HOUSE BILL NO. 5293

A bill to amend 1967 PA 281, entitled

"Income tax act of 1967,"

(MCL 206.1 to 206.847) by adding section 714.

the people of the state of michigan enact:

Sec. 714. (1) Subject to the limitations under this section, for tax years beginning on and after January 1, 2026 and before January 1, 2036, an employer that creates a qualified new job may claim a credit in an amount equal to 50% of the amount of income tax withheld under this chapter that is attributable to each qualified new job against the taxes required to be withheld and remitted to this state under this chapter.

(2) To be eligible for a credit under this section, an employer must submit, in a form and manner as prescribed by the department, a tentative claim for which a credit under this section is sought to the department on or before March 15 after the calendar year ending with or within the tax year for which the employer intends to submit a claim for the credit. The tentative claim must include, at a minimum, the total number of full-time jobs maintained by the employer during the calendar year and the number of qualified new jobs for which a credit is being claimed for that same calendar year. The department shall review all tentative claims submitted under this section and if the amount of tentative claims submitted exceeds the maximum amount allowed under subsection (3), the department shall publish a notice on its website notifying claimants of the adjustment to the tentative claims for that calendar year as required under subsection (3).

(3) The aggregate amount of credits allowed to be claimed by all employers under this section in a single calendar year must not exceed $50,000,000.00. To the extent the department receives tentative claims for credits from small employers in excess of $10,000,000.00, not less than $10,000,000.00 of the $50,000,000.00 each calendar year must be approved for those small employers. To the extent the department receives tentative claims for credits from medium employers in excess of $15,000,000.00, not less than $15,000,000.00 of the $50,000,000.00 each calendar year must be approved for those medium employers. To the extent the department receives tentative claims for credits from large employers in excess of $25,000,000.00, not less than $25,000,000.00 of the $50,000,000.00 each calendar year must be approved for those large employers. If the aggregate amount of tentative claims submitted under this section for small employers, medium employers, or large employers exceeds the respective cap for any of those employers, the amount of the tentative claims submitted must be prorated so that each claimant's allowed credits equal that claimant's pro rata share of the maximum amount of credits allowed to be claimed in that claimant's respective category.

(4) If an employer is also a taxpayer that is not eligible to claim a credit under section 670 because that taxpayer failed to maintain at least 95% of the full-time jobs that the taxpayer had in this state on September 30, 2025 as required under section 670 during any tax year, then that employer is also not eligible to claim a credit under this section for that first tax year that the taxpayer failed to satisfy that 95% requirement.

(5) A member of a flow-through entity that submits a claim for a credit under this section is not allowed to claim any portion of that credit. An employer shall not assign or transfer all or any portion of a credit allowed under this section. A credit or any portion of a credit allowed under this section is not assignable or transferable either by agreement or by operation of law.

(6) An employer shall, in a form and manner as prescribed by the department, file a claim for a credit under this section with the annual return required under section 711 for the tax year in which a tentative claim for a credit under this section is submitted. The credits allowed under this section must be claimed after all allowable nonrefundable credits under this act. If the amount of the credit allowed under this section for the tax year and any unused carryforward of the credit allowed under this section exceeds the tax liability of the employer for the tax year, that portion of the credit that exceeds the tax liability must not be refunded, but may be carried forward as an offset in subsequent tax years for 3 tax years or until the excess credit is used up, whichever occurs first.

(7) As used in this section:

(a) "Facility" means a site or sites within this state in which an employer creates qualified new jobs.

(b) "Full-time job" means a job performed for 35 hours or more each week by an individual whose income and Social Security taxes are withheld by 1 or more of the following:

(i) The employer.

(ii) An employee leasing company.

(iii) A professional employer organization on behalf of the employer.

(c) "Large employer" means an employer that has 1,000 or more full-time employees.

(d) "Medium employer" means an employer that has 100 or more full-time employees but less than 1,000 full-time employees.

(e) "Prosperity region" means each of the 10 prosperity regions identified by the department of technology, management, and budget on August 25, 2017.

(f) "Prosperity region median wage" means the median annual wage for the prosperity region where the facility is located based on the most recent data made available by the Michigan bureau of labor market information and strategic initiatives.

(g) "Qualified new job" means a permanent, full-time job created by an employer at a facility in this state that is in excess of the permanent, full-time jobs that the employer had employed in this state as of September 30, 2025 and that pays an annual wage that is equal to 150% or more of the prosperity region median wage.

(h) "Small employer" means an employer that has less than 100 full-time employees.

Enacting section 1. This amendatory act does not take effect unless House Bill No. 5292 (request no. H05251'25) of the 103rd Legislature is enacted into law.