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HB 4487

Individual income tax: credit; working parent tax credit for certain dependents; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 272b.

2025-2026 Regular Session Introduced by Kelly Breen and 29 co-sponsors

HB 4487 creates a refundable Michigan tax credit of $2,500 per qualifying dependent aged 4–6, up to 3 dependents, for earners over $10,000.

bill electronically reproduced 05/08/2025
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Bill Summary · HB 4487

Summary — HB 4487 (Introduced 2025)

Purpose

HB 4487 creates a new, refundable Michigan individual income tax credit — the "working parent tax credit for certain dependents" — aimed at helping working taxpayers with young children. The credit is intended to lower tax burdens and provide direct cash support to families with dependents ages 4–6.

Key provisions

  • Adds section 272b to the Income Tax Act (1967 PA 281, MCL 206.1–206.847).
  • For tax years beginning on or after January 1, 2025, a qualified taxpayer may claim:
    • A credit of $2,500.00 for each qualified dependent who is at least 4 but not more than 6 years old on the last day of the tax year and for whom an exemption was claimed under MCL 206.30(2)(b) in that year.
    • A taxpayer may claim the credit for up to 3 qualified dependents per tax year (maximum credit $7,500).
  • The credit is refundable: if the credit exceeds the taxpayer’s tax liability, the excess must be refunded.
  • Definitions:
    • “Earned income” adopts the definition in IRC §32.
    • “Qualifying child” adopts the definition in IRC §152.
    • “Qualified dependent” means a dependent who is a qualifying child.
    • “Qualified taxpayer” means a taxpayer with earned income of at least $10,000 for the tax year.

Who is affected / likely impact

  • Primary beneficiaries: working Michigan taxpayers with earned income ≥ $10,000 who claim a dependent aged 4–6 and claim the state dependent exemption under MCL 206.30(2)(b).
  • The credit is targeted to families with preschool/early-elementary-aged children and is refundable, so lower-income taxpayers with limited tax liability can receive cash payments.
  • Fiscal effect: would reduce individual income tax revenues (amounts depend on take-up); creates a per-dependent $2,500 benefit (capped at 3 dependents).
  • Exclusions/limits: taxpayers with earned income below $10,000 cannot claim the credit; dependents outside the 4–6 age range are ineligible.

Procedural / timeline status

  • Filed: March 12, 2025 (introduced by Rep. Cynthia Neeley).
  • Referred to committee; reported favorably without amendment after hearings.
  • Committee: Trade, Workforce & Economic Development / later referred to Committee on Economic Competitiveness.
  • Placed on General State Calendar and electronically reproduced May 8, 2025.
  • Companion bill: SB 591.

Notes

  • The credit relies on federal definitions (IRC §§32 and 152) for earned income and qualifying child status and requires the taxpayer to claim the corresponding state exemption in the same tax year.

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

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