Michigan House Bill HB4933

Michigan 2023-2024 Regular Session

• Introduced: 8/23/23
• Refer: 8/23/23

Caption

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

Impact

The proposed credit is applicable to tax years starting January 1, 2024, and presents usage limitations, including capping the credit at no more than 20% of the average yearly tuition for public universities in Michigan, and a maximum eligibility period of ten years post-graduation for claiming the credit. Importantly, it requires qualified taxpayers to provide proof of residency, educational qualifications, and employment in the state to claim this credit. This measure reflects a proactive approach to alleviate the financial burden of student loans for graduates, with the potential effect of enhancing workforce retention.

Summary

House Bill 4933, also known as the 'Make it in Michigan credit,' proposes an amendment to the Income Tax Act of 1967 by adding a new section that allows qualified taxpayers to claim a tax credit for a portion of their student loan payments. Specifically, the bill offers a credit equal to 50% of the amount paid on a qualified student loan for those who have graduated from a high school or postsecondary institution in Michigan and who have relocated or remained in the state for employment. This initiative aims to encourage graduates to stay or return to Michigan, thereby fostering economic growth and retaining skilled workers within the state.

Contention

While the bill aims to create incentives for employment and residence in Michigan among graduates, it may also raise questions regarding its fiscal implications on the state's tax revenue. Critics could argue that offering substantial tax credits to recent graduates could lead to budgetary challenges for state-funded programs. Additionally, the requirements for obtaining the credit—specifically, the need for substantial documentation—might deter eligible individuals from applying, thereby reducing the intended benefits of the bill.