Michigan Senate Bill SB0118

Michigan 2025-2026 Regular Session

• Introduced: 3/5/25
• Refer: 3/5/25

Caption

Individual income tax: credit; credit for certain qualified dependents; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 281.

Impact

This bill is expected to have a significant impact on state income tax liabilities, serving as a form of financial relief to families by allowing them to offset their taxes based on their dependents' educational status. By including provisions for the credit to exceed tax liabilities with refunds for the excess amount, the bill aims to incentivize educational proficiency among school-aged children, which may lead to broader discussions about educational support and funding across the state.

Summary

Senate Bill No. 118 proposes an amendment to the Income Tax Act of 1967, introducing a tax credit for taxpayers with qualified dependents. The bill allows taxpayers to claim a credit equal to the target foundation allowance specified in the state school aid act for the school year ending during the tax year in which the credit is claimed, for each qualified dependent supporting a claim for exemption. Notably, these dependents must not be enrolled in a public school and must demonstrate proficiency in relevant educational subjects.

Conclusion

Overall, Senate Bill No. 118 represents an effort to enhance state tax policy in relation to education and family support, although it could potentially open avenues for debate regarding educational equity and the role of public schools in educational achievement.

Contention

While the supporters of SB 118 argue that the bill fosters educational achievement by encouraging parents to ensure their qualified dependents meet proficiency standards, critics may raise concerns about the potential inequalities in tax benefits, especially for lower-income families or those unable to provide additional educational resources. The restriction that dependents must not be enrolled in public schools could also lead to debates about educational choice and the adequacy of public schooling options versus private or home schooling.