Individual income tax: credit; credit for the installation of an accessory dwelling unit; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 282.

This bill proposes a tax credit for Michigan homeowners who build or contract to build an accessory dwelling unit, such as a detached structure or converted garage, on their property. Starting in the 2026 tax year, eligible taxpayers can claim a credit equal to 20% of the construction costs, provided they submit reasonable proof of expenses to the tax department. If the credit amount is larger than the taxpayer's current tax liability, the unused portion can be carried forward to future years rather than being refunded. The legislation defines an accessory dwelling unit as a secondary living space on the same property as the main home and sets the credit effective date for tax years beginning on or after January 1, 2026.