Individual income tax: credit; credit for qualified expenditures attributable to supplies, repairs, and restoration after a declared state of emergency. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 282.
Summary
HB4387 would add a new, temporary individual income tax credit for the 2025 tax year for Michigan taxpayers affected by the severe winter weather and ice storm that began on March 28, 2025. Eligible taxpayers could claim a credit equal to qualified expenses incurred to clean up, repair, restore, or rebuild a home, property, or business in the declared emergency area, capped at $5,000. The credit would be refundable if it exceeds the taxpayer’s liability.
The bill defines qualified expenses broadly to include costs tied to storm-related damage and disruption, such as generators, chainsaws, and building materials, as well as expenses related to widespread power outages, impassable roads, and loss of telephone and cellular service. It also allows members of flow-through entities to claim the credit based on their distributive share of business income or another method approved by the Department of Treasury. Taxpayers would need to provide documentation showing their address in the emergency area and how they were affected by the storm.
Impact
HB4387 would amend the Michigan Income Tax Act of 1967 by adding a new Section 282, creating a one-year refundable tax credit for residents of counties included in the governor’s declared emergency area. The bill would affect individual taxpayers and certain business owners operating through flow-through entities, and it would require the Department of Treasury to administer the credit and verify claims. Because the credit is refundable, it could reduce state revenue beyond a taxpayer’s liability and function as direct financial relief for storm recovery costs.
Sentiment
The available voting history suggests strong support for the bill, as it was reported from committee with a 14-0 vote and a recommendation with substitute H-1. No committee transcript is available, but the unanimous committee vote indicates broad agreement on providing targeted tax relief to people and businesses harmed by the winter storm and ice accumulation. The bill’s framing as disaster recovery assistance likely contributed to the favorable reception.
Contention
There is little visible contention in the available record, but the main policy questions implied by the bill are the scope and administration of the credit. Those issues include which counties qualify as part of the emergency area, what expenses count as directly attributable to the storm, how taxpayers prove eligibility, and how the Department of Treasury will handle flow-through entity claims and alternative allocation methods. The $5,000 cap and refundable nature of the credit could also raise fiscal concerns, though no explicit opposition appears in the provided materials.
Individual income tax: credit; credit for expenditures by school teachers and administrators for school supplies; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 285.