HB 5775 amends Michigan's individual income tax law to create a new tax exemption for post-graduation scholarship grants. This change directly affects individuals who receive these specific scholarship awards, allowing them to exclude that income from their state taxable income. The bill modifies Section 30 of the Income Tax Act by adding a new provision that treats post-graduation scholarship grants similarly to other educational benefits currently exempt from taxation. By removing these grants from taxable income, the legislation reduces the amount of state tax residents must pay on this specific source of funding.
HB 5853 requires cities in Michigan that impose an income tax to allow residents and businesses in designated Renaissance or HOPE zones to claim a tax deduction. The bill mandates that city income tax ordinances be updated to let qualified taxpayers subtract specific amounts of income earned within these zones, including wages, capital gains, and lottery winnings. This change directly affects individuals and businesses operating in areas officially recognized for economic revitalization, providing them with a financial incentive tied to their location. By amending state law, the bill ensures that local tax rules align with existing state-level incentives for these designated zones.
This bill extends the Michigan First-Time Home Buyer Savings Program through December 31, 2026, by amending the existing law that established the program. It allows individuals to open special savings accounts designated for paying qualified costs related to purchasing a single-family home in Michigan. The program permits contributions from people other than the account holder and allows joint ownership if the account holders file a joint tax return. The bill includes a provision stating that it will not take effect unless a related bill, HB 5973, is also passed into law.
This bill expands the Michigan Education Savings Program to allow withdrawals from education savings accounts for qualified postsecondary credentialing expenses, such as those for professional certifications or licenses. The change directly affects account owners and designated beneficiaries who wish to use their savings for these specific costs in addition to traditional tuition and fees. By updating the state's definition of qualified higher education expenses to align with federal rules, the legislation enables families to access their savings for a broader range of career training without incurring penalties. The bill amends existing state law to incorporate these new expense categories into the program's guidelines.
This bill creates a new tax credit for Michigan residents with qualified dependents starting in the 2026 tax year. The credit equals 50% of the state school aid target foundation allowance for each dependent who is between 5 and 18 years old, not enrolled in public school, and has demonstrated proficiency in reading and math. If the credit amount is larger than the taxpayer's tax liability, the excess will be refunded to the taxpayer. The Department of Treasury may require proof that a dependent meets the eligibility requirements.
This bill creates a new corporate income tax credit for Michigan employers who train apprentices and employ students in career and technical education programs. Starting in 2026, eligible businesses can receive tax credits covering up to 50% of certain training expenses or $2,000 per apprentice or student, with small businesses under 50 employees receiving an additional 10% bonus credit. The credit applies to qualified expenses such as wages, benefits, and classroom instruction costs, and any unused portion can be refunded to the taxpayer. Additionally, the bill requires the state Department of Labor to annually report on program participation, employment outcomes, and the fiscal impact of the credits to legislative committees.
HB 5517 creates a $0.005 per returnable beverage container tax credit for distributors who charge a deposit on containers, effective for tax years beginning January 1, 2026. The credit adjusts annually based on the U.S. Consumer Price Index starting in 2027. Distributors must attach a specific report (per 1976 IL 1) with their tax return to claim the credit, and any excess credit is refunded. This directly affects beverage distributors handling returnable containers in Michigan.
SB 790 redirects a portion of corporate income tax revenue to fund Michigan Space Grant Consortium (MSGC) programs. Beginning in the 2025-2026 fiscal year, the bill requires $250,000 (or the amount needed to fully fund NASA-related student grants, fellowships, and internships) annually to be allocated to support MSGC. This directly benefits Michigan residents pursuing undergraduate or graduate opportunities in space-related fields through NASA programs. The funds are transferred to the Michigan Economic Development Corporation for MSGC to administer, ensuring state support for student participation in federal space initiatives.
HB 5519 lowers Michigan's individual income tax rate to 3.9% for tax years beginning January 1, 2026, replacing the current 4.25% rate. This change applies to all Michigan residents who pay state income tax on their earnings. The bill amends Section 51 of the Income Tax Act to implement this rate reduction, which follows a temporary 4.25% rate period through 2025. This policy directly reduces the tax burden for individual taxpayers starting in 2026.
HB 5484 updates Michigan's tax rules for businesses operating across state lines, specifically clarifying how income from flow-through entities (like S-corps and partnerships) is allocated to Michigan for tax purposes. It revises sections of the Income Tax Act to better define when income earned outside Michigan must still be taxed by Michigan, particularly for nonresident business owners. Key changes include refining rules for sourcing income from services performed in Michigan, business activities conducted within the state, and capital gains on property. This directly affects business owners with multi-state operations who must now follow updated guidelines to determine Michigan's tax share.
