Michigan House Bill HB5771

Michigan 2023-2024 Regular Session

• Introduced: 5/30/24
• Refer: 5/30/24

Caption

Individual income tax: credit; employer work opportunity tax credit for qualified employees; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding secs. 279 & 679.

Impact

The introduction of this tax credit aims to incentivize businesses to hire individuals from specific demographics typically facing barriers to employment. By easing the financial burden on employers through tax relief, the legislation could significantly contribute to reducing unemployment rates among these groups, stimulating economic growth in Michigan. Furthermore, this could also lead to a more robust labor market as companies may find it financially beneficial to hire from these targeted groups.

Summary

House Bill 5771 seeks to amend the Income Tax Act of 1967, specifically by adding new sections that allow employers to claim a work opportunity tax credit based on wages paid to qualified employees. This credit will be applicable for tax years beginning on and after January 1, 2024. Employers, excluding tax-exempt organizations, will be eligible for a credit equal to 50% of what they are allowed to claim under the federal section 51 tax credit. This initiative is intended to foster job creation among targeted groups of individuals, thereby boosting employment rates within the state.

Contention

Notably, there are concerns about the scope and effectiveness of such tax incentives. Critics may argue that while tax credits can help, they don't address the broader barriers that prevent targeted groups from entering the workforce. There may also be discussions on whether the credits truly result in new job creation or if they simply subsidize existing practices. As the implementation date approaches, these discussions will undoubtedly play a crucial role in shaping how the bill is perceived and its actual efficacy in achieving its stated goals.