State Rep. Steve Carra and the Michigan House of Representatives today voted to approve a plan to reduce taxes for working families and expand tax savings for seniors.

The plan, which would provide an estimated $2.5 billion in annual tax relief, is contained in Senate Bill 768.

“People don’t need handouts or centralized programs; they need less government intrusion into their lives and livelihoods,” said Carra, R-Three Rivers. “This plan will reduce taxes for everyone: whether they’re retired or pursuing their career, whether farming fields, counting up cash registers, or manning machinery — letting them keep more of their hard-earned money.”

The plan would lower Michigan’s individual income tax rate from 4.25% to 3.9%, reducing the burden on working and retired families across Michigan. The plan would also allow parents to receive a child tax credit of up to $500 per dependent under the age of 19.

In addition to paying a lower rate, seniors 62 years and older would be able to exempt $20,000 of all their income from the state income tax, or $40,000 for couples filing jointly. Eligibility for this exemption currently begins at age 67. The plan would further enable seniors to deduct retirement income — such as pensions, 401(k) plans and individual retirement accounts — not already included in the first exemption. This additional deduction would also allow up to $20,000 for individual filers and $40,000 for joint filers.

SB 768 now advances to the Senate for consideration.

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