Individual income tax: home heating credit; adjustments based on Detroit Consumer Price Index; change to United States Consumer Price Index. Amends sec. 527a of 1967 PA 281 (MCL 206.527a).

2025-2026 Regular Session Introduced by Matt Bierlein and 4 co-sponsors

HB 4543 switches the inflation indices for Michigan's Home Heating Credit: uses U.S. CPI for energy items for max heating cost, and U.S. CPI all items for eligibility resources.

bill ordered enrolled

#individualincometax:homeheatingcredit

HB 4543 — Summary: Change inflation index used for Michigan Home Heating Credit

Sponsor: Rep. Bill G. Schuette (companion: SB 2031)
Subject: Individual income tax — Home Heating Credit inflation adjustment
Introduced: March 12 / June 3, 2025 (filed/introduced)
Status: Passed House (Aug 19, 2025) with immediate effect; referred to Senate Committee on Energy and Environment (Aug 26, 2025)

Purpose

HB 4543 amends section 527a of the Michigan Income Tax Act to change which consumer price index (CPI) is used to make annual inflation adjustments to two Home Heating Credit limits:
- the maximum reimbursable heating costs (the “standard allowance” / maximum cost), and
- the maximum total household resources for eligibility under the credit’s alternative calculation.

The change is proposed because the Detroit metropolitan CPI series for fuels and other utilities was discontinued after December 2024.

Key provisions

Replace references to the all‑urban Detroit CPI for fuels and other utilities with the U.S. Consumer Price Index (CPI) for household energy when adjusting the maximum heating cost reimbursable under the credit.

Replace references to the Detroit CPI for all items with the U.S. CPI for all items when adjusting the maximum total household resources used to determine eligibility under the credit’s alternative method.

Retains existing mechanics for adjustments:

Adjustments are based on the percentage change in the relevant CPI for the 12 months ending August 31 of the tax year being claimed versus the prior 12‑month period.
Only positive changes are applied, and annual increases are capped at 10%.

Existing program operations remain unchanged: Department notification rules, payment by energy draft or negotiable warrant, and treatment of direct vendor payments and prior assistance are retained.

Who is affected

Low‑income Michigan homeowners and renters who claim the Home Heating Credit (eligibility and credit amounts depend on household size/exemptions and total household resources).

Enrolled heating fuel providers (notification and information‑reporting requirements; possible recipients of energy draft payments).

Michigan Department of Treasury and Department of Health & Human Services (administration and vendor payment coordination).

Fiscal and administrative impact

House Fiscal Agency projects a modest, non‑significant revenue impact. Year‑to‑year differences depend on CPI movements; some years the U.S. CPI measures have differed substantially from the discontinued Detroit indices.

The change is primarily technical and administrative to maintain an available, ongoing inflation series for annual adjustments.

Background and legislative history

The Detroit CPI series for fuel/utilities was discontinued after Dec. 2024, prompting the proposed switch to national CPI series.

The bill passed the Michigan House on Aug. 19, 2025 (roll call 88–14) with immediate effect and was transmitted to the Senate and referred to the Committee on Energy and Environment on Aug. 26, 2025.

Testimony in support was provided by the Department of Treasury; the Community Economic Development Association of Michigan indicated support.

If enacted, HB 4543 would not change the structure of the Home Heating Credit itself, only the index used to make the statutorily required annual inflation adjustments.