House Bill 4248 would amend Michigan’s Income Tax Act to create a new individual income tax credit for donations made to the endowment fund of a community foundation. Beginning with tax years starting on or after January 1, 2025, a taxpayer could claim a credit equal to 50% of the amount contributed during the year, subject to caps of $100 for most filers, $200 for joint returns, and for resident estates or trusts, the lesser of 10% of pre-credit tax liability or $5,000. To claim the credit, the taxpayer must have a gift acknowledgment from the community foundation showing the contribution was made to its endowment fund.
The bill also limits the credit in several ways. The contribution used to calculate the credit for a resident estate or trust cannot have already been deducted in computing federal taxable income, and any credit amount exceeding the taxpayer’s liability is nonrefundable. The Department of Treasury would be required to report annually to the House and Senate tax committees the total credits claimed in the prior year. The bill defines a qualifying community foundation as one that applies for certification by May 15 and is certified by the department under the Michigan Community Foundation Act, but with a reduced asset threshold of at least $1 million for purposes of this credit.
HB 4248 would affect the state income tax code by adding a new tax expenditure rather than changing tax rates or broad tax brackets. It would reduce income tax liability for eligible donors to community foundation endowments and create an administrative certification and reporting process for the Department of Treasury. The bill’s practical effect would be to provide a modest tax incentive for charitable giving to community foundation endowments, while limiting the fiscal exposure through low per-taxpayer caps and a nonrefundable structure.
The available context shows no recorded committee testimony or votes, so there is no documented debate in the provided materials. Based on the bill text, the measure appears generally supportive of charitable and philanthropic giving, especially to local community foundations, and is likely intended to encourage endowment growth. Because the credit is relatively small and narrowly targeted, the main policy questions are likely to concern whether the tax incentive is an appropriate use of state revenue and whether the lowered $1 million asset threshold broadens eligibility too much or too little.
Impact
HB 4248 would add a new section to the Michigan Income Tax Act creating a nonrefundable individual income tax credit for contributions to community foundation endowment funds. It would apply beginning in tax year 2025, require Treasury certification of eligible community foundations, and impose annual reporting to legislative tax committees. The bill would affect taxpayers who donate to qualifying community foundation endowments, resident estates and trusts, and the Department of Treasury’s administration of the credit.
Sentiment
No committee transcripts or vote history were provided, so there is no direct record of support or opposition in the supplied materials. The bill’s design suggests a generally favorable sentiment toward charitable giving and local philanthropy, with the credit structured to be limited in size and targeted to community foundations. The tie-bar to HB 4247 indicates it is part of a paired legislative package, which often signals coordinated support for a related policy proposal.
Contention
The main potential points of contention are fiscal and definitional. Critics could question whether a tax credit is the best way to encourage donations, given the loss of state revenue, even though the credit is capped and nonrefundable. Another possible issue is the eligibility standard for community foundations: the bill lowers the certification asset threshold to $1 million for purposes of the credit, which may be seen either as a way to help smaller foundations or as an expansion of eligibility beyond the usual standard. The tie-bar to HB 4247 also means the bill’s effectiveness depends on enactment of the companion measure, which could be a procedural point of concern.