SENATE BILL NO. 308

A bill to amend 1967 PA 281, entitled

"Income tax act of 1967,"

(MCL 206.1 to 206.847) by adding section 272b.

the people of the state of michigan enact:

Sec. 272b. (1) Except as otherwise provided under this section, for tax years that begin on and after January 1, 2025, a qualified taxpayer may claim a credit against the tax imposed by this part equal to $5,500.00 for each qualified dependent of the qualified taxpayer for which an exemption was claimed under section 30(2)(b) for that same tax year. A qualified taxpayer who is enrolled in an Rx Kids program and has received payments under an Rx Kids program during the tax year is not eligible to claim a credit under this section for that same tax year. The amount of the credit allowed to be claimed under this section for the tax year must be reduced by the amount of any advance refund payments issued to the taxpayer under subsection (2) for that same tax year.

(2) The department shall establish a program for making monthly payments to qualified taxpayers, with payments, in the aggregate during any tax year, equaling the annual advance refund payment amount estimated by the department based on the qualified taxpayer's annual return filed for the immediately preceding tax year with respect to that qualified taxpayer for the current tax year. Except as otherwise provided under this subsection, the monthly payments made to any qualified taxpayer for any tax year must be in equal amounts. The department may adjust the amount of any monthly payment to reflect an excess or deficit in prior payments as determined necessary by the department. Before January 31 of each year, the department shall provide each qualified taxpayer that the department determines is eligible for the credit under this section with a written notice of the advance refund payments to be made during the tax year and the aggregate amount of those payments. The advance refund payments issued under this subsection may be disbursed electronically to an account at a financial institution of the qualified taxpayer's choice to which the qualified taxpayer authorized the direct deposit of a refund of taxes on the annual return filed under this part for the immediately preceding tax year. If the qualified taxpayer did not include authorization for a direct deposit, the department shall issue a negotiable check and send it by first-class mail to the address shown on the annual return filed under this part for the immediately preceding tax year.

(3) If the credit allowed under this section exceeds the tax liability of the qualified taxpayer for the tax year, that portion of the credit that exceeds the tax liability must be refunded.

(4) As used in this section:

(a) "Qualified dependent" means a dependent who is 4 years of age or less on the last day of the tax year for which the credit is claimed.

(b) "Qualified taxpayer" means a taxpayer with a household income of not more than 150% of the state median income.

(c) "Rx Kids program" means a program of Michigan State University Pediatric Public Health Initiative, in collaboration with Poverty Solutions at the University of Michigan, and administered by GiveDirectly.

(d) "State median income" means that term as defined under 42 USC 8622 and published by the Secretary of the United States Department of Health and Human Services for the federal low income home energy assistance program.