HOUSE BILL No. 4409

 

 

March 23, 2017, Introduced by Reps. Schor, Zemke, Faris, Moss, Camilleri, Love, Hertel, Ellison, Greig, Wittenberg, Chang, Jones, Hammoud, Pagan and Gay-Dagnogo and referred to the Committee on Tax Policy.

 

     A bill to amend 1967 PA 281, entitled

 

"Income tax act of 1967,"

 

(MCL 206.1 to 206.713) by adding sections 275 and 675.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 275. (1) Beginning on and after January 1, 2017, a

 

qualified taxpayer may claim a credit against the tax imposed by

 

this part equal to 50% of the amount paid on a qualified student

 

loan by the qualified taxpayer during the tax year. A qualified

 

taxpayer shall not claim a credit of more than 20% of the average

 

yearly tuition for Michigan's public universities under this

 

section for any single tax year.

 

     (2) To be eligible for the credit under this section, the

 

qualified taxpayer shall provide the department with proof of

 

residency and proof of employment in this state. The department may

 

also require reasonable proof from the qualified taxpayer in


support of payments claimed to be paid for a qualified student loan

 

under this section.

 

     (3) If the credit allowed under this section exceeds the

 

qualified taxpayer's tax liability for the tax year, that portion

 

that exceeds the tax liability for the tax year shall not be

 

refunded.

 

     (4) As used in this section:

 

     (a) "Approved postsecondary educational institution" means any

 

of the following:

 

     (i) A college, university, community college, or junior

 

college described in section 4, 5, or 6 of article VIII of the

 

state constitution of 1963 or established under section 7 of

 

article VIII of the state constitution of 1963.

 

     (ii) An independent nonprofit college or university located in

 

this state.

 

     (b) "Proof of residency" means a filed Michigan individual

 

income tax return that includes the taxpayer's certification that

 

he or she is a resident, a signed affidavit of Michigan residency,

 

or other proof of residency acceptable to the department.

 

     (c) "Qualified student loan" means any state or federal loans

 

incurred to attend and receive a degree from an approved

 

postsecondary educational institution, including, but not limited

 

to, state loans authorized under the higher education loan

 

authority act, 1975 PA 222, MCL 390.1151 to 390.1165, and federal

 

loans authorized under the higher education act of 1965, Public Law

 

89-329, 20 USC 1001 to 1161aa-1.

 

     (d) "Qualified taxpayer" means a taxpayer who received a


degree from an approved postsecondary educational institution after

 

May 1, 2017, who is a resident of this state, and who is employed

 

in this state.

 

     Sec. 675. (1) Beginning on and after January 1, 2017, a

 

taxpayer may claim a credit against the tax imposed by this part

 

equal to 50% of the amount of qualified student loan payments made

 

by the taxpayer on behalf of a qualified employee during the tax

 

year for which the credit is claimed or 20% of the average yearly

 

tuition for Michigan's public universities per employee, whichever

 

is less.

 

     (2) To be eligible for the credit under this section, the

 

taxpayer in a form as prescribed by the department shall provide

 

reasonable proof in support of payments claimed to be paid on

 

behalf of a qualified employee for his or her qualified student

 

loan under this section. The form shall include, at a minimum, all

 

of the following:

 

     (a) The taxpayer's federal employer identification number or

 

the Michigan treasury number assigned.

 

     (b) The name and address of the qualified employee.

 

     (c) The date and amount of each payment made toward a

 

qualified student loan.

 

     (d) Any other criteria that the department considers

 

appropriate for the determination of eligibility for the credit

 

under this section.

 

     (3) If the amount of the credit allowed under this section

 

exceeds the tax liability of the taxpayer for the tax year, that

 

portion of the credit that exceeds the tax liability of the


taxpayer for the tax year shall not be refunded.

 

     (4) As used in this section:

 

     (a) "Approved postsecondary educational institution" means any

 

of the following:

 

     (i) A college, university, community college, or junior

 

college described in section 4, 5, or 6 of article VIII of the

 

state constitution of 1963 or established under section 7 of

 

article VIII of the state constitution of 1963.

 

     (ii) An independent nonprofit college or university located in

 

this state.

 

     (b) "Qualified employee" means an employee who received a

 

degree from an approved postsecondary educational institution after

 

May 1, 2017 and who is a resident of this state.

 

     (c) "Qualified student loan" means any state or federal loans

 

incurred to attend and receive a degree from an approved

 

postsecondary educational institution, including, but not limited

 

to, state loans authorized under the higher education loan

 

authority act, 1975 PA 222, MCL 390.1151 to 390.1165, and federal

 

loans authorized under the higher education act of 1965, Public Law

 

89-329, 20 USC 1001 to 1161aa-1.