• Booklets have been mailed to individuals - Forms and instructions are currently available on the Web. Requests for booklets will be taken beginning in early February.
• Tax Rate Increase - Effective October 1, 2007, the Michigan income tax rate increased from 3.9% to 4.35%. The tax rate for 2007 is annualized by law. The tax rate for the 2007 tax return is 4.01%.
• Personal Exemption Allowances - The personal exemption allowance increased to $3,400 for 2007. The special exemption allowance increased to $2,200.
• Pension and Interest Deduction - For tax year 2007, pension benefits included in adjusted gross income (AGI) from a private pension system or an IRA are deductible to a maximum of $42,240 for a single filer, or $84,480 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 2007, the deduction is limited to a maximum of $9,420 for single filers and $18,840 for joint filers. However, the maximum must be reduced by the pension subtraction. More Information for Seniors and Retirees
• Nonrefundable Credits - Beginning with tax year 2007, nonrefundable credits were moved from page 2 of Form MI-1040 to a new Schedule 2 (on the back of Schedule 1).
• New Venture Capital Investment Deduction - A new deduction is available for capital gains from Michigan venture capital investments that were reinvested in a new Michigan venture capital investment. See instructions on Form 4534.
• 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 2007 tax return and credits.
• Property Tax Credits / Refunds - A reminder from the Internal Revenue Service (IRS) - Michigan homestead property tax credit and Principal Residence Exemption refund received in 2007 may be taxable on your 2007 U.S. 1040. If you claimed an itemized deduction for property taxes on your 2006 U.S. 1040 and then received a refund in 2007 from the State or your local unit of government for a portion of those taxes, you must include that refund as income on your 2007 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, 2008, 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 area of the software. More Information for Members of the Military
• Stillbirth Credit - If you are the mother of a stillborn delivered in 2007 and were issued a Certificate of Stillbirth from the Michigan Department of Community Health, you may claim a refundable credit equal to 4.5% of the exemption amount for the tax year ($160 for 2007). This Certificate must be obtained from the Department of Community Health and attached to your MI-1040 return to qualify. You may not e-file your tax return if you claim this credit.
Renaissance Zones - Certain Renaissance Zones, along with the tax benefits, will continue to be phased out. See instructions in the MI-1040 tax booklet for Schedule 1, line 15, on page 14.
• Prior Year Returns and Credits - For refunds, you have until April 15, 2008 to file or amend your 2003 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.
• 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 2007 (See Tables A and B below) Note: The last day to file a Home Heating Credit is September 30, 2008.
  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