Form Mi W-4p - Withholding Certificate For Michigan Pension Or Annuity Payments Page 2
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2Form 4924, Page 2
Instructions for Completing MI W-4P,
Withholding Certificate for Michigan Pension or Annuity Payments
General Instructions
tax withheld, but the company is not required to do so. If no taxes
are withheld from your payments, it is likely you will be required
Significant income tax changes took effect in 2012 and going
to make estimated payments in place of the withholding. Contact
forward. As a result, your pension payment may be subject to
your pension and/or annuity administrator to verify whether tax
tax and an underpayment may result if the incorrect amount of
will be withheld from your payments.
tax is withheld. These changes may result in a balance due if the
Line-by-Line Instructions
incorrect amount is withheld from pension or annuity payment(s).
Caution: Some benefits do not meet the definition of “pension
Line 1: You may opt out of withholding tax from your
and retirement benefits” under Michigan’s individual income
retirement benefits if you believe you will not have a balance
tax laws and are not eligible for subtraction on your Michigan
due on your MI-1040. If you (and your spouse) opt to have no
income tax return. Visit for additional
Michigan tax withheld from your retirement benefits by checking
information. For these instructions the words “retirement
the box on line 1, it may result in a balance due on your MI-1040
benefits” mean pensions, annuities, and other retirement benefits.
as well as penalty and/or interest.
Taxpayers born before 1946 may deduct all retirement benefits
Line 2: If you (or your spouse) were born prior to 1946, all
paid from public employment and retirement benefits from
benefits from public sources are exempt and benefits from
private plans up to $48,302 on a single return or $96,605 on a
private sources may be subtracted up to $48,302 for a single filer
joint return. Recipients born during the period 1947 through
or married filer filing separately or $96,605 if married filing a
1952 are eligible to deduct retirement benefits up to $20,000 for
joint return for the 2013 tax year. In addition, benefits that will
single or married filing separate taxpayers, or $40,000 if married
be rolled into another qualified plan or IRA will not be taxable
filing a joint return. For joint filers, the age of the oldest spouse
if the amount rolled over is not included in federal adjusted gross
determines the age category.
income (AGI). Any private retirement benefits in excess of the
For tax year 2013, single recipients born in 1946 or recipients
limits above are taxable.
filing a joint return where the older spouse was born in 1946 are
Line 3: If you, or your spouse if your spouse is older than
eligible to deduct $20,000 (or $40,000 if filing a joint return)
you, were born in 1946 you may deduct the Michigan standard
against all income, not just retirement benefits. Recipients born
deduction equal to $20,000 ($40,000 on a joint return) from your
in 1946 may continue to use the MI W-4P so that they have the
taxable income instead of retirement benefits. If you (or your
appropriate amount withheld from their income.
spouse if older) were born during the period 1947 through 1952,
Recipients born after 1952 may not deduct retirement benefits on
the first $20,000 for single filers or $40,000 for joint filers of all
the Michigan Income Tax Return (MI-1040).
private and public pension and annuity benefits may be subtracted
from Michigan taxable income. Benefits in excess of these limits
Multiple pensions: If you (and your spouse) receive multiple
are taxable.
pension payments, your withholding on those payments may not
cover your entire tax liability. Married couples where each spouse
Line 4: If you were born during the period 1947 through 1952
receives retirement benefits may choose to have withholding
and received retirement benefits from employment with a
calculated as if each was single on the MI W-4P and select one
governmental agency that was exempt from the Social Security
personal exemption in order to have sufficient withholding to
Act, the first $35,000 for single filers or $55,000 for joint filers of
cover the tax liability. Taxpayers with multiple pensions may
all retirement benefits may be subtracted from Michigan taxable
need to make quarterly estimated payments (MI-1040ES) or
income. The Michigan standard deduction for those born in 1946
consult a tax advisor to ensure the proper amount is withheld or
is also increased by $15,000 if you received retirement benefits
paid through estimated payments.
from employment with a governmental entity that was exempt
from the Social Security Act.
Estimated Payments: There are penalties for not paying enough
state income tax during the year, either through withholding or
Line 5: If you (and your spouse) were born after 1952, all private
estimated tax payments. Taxpayers who choose not to have tax
and public retirement benefits are fully taxable and may not be
withheld from their retirement benefits may be required to make
subtracted from Michigan taxable income.
estimated tax payments. Refer to Form MI-1040ES for estimated
Line 6:
Enter personal exemptions you are claiming for
tax requirements.
withholding. Do not claim more than your allowable personal
When should I complete this form? Complete Form MI W-4P
exemptions on all MI W-4s (wages) or MI W-4P forms combined.
and give it to the administrator of your retirement benefits as
Line 7: You may designate additional withholding if you expect
soon as possible.
to owe more than the amount withheld. The amount on line 7
Your tax situation may change from year to year; you may want
must be a percentage. Check with your pension administrator to
to evaluate your withholding each year. You can change the
see if they permit additional withholding.
amount to be withheld by submitting an updated Form MI W-4P
Line 8: If allowed by your pension administrator, you may enter
to your pension administrator at any time.
an additional dollar amount to be withheld from each payment.
Is every pension administrator required to withhold
Failure to have sufficient tax withheld from your
Michigan tax? Only companies over which Michigan has taxing
retirement benefits may result in a balance due on
jurisdiction are required to withhold Michigan tax from your
your MI-1040 as well as penalty and/or interest.
retirement benefits. If your pension administrator does not fall
under Michigan jurisdiction, you may request to have Michigan
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