Michigan residents could see bigger tax refunds this year if a proposal from Democratic state legislators picks up some Republican support.
Democrats, led by Gov. Gretchen Whitmer, are proposing the state issue $180 tax rebates, which they’re dubbing inflation relief checks, to Michigan residents who file returns for the 2022 tax year.
Unlike other checks sent by the federal and state governments in recent years, each income tax return would qualify for $180. That means a couple filing jointly would receive $180, as would a single filer, according to an analysis by the state’s House Fiscal Agency. Married taxpayers who file separately would each receive $90.
Taxpayers could receive the refund as a direct deposit into their bank account, or as a paper check by mail.
“Right now, inflation has driven the cost up on everyday goods, which is squeezing household budgets and forcing families to forego necessities,” Whitmer and state Democratic leaders said in a statement. “That’s why they sent us to Lansing to lower costs and put more money back into people’s pockets.”
The tax rebate would cost an estimated $800 million, which would come from the state’s $9 billion budget surplus. Plenty of other states used surplus from federal COVID-19 stimulus funds to issue inflation relief checks and other tax rebates to their residents last year.
It is not the only change Democrats in the Great Lakes state are proposing. They also want to expand the state’s Earned Income Tax Credit (EITC), which would benefit low-income workers in the state, and repeal the state’s tax on retirement income.
Republicans in the state call the proposal a gimmick, saying it doesn’t go far enough to provide lasting relief for families.
While Democrats control both the House and Senate in the Michigan legislature, they need some Republican support to pass the proposal because they want to send the checks out immediately, which requires a two-thirds majority of the state legislature, according to Bridge Michigan. Currently, their majorities are not big enough to reach that threshold.
If some Republicans jump onboard, the $180 tax rebates could be delivered as early as this spring to those who have filed their taxes already. Under the proposal, taxpayers have until October 18, 2023, to file their returns and qualify for the payment.
Learn how to navigate and strengthen trust in your business with The Trust Factor, a weekly newsletter examining what leaders need to succeed. Sign up here.
