Individual income tax: credit; working parent credit; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 272a.
The implementation of SB0838 is expected to have a significant impact on state tax laws by creating new financial incentives for taxpayers with young dependents. This credit is designed to alleviate the costs associated with raising children, addressing some of the financial strains many families face today. Furthermore, the bill establishes a mechanism for the state to provide monthly advance refund payments to eligible taxpayers, adding a layer of financial assistance which can enhance budgeting flexibility for families throughout the year.
Senate Bill 838 (SB0838) proposes amendments to the Income Tax Act of 1967 to introduce a tax credit aimed at supporting families with young dependents. The proposal allows qualified taxpayers to claim a credit of $5,500 for each dependent who is three years old or younger, effective for tax years starting January 1, 2024. This bill seeks to provide immediate financial relief to families by lowering their tax burden based on the number of young children they care for, promoting financial stability for working parents and caregivers.
Notably, the bill could be a subject of contention among lawmakers and stakeholders. Supporters argue that the tax credit will greatly benefit working families and stimulate local economies by allowing parents to allocate additional funds towards everyday expenses. In contrast, opponents may express concerns regarding the financial implications for the state's tax revenue, questioning whether such credits could significantly limit state funding for essential services. There may also be debates about the clarity around the definition of 'qualified dependents' and how the criteria set forth adequately address diverse family situations.