HB 5640 Summary

• Amends the Income Tax Act of 1967 to modify taxable income calculations and personal exemptions, effective for tax years beginning after December 31, 2011.

• Adds a $600 child dependent deduction per child under age 19 and restores a $3,700 personal exemption that had been subject to phase-out limitations based on household resources.

• Creates a new tuition and fees tax credit (Section 274) allowing residents with adjusted gross income of $200,000 or less to claim 8% of tuition and fees paid to qualified Michigan institutions of higher learning, capped at $375 per student per year for up to 4 years.

• Modifies property tax credit eligibility thresholds in Sections 520 and 522, increasing the total household resources threshold from $41,000 to $73,650 for credit reduction calculations.

• Removes previous income restrictions and age-based limitations on retirement and pension benefit deductions, and eliminates restrictions on interest and dividend deductions for senior citizens.