700,000 Michigan households will get refund checks early next year, Whitmer says

Lansing — Gov. Gretchen Whitmer said Thursday her administration will send checks averaging $550 directly to about 700,000 households that qualify for the Earned Income Tax Credit in Michigan early next year.

A wide-ranging overhaul of Michigan's tax policies that Whitmer, a Democrat, approved in March required the checks. The new law decreased taxes on retirement income and boosted the EITC, which benefits low- and moderate-wage workers, from 6% of the federal EITC to 30% of the federal credit, dropping state revenues by about an estimated $385 million a year.

The Internal Revenue Service says the current basic qualifications for the EITC include having worked, having earned income under $63,398 annually and having investment income below $11,000.

The change in the EITC was slated to begin for the 2022 tax year. But because the broader tax overhaul didn't get enough votes to take effect early, Michigan residents can't claim the expanded credit on their annual tax filings until next year.

Beginning Feb. 13 — the day the law takes effect — the Whitmer administration will mail checks to those who qualified for the EITC as part of their 2022 tax return. The checks will be the difference between the 6% tax credit they received on their tax return and the 30% that is owed under the new law, according to the governor's office.

“This directly benefits half the children in Michigan, and moms and dads can use this extra money at tax time to pay the bills, put food on the table and buy school supplies," Whitmer said Thursday in a statement.

The new law required the refunds to go out "as soon as practical."

Michigan residents who qualify for the EITC should expect to receive $550 on average, based on data from past tax returns, according to the governor's office.

House Speaker Joe Tate, D-Detroit, said Michigan lawmakers had taken action to ensure working-class individuals and families get the money that is owed to them.

"Whether they use it to pay off holiday bills, make a necessary purchase or take a well-deserved vacation, this is just the latest example of putting the people of Michigan first and improving their quality of life," Tate said.

Eligible Michigan residents don't need to submit any additional paperwork to receive the check, the governor's office said Thursday. But if a taxpayer moved recently and has concerns about the accuracy of the address on file with the state, the individual can manually update it with the Michigan Department of Treasury.

The state Department of Treasury will automatically process refund checks for those who submitted their 2022 tax return and confirmed eligibility for the additional state credit. Checks will be mailed on a rolling basis as soon as they are printed, according to the governor's office.

It is estimated it will take between five to six weeks to print and distribute all of the payments.  

Eligible Michigan residents should still apply for the expanded tax credit if they meet the criteria this year, according to Whitmer's office. It's possible for Michiganians to receive both the additional EITC check from their 2022 tax return and receive the full 30% tax credit on their 2023 tax filing when they file next year, the governor's office said.

Republicans, who had pushed for a broader income tax cut, had been critical of the tax plan approved by Democrats earlier this year, saying it didn't go far enough.

cmauger@detroitnews.com