MI HB5101

Establishes a research and development tax credit for "authorized business" flow-through entities beginning in tax year 2025, with credits claimed against withheld income taxes.

Provides a 3% credit on qualifying R&D expenses up to a base amount and 10% on expenses exceeding the base amount for businesses with 250+ employees, capped at $2,000,000 per year; businesses with fewer than 250 employees receive 3% and 15% rates respectively, capped at $250,000 per year.

Allows an additional 5% credit (up to $200,000 per year) for R&D expenses incurred in collaboration with Michigan research universities under written agreement.

Sets an aggregate annual cap of $100,000,000 across all claimants, with automatic proration procedures if tentative claims exceed this limit, prioritizing smaller businesses for up to $25,000,000 of available credits.

Requires employers to submit tentative claims by April 1, 2026 for 2025 expenses and by March 15 annually thereafter; credits are refundable if they exceed tax liability and cannot be assigned or transferred.