Michigan House Bill HB5045

Michigan 2023-2024 Regular Session

• Introduced: 9/26/23
• Refer: 9/26/23

Caption

Individual income tax: credit; student loan credit for certain graduates of this state; create. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 277.

Impact

If enacted, this bill will provide financial relief to qualified taxpayers, making it easier for them to manage their student loan debt while also encouraging them to contribute to Michigan's economy by working within the state. The credit is designed to be claimed within the first ten years after graduation, indirectly promoting higher education enrollment in Michigan's institutions as students may be more inclined to stay or return to their home state for job opportunities.

Summary

House Bill 5045 proposes an amendment to the Income Tax Act of 1967, aiming to create a tax credit for individuals who have obtained higher education degrees from institutions located in Michigan and who continue to reside and work in the state. Under this bill, qualified taxpayers can claim a credit equal to 50% of the payments made on qualified student loans during the tax year. This initiative is designed to incentivize graduates to remain in Michigan after they finish their studies, thereby promoting the state's workforce retention and growth.

Contention

However, the proposed bill could see points of contention from various groups. Critics may argue that while the intention is to support graduates, the bill does not address the overarching issue of rising tuition costs and student debt burdens that many graduates face. Additionally, concerns could arise regarding the stipulations that tie the tax credit to residency and employment, potentially excluding some graduates who may be working remotely or in positions that do not fulfill the bill's criteria. Thus, while aiming to stimulate local economies, the bill could inadvertently limit its effectiveness or fairness in application.