Michigan House Bill HB5649

Michigan 2025-2026 Regular Session

• Introduced: 3/3/26
• Refer: 3/3/26

Caption

Corporate income tax: credits; employer credit for certain apprenticeship and career and technical education programs: provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding secs. 279 & 672.

Impact

The implementation of HB5649 is expected to positively influence the state's economic landscape by encouraging businesses to invest in developing skilled labor. The credits are designed to motivate employers to create and maintain apprenticeship programs that adhere to federal standards, ultimately fostering a more qualified workforce in Michigan. Alongside creating job opportunities for younger individuals, this bill seeks to improve vocational training quality across the state, aligning educational programs with the needs of local labor markets. This initiative is anticipated to enhance collaboration between educational institutions and employers, thereby addressing workforce gaps.

Summary

House Bill 5649 aims to amend the Income Tax Act of 1967 by introducing tax credits for employers who engage in training apprentices and employing eligible students through work-based learning experiences. Starting from tax years after January 1, 2026, qualified taxpayers can claim a credit of 50% of their expenses associated with training apprentices and 50% of expenses related to eligible students. The cap for these credits is set at $2,000 per apprentice or student, providing financial incentives for employers to invest in workforce development initiatives. For smaller businesses with fewer than 50 employees, additional support is given, allowing them to claim 10% of the total credits earned per apprentice and student.

Contention

While proponents highlight the potential for economic growth and skilled workforce development, criticisms arise around the bill’s long-term financial implications for state tax revenue. Opponents might argue that the credits provided could lead to significant reductions in tax income, especially if uptake by businesses is widespread. Furthermore, concerns about ensuring equitable access to these apprenticeship opportunities may be raised, particularly regarding minority and underserved populations. There may also be a call for accountability measures to evaluate the effectiveness of such programs and their true impact on employment rates and wages for apprentices.