Michigan House Bill HB5293

Michigan 2025-2026 Regular Session

• Introduced: 11/13/25
• Refer: 11/13/25

Caption

Individual income tax: credit; payroll withholding credit; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 714. TIE BAR WITH: HB 5292'25

Impact

The bill sets an aggregate cap of $50 million on the total credits that can be claimed each calendar year. Of this cap, specific allocations are designated for small employers (minimum $10 million), medium employers (minimum $15 million), and large employers (minimum $25 million). This tiered allocation is designed to ensure that smaller companies do not miss out on the financial benefits of the credit, thus promoting a balanced economic growth strategy across various employer sizes. The bill's provisions may encourage companies to invest in job creation, thus potentially augmenting Michigan's employment rates and economic outlook.

Summary

House Bill 5293 aims to amend the Income Tax Act of 1967 by introducing a payroll withholding credit for employers that create 'qualified new jobs' in Michigan. Eligible employers can claim a credit equal to 50% of the income tax withheld for each new job created, provided these jobs meet specific wage criteria. This initiative is set to commence for tax years starting from January 1, 2026, through January 1, 2036. The legislation intends to stimulate job growth by incentivizing businesses to expand their workforce permanently beyond existing employee levels.

Contention

Despite the optimistic intentions behind HB 5293, there are areas of contention, particularly concerning the potential limitations of the credits. Some legislative voices have raised concerns over the requirement that employers maintain a certain number of their existing full-time jobs to qualify for the new credit. Additionally, critics may question whether this measure effectively addresses the complex challenges of job creation or if it merely shifts fiscal burdens to taxpayers. Moreover, there are apprehensions regarding the long-term implications of regulatory changes that could ensue from this incentivization, potentially leading to an over-reliance on tax credits over sustainable business practices.