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Are military exit benefits and military separation pay exempt from Michigan income tax?

April 26, 2017Benefits exempt Michigan Military pay Separation

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Are military exit benefits and military separation pay exempt from Michigan income tax?

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Compensation paid from federal appropriations, including retirement benefits, for military services in the armed forces of the United States is exempt from Michigan income tax. Exit benefits and separation pay that are classified as military compensation may be deducted to the extent they are included in federal adjusted gross income.