MI HB5025

Allows the Michigan Department of Treasury to intercept valid tax refunds to satisfy taxpayer liabilities, applying refunds in order of priority: state tax liabilities, state non-tax liabilities, support liabilities, court orders, city income tax liabilities, federal levies, and unemployment insurance overpayments.

Requires the department to allocate refunds between joint taxpayers according to each spouse's share and their respective liabilities, with priority given to offsetting the obligated spouse's debts.

Establishes a 30-day window for nonobligated spouses to file an allocation form claiming their share of a refund after receiving notice that a joint return's refund will be intercepted.

Specifies allocation rules for joint tax returns, including provisions for deductions, income attribution, exemptions, business adjustments, and homestead property tax credits based on ownership and income.

Imposes penalties of $25 or 25% of the excessive refund claim (whichever is greater) for knowingly making false statements on nonobligated spouse allocation forms.