Bill Text: MI HB6070 | 2021-2022 | 101st Legislature | Introduced
Bill Title: Individual income tax: credit; incentive for employers to offer paid adoption leave to certain employees; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 715.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2022-10-11 - Assigned Pa 207'22 With Immediate Effect [HB6070 Detail]
Download: Michigan-2021-HB6070-Introduced.html
HOUSE BILL NO. 6070
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
(MCL 206.1 to 206.847) by adding sections 277 and 678.
the people of the state of michigan enact:
Sec. 277. (1) Subject to the limitations under this section, for tax years beginning on and after January 1, 2023, a qualified taxpayer that voluntarily provides paid adoption leave to its employees may claim a credit against the tax imposed by this part in an amount equal to 50% of the amount of wages paid during the tax year to each qualifying employee during any period in which the qualifying employee is on adoption leave or $4,000.00, whichever is less. The maximum amount of leave with respect to any qualifying employee for which a credit may be claimed under this section must not exceed 12 weeks. Any adoption leave that is paid by this state or a political subdivision of this state or that is required to be paid by law must not be included in determining the amount of the credit under this section for wages paid to a qualifying employee for adoption leave.
(2) For a qualified taxpayer who is a member of a flow-through entity that voluntarily provides paid adoption leave to its employees, that qualified taxpayer may claim credit against the member's tax liability under this part based on the member's distributive share of business income reported from that flow-through entity or an alternative method approved by the department.
(3) The credit allowed under this section with respect to any qualified employee for the tax year must not exceed an amount equal to the product of the normal hourly wage rate of that qualified employee each hour for actual services performed for the employer and the number of hours for which adoption leave is taken. For a qualified employee who is not paid an hourly wage, that qualified employee's wages must be prorated to an hourly wage rate as prescribed by the department.
(4) If the amount of the credit allowed under this section for the tax year and any unused carryforward of the credit allowed by this section exceed the qualified taxpayer's tax liability for the tax year, that portion that exceeds the tax liability for the tax year shall not be refunded but may be carried forward to offset tax liability in subsequent tax years for 5 years or until used up, whichever occurs first.
(5) As used in this section:
(a) "Adoption leave" means a period of absence related to the adoption of a child by the employee to provide time for bonding and adjustments immediately after placement of that child with the employee.
(b) "Qualified employee" means an individual who has been employed by the employer for at least 1 year, and for the preceding year had compensation that does not exceed 60% of the amount applicable for highly compensated employees under section 414(q)(1)(B) of the internal revenue code for that same year.
(c) "Qualified taxpayer" means a taxpayer that is an employer who has a written policy offering adoption leave that satisfies both of the following:
(i) Provides at least 2 weeks of paid adoption leave for each full-time qualifying employee and a proportionate amount of adoption leave for each part-time qualifying employee.
(ii) The rate of payment for adoption leave is not less than 50% of the wages normally paid to that same employee for services performed for the employer.
(d) "Wages" means that term as defined in section 3306(b) of the internal revenue code.
Sec. 678. (1) Subject to the limitations under this section, for tax years beginning on and after January 1, 2023, a qualified taxpayer that voluntarily provides paid adoption leave to its employees may claim a credit against the tax imposed by this part in an amount equal to 50% of the amount of wages paid during the tax year to each qualifying employee during any period in which the qualifying employee is on adoption leave or $4,000.00, whichever is less. The maximum amount of leave with respect to any qualifying employee for which a credit may be claimed under this section must not exceed 12 weeks. Any adoption leave that is paid by this state or a political subdivision of this state or that is required to be paid by law must not be included in determining the amount of the credit under this section for wages paid to a qualifying employee for adoption leave.
(2) The credit allowed under this section with respect to any qualified employee for the tax year must not exceed an amount equal to the product of the normal hourly wage rate of that qualified employee each hour for actual services performed for the employer and the number of hours for which adoption leave is taken. For a qualified employee who is not paid an hourly wage, that qualified employee's wages must be prorated to an hourly wage rate as prescribed by the department.
(3) If the amount of the credit allowed under this section for the tax year and any unused carryforward of the credit allowed by this section exceed the qualified taxpayer's tax liability for the tax year, that portion that exceeds the tax liability for the tax year shall not be refunded but may be carried forward to offset tax liability in subsequent tax years for 5 years or until used up, whichever occurs first.
(4) As used in this section:
(a) "Adoption leave" means a period of absence related to the adoption of a child by the employee to provide time for bonding and adjustments immediately after placement of that child with the employee.
(b) "Qualified employee" means an individual who has been employed by the employer for at least 1 year, and for the preceding year had compensation that does not exceed 60% of the amount applicable for highly compensated employees under section 414(q)(1)(B) of the internal revenue code for that same year.
(c) "Qualified taxpayer" means a taxpayer that is an employer who has a written policy offering adoption leave that satisfies both of the following:
(i) Provides at least 2 weeks of paid adoption leave for each full-time qualifying employee and a proportionate amount of adoption leave for each part-time qualifying employee.
(ii) The rate of payment for adoption leave is not less than 50% of the wages normally paid to that same employee for services performed for the employer.
(d) "Wages" means that term as defined in section 3306(b) of the internal revenue code.
