MI HB5420

Updates Internal Revenue Code reference date from January 1, 1996 to January 1, 2018 in sections 12 and 607 to align Michigan income tax law with current federal tax code.

Increases personal and dependency exemption amounts in section 30a, escalating from $3,950.00 (October 1, 2012 - December 31, 2013) to $4,800.00 annually (2020 tax year and thereafter), with intermediate amounts for intervening years.

Adds income tax rate reduction mechanism for 2023 and later tax years in section 51, allowing the 4.25% rate to be reduced if general fund revenue exceeds inflation rates, calculated using a specific formula comparing revenue growth to capped revenue levels.

Modifies education savings account and ABLE account provisions in section 30 to clarify deduction requirements, including provisions for non-qualified withdrawals and interest earned on contributions.

Repeals sections 30e and 30f and makes changes to section 52 regarding dependent exemptions, contingent on simultaneous enactment of HB 5421 and HB 5422.