Sec. 720. (1) Except as otherwise provided in this section, distributions under Tier 1 or Tier 2 from employer contributions and earnings on those employer contributions, and distributions under Tier 1 or Tier 2 from employee contributions and earnings on those employee contributions, are exempt from any state, county, municipal, or other local tax. (2) Beginning January 1, 2012, distributions under Tier 1 or Tier 2 from employer contributions and earnings on those employer contributions, and distributions under Tier 1 or Tier 2 from employee contributions and earnings on those employee contributions, are subject to state tax. (3) The state treasurer has the right of setoff to recover overpayments made under this act and to satisfy any claims arising from embezzlement or fraud committed by a qualified participant, former qualified participant, refund beneficiary, or other person who has a claim to a distribution or any other benefit from Tier 2. (4) The state treasurer shall correct errors in the records and actions in Tier 2 under this act, and shall seek to recover overpayments and shall make up underpayments.
Mich. Comp. Laws § 38.2670
Distributions; exemption from tax; subject to taxation beginning January 1, 2012; right of setoff to recover overpayments; satisfaction of claims arising from embezzlement or fraud; correction of errors
Applied in 1 court decision — leading case In Re Request for Advisory Opinion Regarding Constitutionality of 2011 PA 38 (2011)
Most recently applied in In Re Request for Advisory Opinion Regarding Constitutionality of 2011 PA 38 (November 2011)
Add. 1996, Act 523, Eff
Official source: Michigan Legislature. Reproduced from public-domain Michigan statutes; confirm against the official source for the current text. Not legal advice.