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SB-967, As Passed Senate, June 18, 2026
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SENATE BILL NO. 967
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
(MCL 206.1 to 206.847) by adding sections 279, 679, and 821.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 279. (1) Subject to subsection (2), for tax years that 1
begin on and after January 1, 2027, a qualified taxpayer may claim 2
a state low-income housing tax credit against the tax imposed under 3
this part in an amount equal to the amount allocated to the 4
taxpayer for the tax year as provided on the eligibility 5
May 14, 2026, Introduced by Senator IRWIN and referred to Committee on Housing and Human
Services.
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certificate and reported on the allocation form. The qualified 1
taxpayer must attach a copy of the allocation form for that 2
calendar year to the annual return filed under this part for the 3
same tax year on which a credit under this section is being 4
claimed. A qualified taxpayer is not eligible to claim a credit 5
under this section for any tax year unless that taxpayer and the 6
amount of the credit allocated to that taxpayer is listed on the 7
allocation form attached to the annual return for that tax year. 8
(2) If any portion of the federal credit allocated to a 9
qualified project for which a state low-income housing credit is 10
also claimed under this section, is recaptured under section 42(j) 11
of the internal revenue code, 26 USC 42, or is otherwise 12
disallowed, the department, in consultation with the authority, 13
shall recapture a proportionate amount of the tax credit claimed 14
under this section in connection with the same qualified project. 15
If the department, in consultation with the authority, determines 16
to recapture the tax credit, the department and authority shall 17
determine the taxpayer or taxpayers that claimed the credit, the 18
tax against which the credit was claimed, and the amount to be 19
recaptured from each respective taxpayer and have that recaptured 20
amount added back to the tax liability of those taxpayers under 21
this part. The statute of limitations on assessments under this act 22
does not bar an assessment made under this subsection. 23
(3) The credit allowed under this section must be claimed 24
after all other credits allowed under this part. If the credit 25
allowed under this section for the tax year and any unused 26
carryforward of the credit allowed by this section exceed the 27
qualified taxpayer's tax liability for the tax year, that portion 28
that exceeds the tax liability for the tax year must not be 29
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refunded but may be carried forward to offset tax liability in 1
subsequent tax years for 10 years or until used up, whichever 2
occurs first. If a qualified taxpayer has an unused carryforward of 3
a credit under this section, the amount otherwise added under 4
subsection (2) to the qualified taxpayer's tax liability may 5
instead be used to reduce the qualified taxpayer's carryforward 6
under this section. 7
(4) As used in this section: 8
(a) "Allocation form" means the form submitted by the 9
designated reporter under 22e(11) of the state housing development 10
authority act of 1966, 1966 PA 346, MCL 125.1422e. 11
(b) "Authority" means the Michigan state housing development 12
authority created under section 21 of the state housing development 13
authority act of 1966, 1966 PA 346, MCL 125.1421. 14
(c) "Designated reporter", "eligibility certificate", "equity 15
owner", and "project owner" mean those terms as defined under 16
section 22e of the state housing development authority act of 1966, 17
1966 PA 346, MCL 125.1422e. 18
(d) "Qualified taxpayer" means a taxpayer that is the project 19
owner or an equity owner that has been allocated a state low-income 20
housing tax credit. 21
(e) "State low-income housing tax credit" means a credit 22
reserved under section 22e of the state housing development 23
authority act of 1966, 1966 PA 346, MCL 125.1422e. 24
Sec. 679. (1) Subject to subsection (2), for tax years that 25
begin on and after January 1, 2027, a qualified taxpayer may claim 26
a state low-income housing tax credit against the tax imposed under 27
this part in an amount equal to the amount allocated to the 28
taxpayer for the tax year as provided on the eligibility 29
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KAS S06323'26 a_SB967_APS_1 tird8k
certificate and reported on the allocation form. The qualified 1
taxpayer must attach a copy of the allocation form for that 2
calendar year to the annual return filed under this part for the 3
same tax year on which a credit under this section is being 4
claimed. A qualified taxpayer is not eligible to claim a credit 5
under this section for any tax year unless that taxpayer and the 6
amount of the credit allocated to that taxpayer is listed on the 7
allocation form attached to the annual return for that tax year. 8
(2) If any portion of the federal credit allocated to a 9
qualified project for which a state low-income housing credit is 10
also claimed under this section is recaptured under section 42(j) 11
of the internal revenue code, 26 USC 42, or is otherwise 12
disallowed, the department, in consultation with the authority, 13
shall recapture a proportionate amount of the tax credit claimed 14
under this section in connection with the same qualified project. 15
If the department, in consultation with the authority, determines 16
to recapture the tax credit, the department and authority shall 17
determine the taxpayer or taxpayers that claimed the credit, the 18
tax against which the credit was claimed, and the amount to be 19
recaptured from each respective taxpayer and have that recaptured 20
amount added back to the tax liability of those taxpayers under 21
this part. The statute of limitations on assessments under this act 22
