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HB 5063

Individual income tax: credit; credit for fostering animals; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 285.

2025-2026 Regular Session Introduced by Joe Aragona and 12 co-sponsors

The bill creates a nonrefundable individual income tax credit of $50 per animal fostered for at least 7 days, with $50 per each additional 30 days, up to 5 animals.

bill electronically reproduced 09/26/2025
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Bill Summary · HB 5063

Summary — HB 5063 (House Introduced Bill)

Title: Individual income tax: credit; credit for fostering animals; provide for.
Act amended: Income Tax Act of 1967 (1967 PA 281) — adds section 285 (MCL provision).
Introduced: March 13, 2025 (Rep. Mike McFall et al.) — electronically reproduced 09/26/2025; referred to Committee on Finance.
Effective for: Tax years beginning on or after January 1, 2026.

Purpose / Intent

Create an individual income tax credit to encourage Michigan residents to temporarily foster animals for qualified animal rescue organizations and shelters, thereby increasing available foster homes and supporting animal welfare efforts.

Key provisions

  • Eligibility: Taxpayers who voluntarily foster one or more animals in their personal residence for a “qualified organization.”
  • Base credit amount: $50 per animal fostered for at least 7 days during the tax year.
  • Additional credit for extended fostering: If the same animal is fostered for more than 30 days, the taxpayer may claim an additional $50 for each additional 30-day period the animal is fostered.
  • Annual cap: A taxpayer may not claim credits for fostering more than 5 animals in a single tax year.
  • Verification: Taxpayer must submit verification (form/manner prescribed by the Department) from the qualified organization confirming the foster agreement and duration.
  • Nonrefundable: The credit can reduce income tax liability but any excess credit above the taxpayer’s liability is not refundable.
  • Inflation adjustment: Beginning with tax year 2027, the per-animal credit will be adjusted annually based on the prior calendar year’s percentage increase in the U.S. Consumer Price Index (All Urban Consumers). The Department rounds the adjusted amount to the nearest $5.
  • Definitions:
    • “Qualified organization” = either (a) nonprofit animal rescue/pet shelter (IRS §501(c)(3)) or (b) animal control/protection shelter registered under 1969 PA 287 with the Dept. of Agriculture & Rural Development.
    • “Animal control shelter” and “animal protection shelter” adopt statutory definitions from 1969 PA 287.

Who is affected

  • Primary beneficiaries: Individual taxpayers who foster animals for qualifying shelters/nonprofits.
  • Beneficiaries: Qualified animal rescue organizations and registered shelters (increased foster capacity).
  • State/state budget: Potential reduction in individual income tax revenues to the extent taxpayers claim the credit (nonrefundable status limits fiscal exposure).

Administrative and timeline notes

  • Tax effect begins for tax years starting Jan 1, 2026.
  • The Michigan Department of Treasury must prescribe verification forms/procedures and apply annual CPI-based adjustments starting with the 2027 tax year.
  • Current status (as of electronic reproduction 09/26/2025): introduced and referred to Committee on Finance.

Example

  • Fostered Dog A for 10 days in 2026 = $50 credit.
  • Fostered Dog B for 65 days in 2026 = $50 (first 7+ days) + $50 (for days 31–60) = $100.
  • Total cannot exceed credits for 5 animals in the tax year; total refundable amount limited to taxpayer’s tax liability (no refund).

Compiled from official sources — confirm details with the bill’s official record.

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