From AARP: "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 may be subtracted from Michigan taxable income. Benefits in excess of these limits are taxable to Michigan."
Maybe. It depends on your age. Social Security benefits are exempt from tax in Michigan.
As for private pension - it depends on when you were born.
Born Before 1946
- may subtract all qualifying pension and retirement benefits received from public sources.
- may subtract private pensions up to $49,811 for single or married filing separately filers and $99,623 for joint filers.
- Born Between January 1, 1946 through January 1, 1949
- A single filer may subtract $20,000 and joint filers may subtract $40,000 for a Michigan Standard Deduction.
- Born After January 1, 1949 through December 31, 1952
- A single filer may subtract $20,000 and joint filers may subtract $40,000 for a Michigan Standard Deduction on Schedule 1, line 24.
- Generally, all pension or retirement benefits (public and private) are treated the same unless the recipient also has significant benefits from service in the U.S. Armed Forces or Michigan National Guard, or receives taxable railroad retirement benefits.
On or after January 1, 1953 but before January 2, 1954
If you have reached age 62 and receive retirement benefits from employment exempt from Social Security may deduct up to $15,000 in qualifying pension and retirement benefits. If both spouses on a joint return receive Social Security exempt retirement benefits, the maximum deduction increases to $30,000.
Taxpayers born after 1952
All other recipients born after 1952, all pension and retirement benefits are taxable and you are not entitled to
a pension subtraction.
For more information see instructions for MI Form 4884 - Pension Schedule