Individual income tax: credit; working parent tax credit for certain dependents; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 272b.
This bill is expected to have significant implications on state tax law, particularly in its approach to property tax regulations. By setting a defined criterion for who qualifies for the tax credit, it aims to facilitate assistance for low-income families and stimulate economic engagement by making it financially feasible for parents to enter the workforce. Importantly, the bill sets a cap allowing taxpayers to claim the credit for a maximum of three dependents, thereby balancing assistance with fiscal responsibility. The refund policy for any excess credit beyond tax liability adds a safety net for families, ensuring they receive the full benefit allocated under the bill.
House Bill 4487 proposes amendments to the existing Income Tax Act of 1967 to introduce a tax credit for working parents with young children. Specifically, the bill allows qualified taxpayers to claim a credit of $2,500 for each compliant dependent aged between 4 and 6 years as of the last day of the tax year. The legislation is designed to provide financial relief to families with young children, contingent upon their income levels and the number of dependents they have. The availability of such credits aims to encourage workforce participation among parents while reducing their tax burden.
While the bill has been touted for its intent to support working families, it has also elicited skepticism regarding its potential financial impact on state revenue. Critics may argue that providing tax credits could lead to decreased revenue for state programs dependent on income tax collections. Further discussions within legislative committees may focus on ensuring that the proposed credit does not disproportionately favor higher-income families while unintentionally omitting those in greater need. This balance is crucial in maintaining equitable tax policies that address inequalities among taxpayers.