Individual income tax: credit; credit for certain qualified dependents; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 281.

SB 118 creates a tax credit for Michigan taxpayers with qualifying dependents. It allows a credit equal to the state's "target foundation allowance" (from school funding law) for each dependent aged 5-18 who isn't enrolled in public school and has demonstrated grade-level reading/math proficiency through state or private tests. The credit reduces tax liability, and any excess amount is refunded to the taxpayer. This directly affects families with children meeting these specific educational and enrollment criteria.