It's official: Spike in state revenues will trigger a tax cut for Michigan residents

LANSING ? Michigan residents will see a cut in the personal income tax rate next year, the state treasurer announced Wednesday.

But there is expected to be an ongoing debate in Lansing over whether the cut is temporary and for one year only, as the Whitmer administration and Attorney General Dana Nessel say it should be, or whether the tax cut should be permanent, as legislative Republicans insist was called for in a 2015 law.

Treasurer Rachael Eubanks said late Wednesday the income tax rate for the 2023 tax year will drop to 4.05% from 4.25% for one year only.

“Michigan’s strong economic position has led to a reduction in the state income tax from 4.25% to 4.05% for 2023,” Eubanks said in a news release. “When Michiganders file their 2023 state income taxes in 2024, they will see the rate adjustment in the form of less tax owed or a larger refund.”

More: AG Dana Nessel: State income tax rollback would last only 1 year

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House Republicans "will celebrate this milestone and continue fighting to make relief permanent as the law requires," said House Minority Leader Matt Hall, R-Richland Township.

The 2015 road funding law included a complex formula to trigger an income tax rate cut when general fund revenues exceeded a certain cap that factored in inflation. Based on numbers included in the state's Annual Comprehensive Financial Report published Wednesday, the cap was exceeded by just over $700 million.

A couple with taxable income of $50,000 would save $100 in state income tax when they file their returns for 2023, during 2024, based on the reduced rate.

Contact Paul Egan: 517-372-8660 or [email protected]. Follow him on Twitter @paulegan4.

This article originally appeared on Detroit Free Press: It's official: Spike in state revenues will trigger an income tax cut