Michigan House Bill HB5628

Michigan 2023-2024 Regular Session

• Introduced: 3/20/24
• Refer: 3/20/24

Caption

Individual income tax: credit; refundable credit to cover the cost of basic needs; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 282.

Impact

By implementing this refundable tax credit, HB5628 is expected to provide significant financial relief to Michigan taxpayers with limited incomes. With the credit being calculated based on the federal poverty level, it aims to make tax obligations fairer by considering taxpayers' circumstances. Additional state funds will be refunded to individuals whose credits exceed their tax liability, encouraging financial sustainability for lower-income households. The bill essentially aims to inject more disposable income into struggling families, supporting their fundamental needs.

Summary

House Bill 5628 introduces a new provision in the Income Tax Act of 1967, specifically adding section 282 that allows for a refundable income tax credit aimed at assisting taxpayers cover basic needs. Starting from tax years beginning on or after January 1, 2024, taxpayers can claim a credit equal to the federal poverty level for their household minus any personal exemptions. This initiative is aimed at alleviating financial strain on low-income families, thereby increasing affordability and support for basic living expenses.

Contention

There could be notable points of contention surrounding the enactment of HB5628. Critics might argue about the financial implications for the state's budget, questioning the viability of increased tax credits and potential refunds. Supporters may counter that the increased spending on tax credits could stimulate the economy by providing low-income families with more funds to spend on essential goods and services. The long-term sustainability of such credits and their effectiveness in actually meeting the needs of the targeted demographic could be central to the debates surrounding this bill.