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SB 1000

Individual income tax: other; definition of internal revenue code under the MiABLE program; update. Amends sec. 2 of 2015 PA 160 (MCL 206.982).

2023-2024 Regular Session Introduced by Rosemary Bayer and 2 co-sponsors

Updates MiABLE law to use IRC as of Jan 1, 2024, aligning Michigan ABLE rules with federal ABLE changes while preserving the option to apply the current-year IRC.

referred to Committee on Families, Children and Seniors
#individualincometax:other
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Bill Summary · SB 1000

SB 1000 — MiABLE program: update definition of “internal revenue code” (MCL 206.982)

Status: Referred to Committee on Families, Children and Seniors (Introduced Jan 29, 2025)
Primary sponsor: Sen. Rosemary Bayer (Senate version originally reported Oct–Dec 2024)
Related bills: SB 1001, SB 1002 (package updating related education/529 statutes)

Purpose / Intent

To update the federal Internal Revenue Code (IRC) reference used by the Michigan Achieving a Better Life Experience (MiABLE) Program Act so state law reflects more recent federal changes governing ABLE accounts and related federal tax rules.

Key provision

  • Amends section 2 of 2015 PA 160 (MCL 206.982) to change the statutory definition of “internal revenue code” as used in the MiABLE Act:
    • Current law: “Internal revenue code” = U.S. Internal Revenue Code of 1986 in effect on January 1, 2015, or, at the option of the taxpayer, in effect for the current year.
    • Under SB 1000: updates that fixed date to January 1, 2024 (i.e., IRC of 1986 in effect on Jan 1, 2024), while retaining the taxpayer option to use the IRC in effect for the current year.
  • Also updates cross‑references to the Michigan Income Tax Act (PA 281 of 1967) where applicable.

Who is affected

  • Primary: ABLE account owners and designated beneficiaries (individuals with disabilities) whose accounts and distributions are governed by section 529A of the federal IRC.
  • Secondary: Program administrators, the Department of Treasury (state treasurer), program managers, and tax preparers who apply federal rules to Michigan ABLE accounts.
  • Effectively aligns state program rules and tax treatment with federal ABLE account regulations in effect through 2024 (and allows taxpayers to adopt the current-year IRC where beneficial).

Impact and rationale

  • Fiscal impact: Nonpartisan analyses indicate no direct fiscal effect on state or local revenue/expenditures; changes are technical/substantive legal updates to conform to federal law.
  • Practical effect: Removes potential mismatches between state law and updated federal ABLE provisions (for example, changes to contribution limits, rollovers, qualified expenses, and tax treatment promulgated in or before 2024), reducing confusion and ensuring consistent tax treatment for Michigan ABLE accounts.
  • Retaining the “taxpayer option” to use the IRC in effect for the current year preserves flexibility for account holders and tax planning.

Procedural / timeline notes

  • The bill amends a single definitional provision (MCL 206.982). No effective date is included in the text provided; if enacted, standard provisions for effective dates in the statute or bill would apply.
  • SB 1000 is part of a package (SB 1000–1002) updating federal‑code references across several Michigan savings programs to conform with recent federal statutory changes.

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

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