Michigan Gov. Gretchen Whitmer has signed a new state budget bill aimed at helping working families and seniors by eliminating taxes on tips, overtime pay, and Social Security income.

WILX reports that Whitmer joined lawmakers and local workers at a restaurant in Trenton, Michigan, to sign the measure, which she said would make it easier for residents to “make it” in the state by allowing them to keep more of their earnings.

The legislation removes state taxes on tips, a change that officials estimate will save workers an average of $200 per year. Eliminating taxes on overtime pay will save the average worker about $900 annually, according to Whitmer’s office. For retirees, the removal of taxes on Social Security income will provide an estimated $500 in annual savings for tens of thousands of Michigan residents.

State officials said the new law continues the Whitmer-Gilchrist administration’s efforts to improve financial security for working families and seniors. It builds on earlier steps that rolled back the state’s retirement tax, saving retirees roughly $1,000 per year, and expanded the Working Families Tax Credit, which provides eligible residents an average refund of $3,000.

In remarks during the signing event, Whitmer emphasized that these tax cuts are designed to “put money back in people’s pockets” while supporting long-term economic growth across the state.

“The bill is designed to help working families and seniors keep more of their hard-earned money,” Whitmer said.

State leaders praised the legislation as another step toward building a stronger middle class in Michigan. The new budget is expected to take effect at the start of the next fiscal year.