Michigan 2023 public safety pension deduction

[retiredpopo]

Michigan updated its retirement and pension exceptions for income tax. According to the changes in MCL 206.30, Option 2 is a special provision for fire, police and corrections officers to be able to fully deduct qualified pension payments. When will this change be effective in TT software for those who receive a qualified law enforcement pension? The law is to take effect 91 days after the close of the 2023 session.

[AmyC · Accepted solution]

Correct, MI has changed the laws but not all forms are ready. Please check here for updates.

[retiredpopo]

Thank you

[ckooyer]

You've seen the other questions about Michigan Public Act 4 of 2023 and the exemption from state income taxes for public safety retirees, regardless of age. I am in the group of confused TT customers as to why TT is not accurately computing my MI state tax obligation.

I see that Michigan form 4884 (Pension Schedule, to be included with my return) shows available on TT (as your click here link instructed) but it is not listed under my forms when I tab between Easy Step and Forms. I only find it when I search for it under Open Form and even there I cannot modify it. 

Since the law is already in effect (Feb 13, 2024 according to the State of MI FAQs page for the situation) and the form is available on TT, why doesn't TT allow me to complete an accurate MI tax return and when can I expect TT to be able to?

This is really a hit to TT's reputation and inability to be ready for the tax season. Thank you for whatever prodding you can do to get this resolved.

[LindaS5247]

We would like to take a deeper look into this message to assist you.  In order to do this, it would be helpful to have a TurboTax ".tax2023" file that is experiencing this issue. You can send us a “diagnostic” file that has your “numbers” but not your personal information.

 If you would like to do this, here are the instructions:

For TurboTax Online:

1.  Go to the black panel on the left side of your program and select Tax Tools. 
2. Then select Tools below Tax Tools.
3. A window will pop up which says Tools Center.
4. On this screen, select Share my file with Agent.
5. You will see a message explaining what the diagnostic copy is. Click okay through this screen and then you will get a Token number.
6. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.

Here are the instructions if you are using TurboTax CD/Download:

1. Click on Online in the top left menu of TurboTax CD/Download for Windows
2. Select 'Send Tax File to Agent'
3. Write down or send an image of your token number then place in this issue.
4. We can then review your exact scenario for a solution.
5. Please also tell us any states included in the return.

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

Remember to reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.

[ckooyer]

I was able to submit my return with a workaround to the glitch that must be preventing the easy step to proceed as needed. 

Once I completed the federal and was in the state, I opened the 4884 and went down to quick view to review my pension worksheet entries. For some reason in easy step, the question about the pension being from public safety was not being retained. In the form I was able to check the box, it retained the choice,  and TT then properly calculated the credit. I hope someone can fix this glitch. Thank you for the reply.  

[StreetCop]

Yesterday (02/28/24) I was able to find a relatively simple work around for TT's failure to fully impliment this new law.  I called the TT help number and a really good guy named Steven from FL spent an hour with me as we tried various fixes. 

Apparently the pensinon exemption works just fine for older folks as the new law has a tiered aged based enactment for the other categories (teacher, etc).  So...

We changed my DOB to 1950.  The program then correctly recalculated to show the correct State return amount (about $2,100 higher in my case).  I then changed my DOB back to the correct year and the previous re-calculations remained.  Error checks worked and the return was submitted.

My return has been accepted by MI, lets see if the money comes..