Michigan Senate Bill SB0308

Michigan 2025-2026 Regular Session

• Introduced: 5/15/25
• Refer: 5/15/25

Caption

Individual income tax: credit; working parent tax credit and advanced monthly payments of that credit; create and provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 272b.

Summary

Senate Bill 0308 proposes amendments to the Income Tax Act of 1967 in Michigan by introducing a new section (272b) that allows qualified taxpayers to claim a tax credit of $5,500 for each qualified dependent, defined as a dependent aged four or younger. This credit aims to provide financial relief to families with young children, particularly those with household incomes not exceeding 150% of the state median income. The bill's implementation is slated for tax years starting January 1, 2025, proposing a significant change to the existing tax structure aimed at supporting lower-income households. In addition to the tax credit, SB0308 establishes an advance refund payment system where eligible taxpayers can receive monthly payments aligned with the anticipated annual tax credit. This initiative is designed to enhance cash flow for families and responsiveness to their financial needs throughout the year, rather than waiting until the tax season. These payments will be set based on prior tax data to estimate the total credit for the upcoming tax year. The legislation, however, stipulates that taxpayers participating in the Rx Kids program cannot claim the credit in the same tax year. This exclusion has raised questions among stakeholders regarding the intersection of health and tax policy, as it positions the Rx Kids program—which addresses pediatric public health issues—against direct tax benefits for families. This point of contention may influence discussions among lawmakers concerning the priorities for family and health support initiatives in the legislature. The impact of SB0308 on state laws is substantial as it expands existing tax credits significantly and intertwines them with state-supported public health efforts. Legislators will likely debate the long-term ramifications of this interrelation on both tax revenue and the efficacy of programs aimed at supporting vulnerable populations. Supporters may argue it represents a necessary investment in the state's children and families, while opponents might assess its budgetary implications and the potential exclusion of those reliant on other state programs. Overall, SB0308 signals a growing recognition of the need for targeted financial support mechanisms for families with young dependents.