does not bar an assessment made under this subsection. 23
(3) The credit allowed under this section must be claimed 24
after all other credits allowed under this part. If the credit 25
allowed under this section for the tax year and any unused 26
carryforward of the credit allowed by this section exceed the 27
qualified taxpayer's tax liability for the tax year, that portion 28
that exceeds the tax liability for the tax year must not be 29
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refunded but may be carried forward to offset tax liability in 1
subsequent tax years for 10 years or until used up, whichever 2
occurs first. If a qualified taxpayer has an unused carryforward of 3
a credit under this section, the amount otherwise added under 4
subsection (2) to the qualified taxpayer's tax liability may 5
instead be used to reduce the qualified taxpayer's carryforward 6
under this section. 7
(4) As used in this section: 8
(a) "Allocation form" means the form submitted by the 9
designated reporter under 22e(11) of the state housing development 10
authority act of 1966, 1966 PA 346, MCL 125.1422e. 11
(b) "Authority" means the Michigan state housing development 12
authority created under section 21 of the state housing development 13
authority act of 1966, 1966 PA 346, MCL 125.1421. 14
(c) "Designated reporter", "eligibility certificate", "equity 15
owner", and "project owner" mean those terms as defined under 16
section 22e of the state housing development authority act of 1966, 17
1966 PA 346, MCL 125.1422e. 18
(d) "Qualified taxpayer" means a taxpayer that is the project 19
owner or an equity owner that has been allocated a state low-income 20
housing tax credit. 21
(e) "State low-income housing tax credit" means a credit 22
reserved under section 22e of the state housing development 23
authority act of 1966, 1966 PA 346, MCL 125.1422e. 24
Sec. 821. (1) Subject to subsection (2), for tax years that 25
begin on and after January 1, 2027, a qualified taxpayer may claim 26
a state low-income housing tax credit against the tax imposed under 27
this part in an amount equal to the amount allocated to the 28
taxpayer for the tax year as provided on the eligibility 29
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KAS S06323'26 a_SB967_APS_1 tird8k
certificate and reported on the allocation form. The qualified 1
taxpayer must attach a copy of the allocation form for that 2
calendar year to the annual return filed under this part for the 3
same tax year on which a credit under this section is being 4
claimed. A qualified taxpayer is not eligible to claim a credit 5
under this section for any tax year unless that taxpayer and the 6
amount of the credit allocated to that taxpayer is listed on the 7
allocation form attached to the annual return for that tax year. 8
(2) If any portion of the federal credit allocated to a 9
qualified project for which a state low-income housing credit is 10
also claimed under this section is recaptured under section 42(j) 11
of the internal revenue code, 26 USC 42, or is otherwise 12
disallowed, the department, in consultation with the authority, 13
shall recapture a proportionate amount of the tax credit claimed 14
under this section in connection with the same qualified project. 15
If the department, in consultation with the authority, determines 16
to recapture the tax credit, the department and authority shall 17
determine the taxpayer or taxpayers that claimed the credit, the 18
tax against which the credit was claimed, and the amount to be 19
recaptured from each respective taxpayer and have that recaptured 20
amount added back to the tax liability of those taxpayers under 21
this part. The statute of limitations on assessments under this act 22
does not bar an assessment made under this subsection. 23
(3) The credit allowed under this section must be claimed 24
after all other credits allowed under this part. If the credit 25
allowed under this section for the tax year and any unused 26
carryforward of the credit allowed by this section exceed the 27
qualified taxpayer's tax liability for the tax year, that portion 28
that exceeds the tax liability for the tax year must not be 29
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refunded but may be carried forward to offset tax liability in 1
subsequent tax years for 10 years or until used up, whichever 2
occurs first. If a qualified taxpayer has an unused carryforward of 3
a credit under this section, the amount otherwise added under 4
subsection (2) to the qualified taxpayer's tax liability may 5
instead be used to reduce the qualified taxpayer's carryforward 6
under this section. 7
(4) As used in this section: 8
(a) "Allocation form" means the form submitted by the 9
designated reporter under 22e(11) of the state housing development 10
authority act of 1966, 1966 PA 346, MCL 125.1422e. 11
(b) "Authority" means the Michigan state housing development 12
authority created under section 21 of the state housing development 13
authority act of 1966, 1966 PA 346, MCL 125.1421. 14
(c) "Designated reporter", "eligibility certificate", "equity 15
owner", and "project owner" mean those terms as defined under 16
section 22e of the state housing development authority act of 1966, 17
1966 PA 346, MCL 125.1422e. 18
(d) "Qualified taxpayer" means a taxpayer that is the project 19
owner or an equity owner that has been allocated a state low-income 20
housing tax credit. 21
(e) "State low-income housing tax credit" means a credit 22
reserved under section 22e of the state housing development 23
authority act of 1966, 1966 PA 346, MCL 125.1422e. 24
Enacting section 1. This amendatory act does not take effect 25
unless all of the following bills of the 103rd Legislature are 26
enacted into law: 27
(a) Senate Bill No. 966. 28
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Final Page
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(b) Senate Bill No. 968. 1