Individual Plans

For an IRA to meet Michigan retirement/pension subtraction qualifications, one of the following must be true:

• you are 59½ or older, or
• you are on disability, or
• the participant died, or
• a series of equal periodic payments are made for life under IRC 72(t)(2)(A)(iv).

Distributions after the death of the participant may only be subtracted by a surviving spouse if the distributions qualified as a subtraction for the participant at the time of death

Distributions from a Roth IRA are not included in AGI and are not subtractable on the Michigan return.

Any distributions attributable to the following type of employee contributions will not qualify for the pension subtraction:

• If all the contributions are made by the employee, or
• the employee makes contributions exceeding the amount mandated by the plan to elicit employer contributions.

All of the following distribution requirements must be true for a possible Michigan retirement and pension subtraction under this plan type: 

• you are receiving distributions from a retirement annuity policy for life
• you are a senior citizen.

For purposes of the retirement annuity subtraction, a senior citizen is defined in MCL 206.514(1) as an “individual . . . who is 65 years of age or older at the close of the tax year. The term also includes the un-remarried surviving spouse of a person who was 65 years of age or older at the time of death.

These plans are for the self-employed. Distributions are subject to the same general rules for other retirement plans:

• distributions are usually not made until a participant separates from service, or
• the plan is discontinued, or
• the participant reaches age 59½.