Individual income tax: withholding requirements; mandatory withholding requirement by pension administrators; make optional. Amends sec. 703 of 1967 PA 281 (MCL 206.703).
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Overview
This bill modifies Michigan’s income tax withholding rules by making it optional for pension administrators to require tax withholding on pension and annuity payments. It also clarifies and expands withholding requirements for certain flow-through entities, including those with business activity exceeding $200,000, casino licensees, and race meeting licensees. The bill includes provisions for exemption certificates and addresses specific situations, such as those involving community college agreements and qualified charitable gift annuities.
Key provisions
- Pension administrators can no longer be required to withhold income tax on pension and annuity payments.
- Flow-through entities with business income exceeding $200,000 are required to withhold income tax on a portion of their income.
- Casino licensees and race meeting licensees must withhold income tax on winnings from nonresidents.
- The bill establishes a process for flow-through entities to claim exemptions from withholding based on member exemption certificates.
- It addresses withholding requirements for flow-through entities with members who are themselves flow-through entities.
- The bill includes provisions for revocation of exemption elections if requirements are not met.
- It clarifies that certain flow-through entities are not required to withhold under specific circumstances, such as voluntary compliance with the Michigan Business Tax Act.
- It outlines specific exceptions to withholding requirements related to housing assistance programs and rural housing service investments.
Bill text
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- Senate Introduced Bill
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