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HB 5822

Individual income tax: other; qualified higher education expenses under the Michigan education savings program; include qualified postsecondary credentialing expenses. Amends sec. 2 of 2000 PA 161 (MCL 390.1472).

2025-2026 Regular Session Introduced by Joe Aragona and 5 co-sponsors

Expands Michigan Education Savings Program to cover more postsecondary costs, including apprenticeships, credentialing, and loan repayments, under qualified higher education expens

referred to second reading
#individualincometax:other
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WeVote Research Nonpartisan
Bill Summary · HB 5822

Summary of Bill HB 5822 (Michigan, 2025-2026)

Overview

  • Title: Individual income tax: other; qualified higher education expenses under the Michigan education savings program; include qualified postsecondary credentialing expenses. Amends sec. 2 of 2000 PA 161 (MCL 390.1472).
  • Purpose: Expand the Michigan Education Savings Program (MESP) framework to include qualified postsecondary credentialing expenses and related higher education costs within the program’s eligible distributions, aligning with 529 plan definitions and tax-advantaged treatment.
  • Introduced by: Rep. Phil Green; additional sponsors: Luke Meerman, Matt Bierlein, Tim Kelly, Mike Harris, Joe Aragona.
  • Action to date: Introduced and referred to Committee on Education and Workforce (April 16, 2026).

What the bill does (Key provisions)

  • Definition expansion for qualified higher education expenses (QHEE):

    • The act already defines QHEE consistent with Section 529 of the Internal Revenue Code. HB 5822 adds and codifies:
    • QHEE includes costs for apprenticeship programs (fees, books, supplies, equipment) as per 529(c)(8).
    • Principal and interest on qualified education loans (529(c)(9)).
    • Qualified postsecondary credentialing expenses (529(f)).
    • This broadens the scope of expenses eligible for tax-advantaged withdrawals to cover a wider set of postsecondary outcomes.

  • Incorporation of credentialing and related costs into the Michigan Education Savings Program (MESP):

    • The bill modifies the statutory definitions to ensure that credentialing programs, along with traditional college expenses, fall under both “qualified higher education expenses” and “qualified withdrawal” provisions when paid from an MESP account.
    • Ensures alignment with 529 plan rules for qualified withdrawals to avoid penalties or taxes, provided the withdrawal meets 529 requirements and any Michigan-specific restrictions.

  • Operational and definitional alignments:

    • Maintains existing terms: Account, Account Owner, Designated Beneficiary, Eligible Educational Institution, Program, Program Manager, Senior treasurer, etc.
    • Keeps the structure of the Michigan Education Savings Program Act intact (as amended by 2024 PA 195), while expanding the scope of eligible expenses.

Who would be affected

  • Account owners and designated beneficiaries: Individuals who open and/or fund Michigan education savings accounts (education savings accounts) under the MESP.
  • Qualified educational expenses: Beneficiaries’ costs paid from MESP accounts would include a broader array of eligible expenses, notably:
    • Apprenticeship-related costs
    • Education loan principal and interest
    • Postsecondary credentialing expenses
  • Institutions and programs: Eligible educational institutions (as defined by the 529 framework) and postsecondary credentialing providers would be encompassed, provided their credentials qualify under 529 rules.

Procedural and timeline aspects

  • Next steps: If advanced by the Education and Workforce Committee, the bill would proceed through the usual Michigan legislative process (floor votes in House/Senate, potential amendments, and, if passed, governor’s signature).
  • Effective date: The text provided does not specify an effective date; typically, implementation would align with the act’s effective date if enacted, potentially applying to tax years or disbursements per the program’s rules.
  • References: Builds on 2000 PA 161 (Michigan education savings program act), as amended by 2024 PA 195, and aligns with 529 plan provisions in the Internal Revenue Code.

Impact considerations

  • Tax and financial planning: By including credentialing expenses and loans’ interest/principal as QHEE, more education-related spending could be funded with tax-advantaged savings, potentially reducing out-of-pocket costs for families pursuing nontraditional credentials.
  • Accessibility of postsecondary options: Supports a broader range of postsecondary pathways (including apprenticeships and credentialing), potentially encouraging workforce-aligned education.

If you’d like, I can tailor this into a one-page briefing for policymakers or add a comparison with existing 529/MI tax treatment for quick reference.

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

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