House Bill 5786 Summary

• Allows taxpayers to claim a 20% income tax credit against qualified investments of at least $20,000 made after December 31, 2016 in eligible early-stage businesses.

• Requires Michigan Strategic Fund certification within 60 days of investment; credits limited to $200,000 per business per year and $200,000 total per taxpayer annually, with credits taken in equal installments over 2 years.

• Qualified businesses must be seed or early-stage companies with headquarters in Michigan, fewer than 100 employees, pre-investment valuations under $10 million, and have existed less than 5 years (or 10 years if derived from higher education or 501(c)(3) research).

• Excludes retail businesses, prohibits investments with family members or where investor has fiduciary relationships, and bars taxpayers with unpaid state tax liabilities or active bankruptcy proceedings from claiming the credit.

• Establishes a $6,000,000 statewide credit cap and $1,000,000 limit per business; unused credits may carry forward up to 5 years and cannot be refunded.