February 18, 2013
DETROIT (WWJ) – New changes in Michigan’s tax law mean many Michigan residents will be paying more taxes this year.
Jason Kassab, who owns four Liberty tax offices in metro Detroit, said everyone from low to middle earners are finding they owe more tax or getting less back.
“The returns I’ve done, I haven’t seen anyone get more they’ve gotten in years past,” he said.
He notes that households that earn over $50,000 no longer qualify for a homestead tax credit. While those that retired early will now be paying tax on a portion of their pension.
“I think the people that are going to be most affected are the people who are not of full retirement age, that make more than $50,000 – because they are going to be hit both ways. Their pension is probably going to have some portion of it taxed and they are not going to be able to get a homestead property tax credit that they are used to getting.”
“If you had a public contribution of $100 last year you’d get a $50 credit,” said Kassab. “This year there is no credit what-so-ever. The earned income tax credit – it’s not completely gone – it was reduced from 20 percent to six percent.”
“If you had a child who is over 18 but you were still claiming them on your return for whatever reason – they had no income, they are still a student – you would still get a $600 exemption for them – now that is gone,” he said. “So let’s say you had three kids that’s $1,800. If you were a college student, you got a tuition ease credit; this year you can not have that anymore.”