Michigan State Representative Steve Carra of Three Rivers is among the lawmakers who voted to approve a plan to reduce taxes for working families and expand tax savings for seniors.

If the proposal goes all the way, the plan would provide an estimated $2.5 billion in annual tax relief by lowering Michigan’s individual income tax rate from 4.25% to 3.9%, reducing the burden on working and retired families across Michigan.

The plan would also allow parents to receive a child tax credit of up to $500 per dependent under the age of 19.

Also, seniors 62 years and older would be able to exempt $20,000 of all their income from the state income tax, or $40,000 for couples filing jointly.

Eligibility for this exemption currently begins at age 67. The plan would further enable seniors to deduct retirement income – such as pensions, 401(k) plans and individual retirement accounts – not already included in the first exemption. This additional deduction would also allow up to $20,000 for individual filers and $40,000 for joint filers.

The bill now advances to the Senate for consideration.