Individual income tax: credit; qualified child tax credit; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 277.
If enacted, HB5807 would not only impact individual taxpayers but could also have broader economic implications. By providing a tax credit, the bill is expected to put additional disposable income into the hands of families, which may, in turn, stimulate consumer spending. However, the bill also states that any portion of the credit exceeding the taxpayer's liability will not be refunded, meaning that while it is beneficial for lowering taxes, it does not provide cash back for credits that exceed the owed tax—a point that could influence its uptake and effectiveness.
House Bill 5807 proposes an amendment to the Income Tax Act of 1967, specifically by adding a new section that introduces a tax credit of $500 per qualified dependent for taxpayers. This credit applies for tax years from January 1, 2025, to December 31, 2028. A ‘qualified dependent’ is defined as a child who is younger than 19 years of age on the last day of the tax year for which the credit is claimed. The intent behind this legislation is to ease the financial burden on families with dependents by reducing their income tax liability.
Discussions surrounding HB5807 may center on the implications of introducing financial incentives within the tax code. Proponents argue that the tax relief for families is essential amid rising costs of living, while opponents may raise concerns over the long-term fiscal impacts on state revenues and the fairness of tax credits that might not directly assist lower-income families, who may not benefit as much if they have no tax liability to offset.
This bill aligns with similar tax initiatives aimed at supporting families, reflecting a growing trend among state legislatures to enhance family support through financial incentives. As tax credits can have direct implications for the state's budget and economic health, the deliberation over HB5807 will likely involve thorough scrutiny from various stakeholders looking to balance fiscal responsibility with community support.