MI HB5874

Allows qualified taxpayers with fewer than 100 full-time employees to claim a tax credit equal to 20% of compensation paid to qualified employees or $3,000 per employee annually, whichever is less, for tax years beginning January 1, 2013.

Unused credits can be carried forward for up to 5 years to offset future tax liability but cannot be refunded.

Qualified employees must have been unemployed for at least 60 days before hire, cannot replace other employees unless the prior employee left voluntarily or for cause, and cannot be relatives or dependents of owners with more than 50% ownership stake.

Compensation includes wages, salaries, bonuses, commissions, pension contributions, and health insurance payments but excludes payments to independent contractors, unemployment insurance, and employer payroll taxes.

Department may reduce, terminate, or claw back a portion of claimed credits if a qualified employee is terminated within 1 year of hire.