Social Security taxation in Michigan - conflicting info from SSA agent about state tax withholding

The SSA agent was likely referring to FEDERAL taxes, not Michigan state taxes. Michigan does NOT tax Social Security benefits - you're right about that. However, depending on your total income, the federal government may tax up to 85% of your SS benefits. With your combined income of $52,000, you'll likely pay some federal tax on your SS benefits. The 12% withholding is for federal taxes only. You can adjust this on form W-4V if you think it's too high. I'm also in Michigan and have federal taxes withheld from my SS (I chose 10%), but nothing is withheld for Michigan state taxes because they don't tax SS benefits.

michigan doesnt tax ss benefits but feds do. agent was right about needing withholding but wrong if they said it was state tax. i have 10% taken out for federal and its about right for me

I'm a retired tax preparer in Michigan. Here's the deal: 1. Michigan does NOT tax Social Security benefits. This has been true for years. 2. Federal taxation of SS benefits depends on your "combined income" (AGI + nontaxable interest + 1/2 of SS benefits): - Below $25,000 (single) or $32,000 (married): No tax on benefits - Between $25K-$34K (single) or $32K-$44K (married): Up to 50% taxable - Above $34,000 (single) or $44,000 (married): Up to 85% taxable 3. With $52,000 total income, you'll likely have 85% of your benefits subject to federal tax. 4. 12% withholding is reasonable for federal taxes at your income level. The agent incorrectly stated Michigan taxes SS (they don't), but was correct that you should have federal withholding.

My sister had the EXACT same issue!!! The SSA told her Michigan taxes SS and she argued with them for 20 minutes! They need to train their people better. Michigan has NEVER taxed Social Security (at least not in the last 15 years I've lived here). But yeah, the federal government will definitely take their cut. I have 15% withheld because I have other income and hate owing at tax time.

I had a terrible time reaching someone at SSA to fix my withholding preferences. Kept getting disconnected or waiting 2+ hours. Finally used a service called Claimyr (claimyr.com) that got me connected to an agent in under 15 minutes. They have a video showing how it works: https://youtu.be/Z-BRbJw3puU The agent I spoke with confirmed Michigan doesn't tax Social Security. For federal, I'm having 10% withheld which should cover it based on my income.

You should check out the Michigan Department of Treasury website or call them directly. That will give you the definitive answer straight from the source. But everyone here is correct - Michigan does NOT tax Social Security benefits. I retired in 2024 and specifically researched this. Michigan is actually quite tax-friendly for retirees compared to many states. They also have a pension deduction based on your birth year and filing status. As for federal taxes, with your income level, having some withholding is smart. The 12% should cover you without giving the government too much of an interest-free loan.

Has anyone tried adjusting their withholding after starting benefits? I initially had 7% withheld but want to increase it. Is it a big hassle to change it?

One thing to keep in mind: even though Michigan doesn't tax Social Security benefits, your total income will affect whether your pension is taxable in Michigan. The rules depend on your birth year and filing status. For someone born after 1952, there's a limited pension/retirement income deduction once you reach age 67. For 2025, the deduction is around $22,000 for single filers and $45,000 for married filing jointly (these numbers get adjusted). So while your SS isn't taxed by Michigan, it might affect the taxation of your other retirement income. This might be why there was confusion.

I'm new to this community and dealing with a similar situation in Michigan. Just want to confirm what everyone else is saying - Michigan absolutely does NOT tax Social Security benefits. I called the Michigan Department of Treasury directly last month when I was getting conflicting information, and they confirmed this on the phone. The SSA agents sometimes get state tax rules mixed up, which is frustrating when you're trying to make important financial decisions. I ended up having 10% withheld for federal taxes, which seems to be working well for my situation. For anyone else dealing with this confusion, I'd recommend calling your state's tax department directly rather than relying on federal SSA agents for state-specific tax advice. They're great with federal rules but not always up to date on all 50 states' different tax policies.

This is such a common issue! I'm a new retiree in Michigan and went through this exact same confusion last year. The SSA agent I spoke with also incorrectly told me Michigan taxes Social Security benefits, which had me panicking about my withholding choices. After doing my own research and speaking with a tax professional, I can confirm what everyone else is saying - Michigan absolutely does NOT tax Social Security benefits. The confusion likely stems from the fact that SSA agents deal with federal tax issues daily but aren't necessarily experts on all 50 states' tax laws. I ended up having 11% withheld for federal taxes, which worked out perfectly for my situation. One tip: if you're unsure about the right withholding percentage, you can always start with a higher amount and adjust it down later using Form W-4V rather than risk owing money at tax time. Thanks to everyone who shared their experiences - it's so helpful to have this kind of real-world confirmation when dealing with retirement planning!

I'm a newcomer to this community and dealing with almost the identical situation! I just had my SSA appointment last week and the agent told me the same thing about Michigan taxing Social Security - I walked out of there so confused because everything I'd read online said otherwise. Reading through all these responses has been incredibly helpful and reassuring. It's clear that the SSA agent was mixing up federal and state tax rules, which seems to be a widespread training issue based on everyone's experiences here. I'm 65 and will have similar retirement income to yours - about $48,000 combined between SS and my pension. Based on what everyone has shared, I think I'll go with 11% federal withholding to start and can always adjust it later with Form W-4V if needed. Thanks to everyone who took the time to share their experiences and clarify the Michigan tax situation. This is exactly the kind of practical, real-world advice that's so hard to find elsewhere!