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HB 4747

Individual income tax: deductions; deduction for contributions made to any 529 education savings plan; provide for. Amends sec. 30 of 1967 PA 281 (MCL 206.30).

2025-2026 Regular Session Introduced by Mark Tisdel

HB 4747 expands Michigan tax deductions to out-of-state 529 and 529A accounts, allowing up to $5,000 per return or $10,000 joint per type, effective 2026.

REFERRED TO COMMITTEE ON FINANCE, INSURANCE, AND CONSUMER PROTECTION
#highereducation:tuition #individualincometax:deductions
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Bill Summary · HB 4747

HB 4747 — Summary (Rep. Mark Tisdel)

Purpose / intent

HB 4747 amends Michigan’s Income Tax Act (MCL 206.30) to provide “tax parity” for college and ABLE savings accounts by allowing individual taxpayers to deduct contributions to out‑of‑state 529 qualified tuition programs and 529A (ABLE) programs on their Michigan individual income tax returns, similar to the existing deduction for Michigan‑based Mi 529 and MiABLE accounts.

Key provisions

  • Adds a deduction (to the extent included in federal adjusted gross income) for contributions made to:
    • Any qualified tuition program under IRC §529 established/maintained by another state or agency, and
    • Any qualified ABLE program under IRC §529A established/maintained by another state or agency.
  • Deduction limit: up to $5,000 per year on a single return or $10,000 per year on a joint return for each type of account (529 and 529A), consistent with current Michigan caps for Michigan accounts.
  • Amounts deducted are reduced by distributions from the account that are not subject to an excise or penalty tax.
  • Non‑qualified withdrawals that were subject to a penalty/excise tax under the §529 or §529A program added back to Michigan taxable income — except where the withdrawals are less than the sum of prior contributions for which no deduction was previously claimed (consistent with current treatment for Michigan accounts).
  • Effective date language in analysis: the deduction expansion would apply beginning January 1, 2026 (per House Fiscal Agency analysis).

Who is affected

  • Individual Michigan taxpayers who contribute to out‑of‑state 529 college savings plans or out‑of‑state ABLE accounts.
  • Michigan residents who already use Michigan’s Mi 529 and MiABLE programs see no change; the bill expands eligibility to similar out‑of‑state plans.
  • State finances: impacts General Fund and School Aid Fund.

Fiscal impact

  • House Fiscal Agency estimates reduced state income tax revenue of approximately $5.0 million to $10.0 million annually.
  • If the revenue reduction occurs through lower gross income tax collections (withholding, estimated payments, annual payments), the School Aid Fund would absorb about 23.8% of the impact; otherwise (if via higher refunds), the General Fund would bear the cost.

Legislative status & timeline (select highlights)

  • Introduced / filed: March 13, 2025; formally introduced July 29, 2025 by Rep. Mark Tisdel.
  • Committee activity: Referred to House Finance; reported by committee (recommendation without amendment) Sept. 16, 2025.
  • House action: Substitute (H‑1) adopted; passed House with immediate effect Oct. 21, 2025 (Roll Call #255 — Yeas 72, Nays 32).
  • After House passage: Referred to Committee on Finance, Insurance, and Consumer Protection.

Positions noted in record

  • Support: Securities Industry and Financial Markets Association (testified 9‑9‑25).
  • Opposition: Michigan Department of Treasury (testified 9‑16‑25).

Sources: House Fiscal Agency analyses and bill text (amends MCL 206.30).

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

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