Mich. Admin. Code R 206.10 — Compensation for se rvice in the armed forces of the United States;

treatment.

Rule 10. (1) Compensation paid from federal appropria tions, including
retirement benefits, for military services in the armed forces is exempt from Michigan
income tax, and is deductible from adjusted gr oss income by the recipient to the extent
it is included in federal adjusted gross income.
(a) Example 1. Active duty personnel
All military compensation is exempt.
(b) Exampe 2. Reservist

Figure for 206.10

The guardsman was federalized during the 2 weeks at camp and at the monthly
military drills. The pay for these came from federal appropriations.
The $250.00 paid for riot duty came from state funds and is subj ect to Michigan
income tax.
(d) Example 4. National guard technicians
National guard technicians, although paid from federa l funds, are full-time
civilian employees. Their civilian pa y is subject to Michigan income tax. They are
members of the national guard, howev er, and compensation paid for the 2 weeks'
encampment and the monthly drills is military pay and is exempt from Michigan
income tax as in example 3.
(e) Example 5. Armory board of control
Compensation for serving as a member of an armory board of control is subject to
Michigan income tax.
(f) Example 6. Retirement benefits
Retirement benefits paid to retirees of the armed forces for services performed
while a member of the armed forces are exempt from Michigan income tax.
(2) Employee business expenses attributable to military income shall reduce the
subtraction for military income. If the expens es exceed the military income, there can
be no subtraction for military income.