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SENATE BILL NO. 995
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
(MCL 206.1 to 206.847) by adding sections 279 and 679.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 279. (1) For tax years beginning on and after January 1, 1
2026, a taxpayer other than an organization exempt from federal 2
taxation under section 501(c) of the internal revenue code that is 3
an employer may claim a work opportunity tax credit against the tax 4
imposed by this part for qualified wages paid to qualified 5
May 20, 2026, Introduced by Senators SHINK, OUTMAN and CHANG and referred to
Committee on Economic and Community Development.
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employees equal to 50% of the amount of the credit the taxpayer is 1
allowed to claim as a credit under section 51 of the internal 2
revenue code for a tax year on a return filed under this part for 3
the same tax year or would have been allowed to claim if the credit 4
under section 51 of the internal revenue code was still in effect. 5
In calculating the amount of the credit allowed under this section, 6
the taxpayer shall exclude from the amount of the credit allowed or 7
that would have been allowed under section 51 of the internal 8
revenue code for that same tax year both of the following: 9
(a) Any amount attributable to employees who were not 10
qualified employees. 11
(b) Any amount of unused credits under section 51 of the 12
internal revenue code that is carried back or forward from another 13
tax year in accordance with section 39 of the internal revenue 14
code. 15
(2) For a taxpayer who is a member of a flow-through entity 16
that qualifies for the credit under this section, that taxpayer may 17
claim a credit against the member's tax liability under this part 18
based on the member's distributive share of business income 19
reported from that flow-through entity or an alternative method 20
approved by the department. 21
(3) If the credit allowed under this section for the tax year 22
exceeds the taxpayer's tax liability for the tax year, that portion 23
that exceeds the tax liability for the tax year must not be 24
refunded. 25
(4) As used in this section: 26
(a) "Member of a targeted group" means an individual 27
identified and defined under section 51(d) of the internal revenue 28
code. 29
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(b) "Qualified employee" means an employee who is a resident 1
of this state and has been certified by the Michigan unemployment 2
insurance agency as a member of a targeted group. 3
(c) "Qualified wages" means that term as defined under section 4
51 of the internal revenue code. 5
Sec. 679. (1) For tax years beginning on and after January 1, 6
2026, a taxpayer other than an organization exempt from federal 7
taxation under section 501(c) of the internal revenue code that is 8
an employer may claim a work opportunity tax credit against the tax 9
imposed by this part for qualified wages paid to qualified 10
employees equal to 50% of the amount of the credit the taxpayer is 11
allowed to claim as a credit under section 51 of the internal 12
revenue code for a tax year on a return filed under this part for 13
the same tax year or would have been allowed to claim if the credit 14
under section 51 of the internal revenue code was still in effect. 15
In calculating the amount of the credit allowed under this section, 16
the taxpayer shall exclude from the amount of the credit allowed or 17
that would have been allowed under section 51 of the internal 18
revenue code for that same tax year, both of the following: 19
(a) Any amount attributable to employees who were not 20
qualified employees. 21
(b) Any amount of unused credits under section 51 of the 22
internal revenue code that is carried back or forward from another 23
tax year in accordance with section 39 of the internal revenue 24
code. 25
(2) If the credit allowed under this section for the tax year 26
exceeds the taxpayer's tax liability for the tax year, that portion 27
that exceeds the tax liability for the tax year must not be 28
refunded. 29
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(3) As used in this section: 1
(a) "Member of a targeted group" means an individual 2
identified and defined under section 51(d) of the internal revenue 3
code. 4
(b) "Qualified employee" means an employee who is a resident 5
of this state and has been certified by the Michigan unemployment 6
insurance agency as a member of a targeted group. 7
(c) "Qualified wages" means that term as defined in section 51 8
of the internal revenue code. 9
Enacting section 1. This amendatory act does not take effect 10
unless Senate Bill No. 994 of the 103rd Legislature is enacted into 11
law. 12