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Make pension income tax withholding optional (SB 584)

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Michigan

2026

Starting Jan. 1, 2026, pension and annuity payers would no longer have to withhold Michigan income tax. Withholding becomes optional. Retirees could keep more money each month but must plan to pay taxes at filing time or make estimated payments to avoid penalties. Payers would have less paperwork if they stop withholding, but must follow state rules if they continue. The bill also removes outdated withholding language.

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