.00.  Even though the eligible amounts were still enough to get a subtraction and a refund.  I'm filing an amendment to remove that item from Line 8 of Form 4884.  Turbo Tax should correct or auto check this. 

The same thing happened to us. My husband and I both have pensions through MPSERS, so they are paid by the state of Michigan. The total amount for both of us was adjusted to zero. I responded to the notice on February 22nd, sending all of my documentation,  heard nothing until this past Friday, May 15th, when I received the letter saying I owed interest and penalty as well as the tax amount. This letter was dated May 19, four days post-dated, and is apparently the latest glitch - a friend of mine received the same letter, stating that she owed over  $300 in penalties and interest on a $0 balance. 

In addition, my 97 year old mother-in-law, who has been receiving both her own and my deceased father-in-law's MPSERS pensions or 305 years received notification that my father-in-law's pension was "adjusted" but hers was fine.

I have filled out the form requesting an "informal hearing" and sent all of my paperwork yet again, but with the massive mess that is the result of the Treasury Department changing its computer system, I hold out little hope that I'll be hearing anything in the near future. 

Hello Nac64,

Please check out the MI Form 4884 Instructions:

https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/IIT/TY2025/4884-Instr.pdf?rev=463a27a0709a45b4a3205a043f7049a2&hash=421F945C27FB31BB663CCAF57A1E8C20

My grandmother received the same letter from the Michigan Treasury.  She is receiving surviving spouse benefits.  I reviewed the instructions for MI Form 4884 and found that there is a cap on the retirement benefit exclusion.  Because she's filing Single and her deceased spouse was born before 1946, her cap for the retirement benefit exclusion is $65,897.  Since the combined retirement income from all sources exceeded this amount.  The entire surviving spouse portion is excluded.

With that said, when completing the actual form, the questions to calculate the eligible pension income do not allow for the surviving spouse pension to be subtracted.  So the fact that you reviewed the return and found no errors makes sense.  I plan on contacting the state regarding this and will provide an update once I hear back from them. 

I think you maybe confused, MI does not have a max allowable pension value, it’s the max pension subtraction that is capped at the number you mentioned.  Other comments on this thread sounds like you have to include deceased spouse info on the form to have it allowed. I’d call the help line (took 14 try’s last time, menu 5, then 2, finally got into 25 minute wait queue) and see if they can provide any additional help with the form.  My last call clarified my situation with a non-allowed code G on one of my 1099-Rs, so I removed it on my declared pension subtraction table in my amendment .