Types of Individual Income That Qualify for State Tax Exemption
As mentioned in Step 1 of previous page
Per the Michigan Tax Agreement, section § IV (A)(1), 3rd amendment, the following outlines the income that RTMs can be exempt from paying Michigan State income tax.
- Non Business Income
Resident Tribal Members are exempt from State income tax on all Non Business income including but not limited to:
a. All income derived from wages are exempt whether the wages are earned within the Agreement Area or outside of the Agreement Area;
b. All interest and passive dividends are exempt;
c. All rents and royalties derived from real property located within the Agreement Area are exempt;
d. All rents and royalties derived from tangible personal property, to the extent the personal property is utilized within the Agreement Area, are exempt;
e. Capital gains from the sale or exchange of real property located within the Agreement Area are exempt;
f. Capital gains from the sale or exchange of tangible personal property which is located within the Agreement Area at the time of sale are exempt;
g. Capital gains from the sale or exchange of intangible personal property are exempt;
h. All pension income and benefits including, but not limited to, 401(k), IRA, defined contribution plan, and defined benefit plan payments are exempt;
i. All per capita payments by the Tribe to Resident Tribal Members are exempt without regard to the source of payment; and
j. All gaming winnings are exempt.