October 04, 2023, Introduced by Senators LINDSEY, DALEY, RUNESTAD, MCBROOM and THEIS and referred to the Committee on Finance, Insurance, and Consumer Protection.

A bill to amend 1967 PA 281, entitled

"Income tax act of 1967,"

(MCL 206.1 to 206.847) by adding section 281.

the people of the state of michigan enact:

Sec. 281. (1) For tax years that begin on and after January 1, 2024, a taxpayer may claim a credit against the tax imposed by this part in an amount equal to the target foundation allowance as specified in section 20(1) of the state school aid act of 1979, 1979 PA 94, MCL 388.1620, for the school year that ends during the tax year in which the credit is claimed for each qualified dependent of the taxpayer for which an exemption was claimed under section 30(2)(b) for that same tax year. The department may require reasonable proof from the taxpayer demonstrating that the dependent is a qualified dependent.

(2) If the credit allowed under this section exceeds the tax liability of the taxpayer for the tax year, that portion of the credit that exceeds the tax liability shall be refunded.

(3) As used in this section:

(a) "Public school" means that term as defined in section 5 of the revised school code, 1976 PA 451, MCL 380.5.

(b) "Qualified dependent" means a dependent who satisfies all of the following:

(i) Is at least 5 years of age but younger than 19 years of age on the last day of the tax year for which the credit is claimed.

(ii) Is not enrolled in a public school for the school year that ends during the tax year in which the credit is claimed.

(iii) Has demonstrated a proficiency for the dependent's appropriate grade level in reading and math. For purposes of this subparagraph, proficiency may be measured utilizing performance on state or private assessments, exams, or other testing mechanisms.