A recent letter from the Railroad Retirement Board (RRB) to the Treasurer of Michigan, pointed out that the Michigan Income Tax code, that would tax railroad retirement benefits, is prohibited under federal statute.
Michigan seeks to deny the deduction for individuals who are paid under the Railroad Retirement Act (RRA) effectively assessing a State tax on RRA annuities.
The RRA expressly prohibits the taxation of benefits. Railroad Retirement annuities remain exempt from Michigan income taxation.
Click here to read the letter from the RRB.