Individual income tax: credit; earned income tax credit; increase. Amends 1967 PA 281 (MCL 206.1 - 206.846) by adding sec. 272a.
The bill's retroactive provision for the 2022 tax year suggests an attempt to address fiscal pressures on individuals resulting from broader economic challenges. By establishing this new tax credit, SB 144 aims to enhance the existing tax benefits available to low- to moderate-income taxpayers, thus potentially increasing disposable income within this demographic. This change in the law could modify the overall dynamics of tax liability in Michigan, reflecting a shift towards more progressive tax relief measures.
Senate Bill 144 seeks to amend the Income Tax Act of 1967 by adding a new section (272a) that introduces a temporary tax credit for taxpayers who claim an existing credit under section 272 for the 2022 tax year. Specifically, the bill provides a credit amounting to 24% of the credit allowable under section 32 of the Internal Revenue Code for the same tax year. This measure is designed to directly impact taxpayers in Michigan by providing them with additional financial relief during the specified tax year.
Overall, the sentiment surrounding SB 144 appears primarily supportive among lawmakers who emphasize the necessity of providing financial assistance to low-income families during economically challenging times. Advocacy groups focused on economic justice and tax reform have also welcomed the bill, viewing it as a step in the right direction towards more equitable tax policy in Michigan. However, there may be concerns regarding the long-term sustainability of such credits and their implications for state revenues.
Despite the apparent consensus on its benefits, some points of contention are noted in discussions surrounding SB 144. Critics may express concerns about the fiscal impact of retroactive credits on the state's budget, arguing that it could exacerbate budget constraints. Furthermore, there can be apprehension regarding the administration of the credit, including the conditions under which taxpayers can apply, highlighting the need for clarity and efficiency in dissemination to ensure that intended beneficiaries can access the benefits without excessive hurdles.