HB 5966 Summary

• Amends the Michigan Income Tax Act to add deductions for contributions to and qualified withdrawals from home ownership savings accounts, effective for tax years beginning after December 31, 2009.

• Allows taxpayers to deduct up to $10,000 annually ($20,000 for joint returns) in net contributions to home ownership savings accounts, calculated as contributions made minus qualified withdrawals in the tax year.

• Permits deduction of interest earned on home ownership savings account contributions and allows deduction of qualified withdrawals used for eligible home purchases or qualified home ownership expenses.

• Requires taxpayers to add back to taxable income non-qualified withdrawals from home ownership savings accounts that exceed the total amount previously deducted under the home ownership savings program.

• Bill effectiveness is conditioned on enactment of House Bill 5965, establishing a tie-bar requirement between the two bills.