Individual income tax: credit; credit for donations to certain charitable organizations that provide accommodation, food, or meals to indigents; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 260. TIE BAR WITH: HB 4531'23
If enacted, HB4530 would provide critical financial support to food kitchens, food banks, and shelters for homeless individuals by encouraging more individuals to donate due to the tax benefits associated with these contributions. The bill sets a maximum credit limit—$100 for individual taxpayers and $200 for joint returns, while also specifying that for estates or trusts, the maximum credit is capped at either 10% of their tax liability or $5,000, whichever is less. This legislation is expected to stimulate community engagement and enhance the operational capacity of charitable entities within Michigan.
House Bill 4530 aims to amend the Income Tax Act of 1967 in Michigan by introducing a tax credit for individual taxpayers contributing to charitable organizations that provide essential services such as food and overnight accommodations to indigent persons. The credit allows taxpayers to claim an amount equal to 50% of their contributions, including both cash and the value of food items, with specific limitations based on whether the taxpayer is a resident estate or trust. This provision is designed to incentivize charitable donations and support local organizations that serve vulnerable populations.
While the intent of HB4530 is largely supportive, there could be debates concerning the effectiveness and reach of tax credits in fostering significant charitable contributions compared to direct funding methods by the state. Critics may argue that tax credits primarily benefit wealthier taxpayers who may have more disposable income to contribute, potentially leaving out those who cannot afford to contribute at levels that warrant significant tax relief. Furthermore, there may also be discussions around the mechanisms for ensuring that donations truly benefit the intended services and do not lead to misallocation of funds or lack of accountability from the receiving organizations.