Governor Whitmer has proposed a tax increase on some businesses to pay for the potential repeal of the so-called pension tax created under a 2011 tax code overhaul led by Governor Snyder. Here’s how the proposed tax increase may affect your business:
Currently, income for S-Corps, partnerships and LLC’s flows through to the owners/shareholders and is subject to Michigan’s 4.25% income tax. Governor Whitmer is proposing a 6% tax on that income, with a tax credit of 4.25% for business owners, resulting in a net tax increase of 1.75%. This increase is expected to offset losses from the expected pension tax repeal. For more information on this proposed tax increase, read the Detroit News article here. Please contact our office to discuss how this proposed increase might impact your business.