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SB 1045

Individual income tax: property tax credit; owner and eligibility of a homestead placed in certain trusts; clarify. Amends sec. 510 of 1967 PA 281 (MCL 206.510).

2025-2026 Regular Session Introduced by Thomas Albert and 14 co-sponsors

SB 1045 broadens homestead tax eligibility by recognizing revocable trusts and QPRTs as valid owners for the Michigan homestead credit, expanding who qualifies.

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Bill Summary · SB 1045

Summary of SB 1045 (Session 2025-2026) – Michigan

Purpose and intent

SB 1045 proposes amendments to the Michigan Income Tax Act (1967 PA 281), specifically to section 510, to clarify definitions related to income and to expand who is considered an “owner” of a homestead for purposes of the state income tax credit and related eligibility. The bill appears aimed at aligning tax treatment with certain ownership arrangements (including trusts) and providing clearer scope for homestead-related tax considerations.

Key provisions and changes

  • Definition of Income (sec. 510(1))
    • Maintains the general definition of “income” as federal adjusted gross income (AGI) plus income exempt from federal AGI computations.
    • Adds a specific deduction for premiums paid by an individual for an accident or health insurance plan that covers the individual’s family.
    • Retains and enumerates several exclusions from “income,” including:
    • The first $300 of cash/kind gifts from nongovernmental sources.
    • The first $300 of certain gambling winnings.
    • Surplus foods.
    • Government-provided relief in kind.
    • Payments or credits under the Michigan Income Tax Act.
    • Government grants used for rehabilitation of the claimant’s homestead.
    • Stipends for certain roles (foster grandparent or senior companion) under specified programs.
    • Medicare premium deductions from Social Security or Railroad Retirement benefits.
    • Employer contributions to life, accident, or health insurance plans.
    • Energy assistance grants and energy assistance tax credits.

Note: The text includes an explicit allowance for deducting health-insurance premiums for the individual’s family, which is presented as part of the income definition adjustments.

  • Definition of Owner (sec. 510(2))
    • Expands or clarifies who qualifies as an “owner” of a homestead for purposes of the statute. The bill lists several scenarios:
    • A natural person who owns or is purchasing a homestead under a mortgage or land contract.
    • A natural person who owns or is purchasing a dwelling situated on lands leased by another.
    • A tenant-stockholder of a cooperative housing corporation.
    • A grantor who has placed the homestead in a revocable trust or a qualified personal residence trust (QPRT).

This section broadens recognition of ownership arrangements, including trust-based ownership (revocable trusts and QPRTs), as valid for eligibility considerations.

Who is affected

  • Michigan individual taxpayers who claim the state income tax credit related to homesteads, particularly those with non-traditional ownership arrangements such as:
    • Homes financed by mortgages or land contracts.
    • Dwellings on leased land.
    • Cooperative housing ownership structures.
    • Trusts (revocable trusts or QPRTs) where the homestead is placed in trust by the owner.
  • Taxpayers who pay health insurance premiums for themselves and their families (as those premiums may be treated favorable under the income calculation).

Procedural and timeline aspects

  • Introduced by: Senator Kevin Daley
  • Date introduced: June 18, 2026
  • Committee assignment: Referred to the Senate Committee on Finance, Insurance, and Consumer Protection
  • The bill is at the committee phase; no further amendments, votes, or enactment dates are provided in the available text.

Potential impact

  • For taxpayers with trusts or non-traditional ownership structures, SB 1045 could simplify or broaden eligibility by recognizing revocable trusts and QPRTs as valid owners for homestead-related tax considerations.
  • The clarified income exclusions and the added deduction for health-insurance premiums may affect the calculation of taxable income for families, potentially reducing tax liability for some individuals.
  • The changes may necessitate adjustments to how taxpayers report ownership arrangements on Michigan tax filings, and how tax software handles homestead-related deductions and ownership definitions.

If you’d like, I can provide a side-by-side comparison with current statute language, or outline potential administrative questions (e.g., documentation required to prove revocable trust or QPRT ownership).

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

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