On Wednesday, I was at Mom’s Restaurant in Trenton to celebrate three new, bipartisan tax cuts that will lower costs for seniors and working





*October 10, 2025*



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Dear Friend,  

On Wednesday, I was at Mom’s Restaurant in Trenton to celebrate three new, bipartisan tax cuts that will lower costs for seniors and working families across Michigan.

The new state budget I signed on Tuesday eliminates state taxes on tips, overtime, and Social Security, so millions of Michiganders can keep more of their hard-earned paychecks.

Michiganders need real, immediate relief as they face high costs and economic uncertainty. By ending taxes on tips, overtime, and Social Security, we’re putting money back in the pockets of hundreds of thousands of Michiganders, so they can pay the bills and put food on the table. This budget also lowers costs by continuing to roll back the retirement tax and deliver the Working Families Tax Credit.

These tax cuts will be a game-changer for Michigan families:


* No taxes on tips will save up to *300,000* Michiganders an average of *$400/year* on their state taxes. When combined with no federal tax on tips, that’s a savings of *$1,500/year*.
* No taxes on overtime will save up to *500,000* workers an average of *$500/year* on their state taxes. When combined with no federal tax on overtime, that’s *$2,000/year*.
* No taxes on Social Security will save up to *40,000* eligible seniors *$500/year* on their state taxes. 
* The Working Families Tax Credit will continue to deliver an average combined tax refund of *$3,800+/year* back in the pockets of *650,000* Michigan families.
* Rolling back the Retirement Tax will continue to save *500,000* seniors *$1,000/year.*

Together, we're making life more affordable for the workers who keep our state moving forward and for the seniors who deserve to enjoy their golden years.

I’m so proud that our bipartisan budget will lower costs for millions of Michiganders. We got it done by working together because that’s what Michigan is all about. 

Sincerely,

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Gretchen Whitmer

Governor 

Lowering Costs, Cutting Taxes

The new budget I signed on Tuesday establishes new state tax cuts that align with federal tax changes for tax years 2026 through 2028. Together, this will provide hundreds of millions of dollars in tax savings each year, helping workers and retirees keep more of what they earn.

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No Taxes on Tips

No taxes on tips will directly benefit up to 300,000 Michiganders who earn their living through tips, saving them an average of $400 a year on their state taxes. When combined with no federal taxes on tips, tipped workers in Michigan could save an average of $1,500 a year. Michigan’s servers, bartenders, and delivery drivers deserve to keep the tips they earn from their hard work. Thanks to this bipartisan budget, tips will no longer be taxed at the state level in Michigan.

I also want to note that earlier this year, we secured a bipartisan deal to raise the minimum wage to $15 an hour by 2027 and increase the tipped minimum wage by the largest amount ever. As costs go up, we’re doing everything we can to keep more money in people’s pockets.

No Taxes on Overtime

No taxes on overtime pay will benefit up to 500,000 Michiganders who put in extra hours in industries like construction, manufacturing, health care, and public safety. This tax cut will benefit eligible workers, saving them an average of $500 a year on state taxes alone. When combined with no federal taxes on tips, overtime workers in Michigan could save an average of $2,000 a year. Michiganders who do important work like fixing the damn roads, building houses, assembling cars, caring for patients, patrolling our streets, and feeding customers deserve to keep more of their hard-earned money, especially when they work overtime. Together, we got it done.

I’ll also point out that our budget’s huge investment to fix roads will create a lot of construction jobs across Michigan. By cutting taxes on overtime, we’ll reward crews who are working hard to make roads safer and smoother.

No Taxes on Social Security

No taxes on Social Security will help retirees who still pay taxes on their benefits, expanding exemptions so more seniors can keep what they’ve earned. This tax cut will directly benefit up to 40,000 people a year, saving them an average of $500 annually on state taxes. 

That’s a game-changer for seniors who live on a fixed income and are finding it harder to get by as inflation and higher prices squeeze their pockets. I’m proud we’re helping them in this budget.

Working Families Tax Credit

The new budget builds on our ongoing work to lower costs for Michiganders by continuing the Working Families Tax Credit, also known as the Earned Income Tax Credit, which will continue delivering an average refund of more than $3,800 to 650,000 families. That’s a lot of money back in people’s pockets.

Retirement Tax

With the new budget, we’re going to keep rolling back the retirement tax, putting an average $1,000 back in the pockets of half a million senior households when fully phased in.








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