Michigan House Bill HB5783

Michigan 2023-2024 Regular Session

• Introduced: 6/5/24
• Refer: 6/5/24
• Report Pass: 11/13/24
• Engrossed: 12/5/24
• Refer: 12/10/24
• Report Pass: 12/18/24
• Enrolled: 12/23/24

Caption

Individual income tax: other; qualified higher education expenses under the Michigan education savings program; conform with most recent federal modifications. Amends secs. 2 & 16 of 2000 PA 161 (MCL 390.1472 & 390.1486).

Impact

The implementation of HB 5783 will provide Michigan residents increased opportunities for tax-advantaged savings for higher education. By conforming state law to federal guidelines, the bill enhances the attractiveness of the Michigan education savings program. Participants can now utilize their education savings accounts for a broader range of qualified higher education expenses, including various costs associated with apprenticeship programs and the repayment of qualified education loans. This could lead to increased enrollment in higher education institutions as families feel more financially empowered to save for educational costs.

Summary

House Bill 5783 aims to amend the Michigan education savings program established by the 2000 Public Act 161. The bill seeks to align state law with recent federal modifications regarding education savings accounts. Notably, it provides provisions for tax credits or deductions related to contributions and withdrawals from these accounts. The impact of the bill is primarily on individuals and entities looking to save for higher education expenses, as it expands the number of eligible expenses that can be covered under the education savings program.

Sentiment

Support for the bill appears strong among various stakeholders who view it as a significant improvement to the existing education savings framework. Proponents argue that the alignment with federal modifications not only benefits individual savers but also promotes the importance of higher education and vocational training. However, some critiques might arise concerning the effectiveness of the tax benefits relative to the needs of those with more substantial education costs. Overall, the sentiment has been positive, with legislators highlighting the importance of education funding in state economic development.

Contention

While there is general support for HB 5783, some contention could stem from ongoing debates around the adequacy and equity of funding for higher education in Michigan. Critics may raise concerns about the long-term sustainability of tax benefits, especially for individuals from lower-income backgrounds who may find it challenging to contribute to such savings accounts. Additionally, the conversation may include discussions about whether the state should prioritize direct funding of education institutions over tax incentives for savings, reflecting broader educational policy discussions.