MI HB4056

Creates a child care savings program allowing individuals to open tax-advantaged savings accounts at financial institutions starting January 1, 2026 to pay for child care expenses

Contributions and interest earned on child care savings accounts are exempt from state income tax, as are qualified withdrawals used for eligible child care costs

Eligible costs include care and supervision expenses for dependents under age 14 that enable the account holder to work, attend training programs, or search for employment

Imposes a 10% penalty on withdrawals not used for eligible child care expenses, with exceptions for death, bankruptcy, account transfers, or hardship withdrawals

Account holders must submit account statements, Form 1099, and receipts documenting eligible expenses with their income tax returns and maintain records for at least 4 years