Individual income tax: property tax credit; credit percentages; modify. Amends secs. 508, 510 & 522 of 1967 PA 281 (MCL 206.508 et seq.). TIE BAR WITH: SB 345'25
SB 344 would amend Michigan’s Income Tax Act to change the state homestead property tax credit, often referred to as the “circuit breaker” credit. The bill lowers the income threshold percentages used to determine the credit for both general claimants and certain senior, disabled, veteran, and blind claimants, with the new rates generally taking effect for tax years beginning on or after January 1, 2025. It also updates related definitions and cross-references in the sections governing gross rent, homestead, income, household resources, and owner eligibility.
For non-senior claimants, the bill reduces the share of household resources used in the credit formula from 3.5% to 3.2% for earlier years and from 3.2% to 3.0% for 2025 and later tax years. Similar reductions are made in the senior citizen credit schedule and in the formulas for eligible servicepersons, veterans, widows or widowers, and blind claimants. The bill also preserves existing exclusions from income and household resources, including certain benefits, grants, and reimbursements, while clarifying some wording to use “individual” instead of “person” in several places.
The bill’s practical effect would be to increase property tax relief for qualifying homeowners and renters by making the credit more generous, especially for taxpayers whose property taxes exceed a smaller percentage of household resources. Because the credit is applied against state income tax liability, the measure would likely reduce state revenue to the extent more taxpayers qualify for larger credits. The bill applies only if Senate Bill 345 is also enacted, indicating the package is tied together and intended to operate as a coordinated tax policy change.
Overall sentiment appears neutral to favorable toward expanding tax relief, but the available record does not include committee testimony or recorded votes. The bill’s structure suggests a policy goal of easing property tax burdens for lower- and moderate-income households, seniors, and other protected groups. No direct opposition is documented in the provided materials, though any fiscal impact on state revenues and the choice to tie the bill to SB 345 could be points of legislative concern.
Notable points of contention, based on the text alone, would likely center on the size of the credit increase, the resulting state revenue loss, and whether the revised thresholds are targeted appropriately. The bill also contains a tie-bar provision, meaning it cannot take effect unless SB 345 becomes law, which may reflect negotiation or dependency between related tax measures.
SB 344 would amend MCL 206.508, 206.510, and 206.522 of the Income Tax Act of 1967 to revise the calculation of Michigan’s homestead property tax credit. It lowers the percentage-of-income thresholds used in the credit formula for general claimants and for senior, disabled, veteran, widow/widower, and blind claimants, thereby increasing the credit amount for eligible taxpayers beginning with tax years on or after January 1, 2025. The bill also makes conforming wording changes in the statutory definitions of gross rent, homestead, income, household, total household resources, and owner.
The available record shows no committee transcripts and no recorded votes, so there is no documented floor or committee debate to assess directly. Based on the bill text and caption, the measure appears to be a tax-relief proposal intended to reduce property tax burdens for qualifying residents, which suggests generally favorable policy intent. The tie-bar to SB 345 indicates it is part of a broader legislative package rather than a standalone change.
The main likely points of contention are fiscal and policy-related: lowering the income-share thresholds would increase the size of the homestead property tax credit and could reduce state income tax revenue. Legislators could also disagree over whether the new percentages and eligibility structure are the right way to target relief to seniors, renters, homeowners, veterans, disabled taxpayers, and blind claimants. The tie-bar requirement with SB 345 is another potential issue because it makes the bill dependent on enactment of a separate measure.