Michigan Outlines Tax Benefits Available to Military Members and Veterans
The Michigan Department of Treasury reminds current and former military members of various individual income tax and property tax benefits they may be entitled to receive from the state. (News release, Mich. Dept. Treas., 05/20/2021.)
Benefits available. Current and former military members may be eligible to receive the following benefits:
Military pay tax exemption. Military pay is exempt from Michigan tax, including military retirement benefits and exit and separation pay.
Children of veterans tuition grant. This program provides undergraduate tuition assistance to the children of Michigan veterans who were totally and permanently disabled, missing in action or died while serving. Students may receive scholarship assistance for up to four academic years for a total of up to $11,200.
Disabled veterans property tax exemption. A property tax exemption for real property used and owned as a homestead as outlined in state law.
Principal residence exemption (PRE) for active duty military personnel. Property owners can retain a PRE while on active duty if their property is rented or leased.
Property tax relief during active military service. Property owned by a serviceperson cannot be sold to pay delinquent property taxes during a tour of active duty.
Summer property tax deferment. A serviceperson, veteran or widow or widower whose income outside of military compensation is no more than $7,500 per year may be eligible for a summer property tax deferment.
Federal Military Spouses Residency Relief Act. The spouse of an individual in the military may not be subject to the state’s taxation if they are a nonresident of the state, the service member is present in the state due to military orders, the spouse is solely in the state to accompany the service member, and the spouse maintains a domicile in another state. This act was amended in December 2018 to alternately allow military spouses to elect the same state of domicile as their service member spouse, even if they are not present in that state.