Michigan Senate Bill SB0556

Michigan 2023-2024 Regular Session

• Introduced: 10/4/23
• Refer: 10/4/23

Caption

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

Impact

The bill could have significant implications for state revenue and educational funding. By allowing taxpayers to claim credits based on the foundation allowance, the state is effectively promoting private schooling and alternative education options. The consequences can lead to a decrease in public school enrollment and funding if families opt for private education, thereby placing additional strain on public education resources. Furthermore, any refunds resulting from credits exceeding tax liabilities could impact the state budget and fiscal planning.

Summary

Senate Bill 556 is designed to amend the Income Tax Act of 1967 by introducing a new tax credit for qualifying dependents. Specifically, starting from tax years that begin on or after January 1, 2024, taxpayers can claim a credit equal to the target foundation allowance set by the state school aid act of 1979 for each qualified dependent. This provision aims to provide financial support to families with children who are not enrolled in public schools, thereby enhancing educational choices and opportunities for those families.

Contention

SB 556 may spark debates regarding the implications of supporting private education through tax incentives. Supporters argue that it provides necessary flexibility and choices for parents in their children's education. In contrast, critics may view the bill as an undermining of public school systems, fearing that it could divert essential funds away from public education and exacerbate inequalities. The definition of a 'qualified dependent'—specifically the age and proficiency requirements—could also be contentious among stakeholders, as it sets standards that might exclude certain students.