Americans can claim relief checks between $35 and $1,849 - see who's eligible for money back to 'mak
MICHIGAN taxpayers can expect to receive larger relief checks when claiming income tax credit in the ongoing tax season and beyond.
The increased earned income tax credit comes as part of the new tax package signed by Governor Gretchen Whitmer last week.
WHAT IS THE BILL?
On Wednesday, Whitmer signed HB 4001 into law, raising earned income tax credit (EITC) and cuts back on retirement income taxes enacted in 2011.
Specifically, the legislation raises the EITC rate from six percent to 30 percent.
The taxes on retirement income will be phased out over the next four years, ending in 2026.
Whitmer celebrated the signing of the bill on social media while slamming the 2011 tax as “wrong.”
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“A single bill dealt a critical blow to people’s finances. Seniors had money that was promised to them taken out of their hands,” the governor said.
“Working families who were a missed paycheck away from poverty had a lifeline pulled away. It was wrong.”
She continued, insisting the newly signed legislation is “making it right.”
“We're rolling back the retirement tax to save half a million households an average of $1,000 a year and quintupling the Working Families Tax Credit to put an average refund of $3,150 back in the pockets of 700,000 families, directly benefiting half the kids in Michigan,” Whitmer said on Facebook.
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“This is a great day, Michigan!”
HOW MUCH MORE WILL YOU GET?
The increased tax credit will vary among taxpayers depending on their marriage status and number of eligible children.
Based on the 30 percent increase, the Citizens Research Council of Michigan calculated the specific amounts families can expect to see.
Overall, more than 700,000 eligible households should see an increase by nearly an average of $550.
Though, for some, it may be much higher.
The Citizens Research Council found that for single taxpayers earning $20,000 with two eligible children, they will see an increase of $1,479, with the EITC jumping from $370 to $1,849 with the new rate.
Single taxpayers earning $40,000 with two eligible children will see a $475 increase, with their EITC rising from $119 to $594.
The research council also estimated that single taxpayers earning $10,000 with no eligible children will see an increase of $119, with the EITC rising from $30 to $149.
Single taxpayers earning $15,000 with no eligible children will only see an increase of approximately $28, as their EITC will jump from $7 to $35.
Additionally, married/joint filers earning $20,000 with two eligible children are expected to see an increase of $1,479, with the EITC jumping from $370 to $1,849 with the new rate.
Joint filers earning $40,000 with two eligible children should expect a $786 increase in their EITC, with the amount rising from $196 to approximately $982.
WHEN WILL I SEE THE INCREASED PAYMENT?
As the tax credit expansion was enacted during the 2022 tax season, Michigan’s Department of Treasury has warned residents that the law still “has not yet taken effect.”
Individuals who claim EITC on their 2022 state 1040 form will receive the original 6 percent amount.
However, once the law does take effect, the treasury plans to “systematically schedule supplemental check payments” to cover the difference between the original and expanded tax credit amounts.
This means that some Michigan residents can expect to receive supplemental checks from $28 to $1,479 depending on their marriage status and number of eligible children.
The state treasury has urged tax payers to not “file an amended return or try to claim the increased Michigan EITC on your 2022 individual income tax return.”
WHAT DIDN’T MAKE THE BILL?
In addition to the expanded child tax credit, state Democrats were seeking to provide $180 relief checks for every tax filer in the state.
The checks were included in the original bill and only would have been sent out if it was made into law by before the end of the 2022 tax season, according to the Associated Press.
However, Democrats failed to garner enough support from their Republican constituents.
“Senate Republicans protected the automatic income tax rollback that is due to millions of Michigan residents who need permanently lowered taxes, not a one-time gimmick that disappears in one trip to the grocery store,” Senate Republican Leader Aric Nesbitt said earlier this month.
If the relief checks had made it into the final bill, it would have cost around $800 million, according to the Associated Press.
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Montana residents could also see tax rebates of as much as $1,250 and property tax rebates of up to $1,000, thanks to a group of legislative bills set to be signed by Gov. Greg Gianforte.
Five other states including Illinois, South Carolina, Maine, Idaho, and Connecticut are sending out additional relief checks in March to help combat inflation.
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