The Michigan House of Representatives recently passed a new bill that could bring relief to taxpayers. House Bill 4170 aims to lower the state income tax rate for individuals. Lawmakers say the bill supports working families in today’s economy. This latest move could have a significant impact across the state, especially as cost-of-living concerns continue to rise.
Michigan House approves tax cut bill
The Michigan House approved House Bill 4170. It lowers the individual income tax rate from 4.25 % to 4.05 %. The change took effect on January 1, 2025. Lawmakers passed the bill with a vote of 65 to 43. Two members abstained.
What the bill means for taxpayers
Supporters estimate that Michigan residents could save approximately $700 million annually if enacted. The bill also makes a temporary rollback permanent. That rollback happens when general fund revenues grow faster than inflation.
Voices from the Capitol
Rep. Kathy Schmaltz (R–Jackson) said the bill offers much-needed relief. She believes Michigan families are struggling with affordability. She sees the tax cut as a direct way to help.
Rep. Kelly Breen (D–Berrien County) said she supports the idea of a tax cut. However, she questioned how helpful the savings would be. She said the average taxpayer might save around $77 per year. She believes those dollars might do better if invested in public services.
Timeline and financial forecast
The legislature has already approved the bill. The next step is a review by the Senate. If the Senate approves it and Governor Whitmer signs it, the lower rate will appear in 2025 tax filings. The average filer will likely keep about $77 more per year. High-income earners could save even more.
The tax cut could bring short-term savings. However, it is just as important to understand how it fits into your overall financial picture.
Why a tax lawyer may be your best ally
Many people turn to CPAs for tax advice and guidance. However, a tax lawyer can offer legal insight that CPAs cannot. Tax attorneys can assist with disputes, interpret new laws and manage complex filings. They also understand how new rules—such as rate triggers or permanent tax rate reductions—impact different taxpayers. As Michigan moves forward with this tax change, a tax lawyer can help you stay compliant, avoid risk and take full advantage of the law.