• Booklets have been mailed to individuals - Requests for booklets will be taken beginning in early February.
• Tax Rate - The income tax rate for 2008 is 4.35%.
• Personal Exemption Allowances - The personal exemption allowance increased to $3,500 for 2008. The special exemption allowance remained at $2,200.
• New Exemption for Qualified Disabled Veterans - Taxpayers who either have a service-connected disability or have a dependent with a service- connected disability may be eligible to claim a $250 exemption for tax year 2008. See the instructions for line 9e on page 10. An additional exemption may also be claimed on the MI-1040CR-7 Home Heating Credit. See the instructions for line 11c on page 6 of the MI-1040CR-7 booklet regarding eligibility.
• Pension and Interest Deduction - For tax year 2008, pension benefits included in adjusted gross income (AGI) from a private pension system or an IRA are deductible to a maximum of $43,440 for a single filer, or $86,880 for joint filers. Senior citizens age 65 or older may be able to deduct part of their interest, dividends and capital gains that are included in AGI. For 2008, the deduction is limited to a maximum of $9,690 for single filers and $19,380 for joint filers. More Information for Seniors and Retirees
• New Voluntary Contributions Schedule - Taxpayers can contribute $5, $10, or more to any of the five funds listed on Form 4642, Voluntary Contributions Schedule. They are;

  • Amanda's Fund for Breast Cancer Prevention and Treatment - Contributions to Amanda's Fund for Breast Cancer Prevention and Treatment will be an additional source of funding to provide breast cancer screening, follow-up care and treatment to an expanded number of low income women served through the Michigan Breast and Cervical Cancer Control Program. Your contribution will increase your tax due or reduce your refund. See page 11 of the MI-1040 booklet.
    Tax Contributions to Fight Cancer
  • Animal Welfare Fund - Contributions will go to Michigan animal shelters and non-profit organizations in the form of grants to help finance the spaying and neutering of homeless pets, promote the importance of spaying and neutering animals to the community, educate the public on the proper care of animals, and finance the costs of caring for and protecting animals involved in neglect or cruelty cases. Your contribution will increase your tax due or reduce your refund. See page11 of the MI-1040 booklet.
  • Michigan Housing and Community Development Fund - Contributions to the Housing and Community Development Fund will help transform Michigan's economy by improving the quality of life in Michigan's cities and communities through affordable housing and economic development. Your contribution will increase your tax due or reduce your refund. See page 11 of the MI-1040 booklet.
  • Prostate Cancer Research Fund - Contributions to the Prostate Cancer Research Fund will be used to fund prostate cancer research in Michigan. Your contribution will increase your tax due or reduce your refund. See page 11 of the MI-1040 booklet.
    Tax Contributions to Fight Cancer

  Michigan Law Enforcement Officers Memorial Monument Fund - Contributions to this fund will be used to construct a memorial to recognize police officers who have been killed in the line of duty. Your contribution will increase your tax due or reduce your refund. See page 11 of the MI-1040 booklet.

• Earned Income Tax Credit - For tax year 2008, you may claim a Michigan earned income tax credit equal to 10 percent of the federal earned income tax credit for which you are eligible, if any. If you are not eligible for a federal credit, you are not eligible for a Michigan credit.

Important Information

• Easy to Use Direct Deposit - Your refund is deposited safely into your account at the financial institution of your choice and is immediately available. Be sure to choose Direct Deposit when filing your 2008 tax return and credits.
• Property Tax Credits / Refunds - Michigan homestead property tax credit and Principal Residence Exemption refund received in 2008 may be taxable on your 2008 U.S. 1040. If you claimed an itemized deduction for property taxes on your 2007 U.S. 1040 and then received a refund in 2008 from the State or your local unit of government for a portion of those taxes, you must include that refund as income on your 2008 U.S. 1040. If you have questions about the taxability (for federal tax purposes) of the refunds, call the IRS at 1-800-829-1040.
• Filing Extension Granted for Military Personnel Serving in a Combat Zone - United States military personnel serving in a combat zone on April 15, 2009, will be given 180 days after leaving the combat zone to file their federal and state tax returns and will be exempt from penalties and interest. Service men and women serving in combat zones will simply need to print "Combat Zone" in ink on the top of page 1 of their return. When e-filing simply enter the words "Combat Zone" in the preparer notes. More Information for Members of the Military
• Pension Interest/Dividends/Capital Gain Estimator - Certain amounts of pension interest/dividends/capital gains and pension distributions are subtractable from taxable income. A new estimator was developed and placed on Treasury's Web site to assist taxpayers in determining what amounts can be subtracted and to make return preparation easier. To access the estimator, go to www.michigan.gov/taxes and select Pension Estimator from the Quick List, Services drop down feature.
• MI1040ES Forms not Mailed to Taxpayers Using Preparers - Effective January 2009, Treasury will not mail preprinted estimate forms to taxpayers who used tax preparers to complete and file their 2007 tax returns.
• Postage Changes - Effective May 2007, the Post Office calculates postage based on the weight, size and thickness of an envelope. Mail with insufficient postage will be returned to the sender by the U.S. Postal Service. Consult with your Post Office before sending mail to avoid delays in delivery.
• Renaissance Zones - Certain Renaissance Zones, along with the tax benefits, will continue to be phased out. See instructions for Schedule 1, line 15, on page 14 of the MI-1040 tax booklet.
• Prior Year Returns and Credits - For refunds, you have until April 15, 2009 to file or amend your 2004 Michigan Individual Income Tax Return (MI-1040) and Homestead Property Tax Credit forms (MI-1040CR and MI-1040CR2). The State of Michigan statute of limitations is 4 years for claiming tax refunds and homestead property tax credits.
• Free E-file Is Available. Do You Qualify? - E-file lets you submit your Michigan and federal individual income tax returns using a computer instead of mailing paper returns. You can even e-file your Michigan return separately from your federal return (State-Only e-file). If you choose to e-file only your Michigan tax return, be sure to calculate your federal return first before completing and e-filing your Michigan return. www.MIfastfile.org
• Home Heating Credit Standard Allowances and Income Ceilings for 2008 (See Tables A and B below) Note: The last day to file a 2008 Home Heating Credit is September 30, 2009.
  For more information visit www.michigan.gov/heatingassistance.

TABLE A
Standard Allowance for the Standard Credit Computation

TABLE B
Exemptions and Maximum Income for the Alternate Credit Computation