Michigan House Bill HB5772

Michigan 2023-2024 Regular Session

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

Caption

Individual income tax: withholding requirements; work opportunity withholdings tax credit for certain tax exempt organizations; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 714. TIE BAR WITH: HB 5771'24

Impact

The proposed change is expected to have a significant impact on employment opportunities within the state, particularly for individuals belonging to designated targeted groups. By providing a financial incentive for tax-exempt employers to hire these individuals, the bill aims to enhance job creation and workforce development. This could contribute positively to local economies and increase the support for vulnerable populations through employment, which aligns with broader goals of improving community welfare and economic inclusivity.

Summary

House Bill 5772 amends the Income Tax Act of 1967 to introduce a work opportunity tax credit for certain tax-exempt organizations starting in the tax year of 2024. This bill allows these organizations to claim a credit against their withholding tax liabilities based on wages paid to qualified employees, specifically those certified as part of a targeted group by the Michigan unemployment insurance agency. The credit is calculated as 50% of the federal work opportunity tax credit available under Internal Revenue Code section 51, but it requires that employers only consider wages of qualified employees to compute the amount.

Contention

However, there may be contention surrounding the implementation of this tax credit. Concerns might arise regarding the definition of 'qualified employees' and the effectiveness of such tax incentives in actually boosting employment numbers within the targeted groups. Critics may argue about the potential for misuse or insufficient monitoring of the program, leading to calls for accountability measures or amendments to ensure that the credits effectively benefit the intended recipients without imposing undue burdens on the state's tax revenue stream.