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HB 4387

Individual income tax: credit; credit for qualified expenditures attributable to supplies, repairs, and restoration after a declared state of emergency. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 282.

2025-2026 Regular Session Introduced by Brian BeGole and 11 co-sponsors

HB 4387 creates a one-year refundable Michigan tax credit up to $5,000 per taxpayer for storm-related, unreimbursed 2025 expenses in designated disaster counties.

referred to second reading
#individualincometax:credit
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WeVote Research Nonpartisan
Bill Summary · HB 4387

HB 4387 — Disaster Expenses Tax Credit (2025)

Summary / Purpose

HB 4387 would add Section 282 to the Michigan Income Tax Act to create a one‑year, refundable individual income tax credit to help residents and businesses in counties covered by the March–April 2025 state of emergency recover from the severe winter weather and ice storm that began March 28, 2025. The credit is intended to offset out‑of‑pocket cleanup, repair, restoration, or rebuilding costs incurred in the 2025 tax year.

Key provisions

  • Credit amount: equal to the taxpayer’s qualified expenses for 2025, capped at $5,000 per taxpayer.
  • Refundable: any credit amount exceeding tax liability is refundable.
  • One‑year application: applies only to the 2025 tax year.
  • Expense eligibility: “Qualified expenses” are those directly attributable to the storm impacts (widespread power outages, impassable roads, loss of telephone/cellular service, and damage to homes/property/businesses). Examples explicitly listed include purchases of generators, chainsaws, and building materials.
  • Exclusions: expenses reimbursed to or paid for a taxpayer by any other source are not eligible. (Substitute H‑1 clarifies this exclusion.)
  • Flow‑through entities: members of qualifying flow‑through entities may claim the credit based on their distributive share of business income or by an alternative method approved by the Department of Treasury.

Eligibility / Definitions

  • Qualified declaration: the governor’s state of emergency declared March 31, 2025 and updated April 2, 2025, under the Emergency Management Act for the winter/ice storm beginning March 28, 2025.
  • Qualified taxpayer: a resident of a county included in the emergency area. Counties listed include Alcona, Alpena, Antrim, Charlevoix, Cheboygan, Crawford, Emmet, Montmorency, Oscoda, Otsego, Presque Isle (Lower Peninsula) and Mackinac (Upper Peninsula).

Claiming & documentation

  • Claim requires reasonable proof on a Department of Treasury form. Minimum required information: taxpayer’s FEIN or Michigan treasury number, address within the emergency area, and a description of how the taxpayer was affected by the storm. The Treasury Department will administer verification and may approve alternative methods for flow‑through entity members.

Fiscal & policy considerations

  • Fiscal impact: a one‑time reduction in individual income tax revenue; amount indeterminate but likely significant. Refunds would be paid from the general fund.
  • Administrative/verification concerns: analysts noted potential challenges for the Department of Treasury in verifying eligibility and distinguishing reimbursed versus out‑of‑pocket expenses.

Legislative status & timeline

  • Filed: March 11, 2025 (filed); introduced in the House April 24, 2025 (Rep. John R. Roth).
  • Committee action: reported with substitute (H‑1) by Finance Committee on May 13, 2025.
  • Current status: Referred to second reading (as of May 13, 2025).

Related bill

  • Companion: SB 1957.

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

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