October 17, 2018, Introduced by Rep. LaGrand 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 280 and 675.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 280. (1) For tax years beginning on and after January 1,
2019 and subject to the limitations under this section, a qualified
taxpayer may claim a credit against the tax imposed by this part
equal to the following percentages of the amount paid on a
qualified student loan by the qualified taxpayer during the tax
year:
(a) For a taxpayer who satisfies both eligibility conditions
under subsection (6)(d)(i) and (ii), 50%.
(b) For a taxpayer who only satisfies 1 of the eligibility
conditions under subsection (6)(d)(i) or (ii), 25%.
(2) A qualified taxpayer shall not claim a credit of more than
20% of the average yearly tuition to attend a similar postsecondary
educational institution in this state under this section for any
single tax year. A qualified tax payer is only eligible to claim
the credit allowed under this section within the 10 tax years
immediately following his or her graduation from the postsecondary
educational institution.
(3) 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.
(4) 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 be refunded.
(5) The credit allowed under this section shall be known as
the "Michigan tuition reimbursement credit".
(6) As used in this section:
(a) "Postsecondary educational institution" means a degree or
certificate granting college, university, community college, junior
college, or trade, vocational, or occupational school.
(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 or certification from a
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 1155.
(d) "Qualified taxpayer" means a taxpayer who is a resident of
this state, who is employed in this state, and who satisfies at
least 1 of the following:
(i) Has graduated from a high school located in this state.
(ii) Has received a degree or certification from a
postsecondary educational institution located in this state.
Sec. 675. (1) For tax years beginning on and after January 1,
2019 and subject to the limitations under this section, a taxpayer
may claim a credit against the tax imposed by this part equal to
the following percentages of the amount paid on a qualified student
loan by the taxpayer on behalf of a qualified employee during the
tax year:
(a) For a qualified employee who satisfies both eligibility
conditions under subsection (6)(b)(i) and (ii), 50%.
(b) For a qualified employee who only satisfies 1 of the
eligibility conditions under subsection (6)(b)(i) or (ii), 25%.
(2) A taxpayer shall not claim a credit of more than 20% of
the average yearly tuition to attend a similar postsecondary
educational institution in this state under this section for any
single tax year for any single qualified employee.
(3) 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.
(4) 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 be refunded.
(5) The credit allowed under this section shall be known as
the "Michigan tuition reimbursement credit".
(6) As used in this section:
(a) "Postsecondary educational institution" means a degree or
certificate granting college, university, community college, junior
college, or trade, vocational, or occupational school.
(b) "Qualified employee" means an employee who is a resident
of this state, who received a degree or certification from a
postsecondary educational institution within the 10 immediately
preceding tax years, and who satisfies at least 1 of the following:
(i) Has graduated from a high school located in this state.
(ii) Has received a degree or certification from a
postsecondary educational institution located in this state.
(c) "Qualified student loan" means any state or federal loans
incurred to attend and receive a degree or certification from a
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 1155.