ADDITIONAL PERSONAL EXEMPTION

FOR TAXPAYER WITH STILLBIRTH CERTIFICATE

House Bill 4522 as introduced

Sponsor:  Rep. Mary Whiteford

Committee:  Tax Policy

Complete to 3-13-18

SUMMARY:

House Bill 4522 would amend the Income Tax Act to allow a taxpayer to claim an additional personal exemption in the tax year in which the taxpayer has a certificate of stillbirth from the Department of Health and Human Services, as provided under the Public Health Code. The exemption would begin for tax years after 2017.

MCL 206.30

BRIEF BACKGROUND:

The personal exemption for tax year 2018 will be $4,050, and the personal exemption will be increased under current law to $4,400 in 2019, $4,750 in 2020, and $4,900 in 2021. An exemption reduces taxable income.

Public Act 319 of 2006 amended the Income Tax Act to provide for a refundable tax credit for a taxpayer that had a stillbirth certificate from the then Department of Community Health. A tax credit reduces tax liability. The credit was in an amount equal to 4.50% of the personal exemption amount, rounded to the nearest $10 increment.[1] Public Act 38 of 2011 eliminated the credit.

FISCAL IMPACT:

During the last two tax years for which the stillbirth credit was available to filers, credits were claimed on fewer than 300 returns each year, and the total value of the credits claimed was about $51,000 in TY 2010 and $47,000 in TY 2011. Similar or moderately higher fiscal impacts would be expected going forward.

                                                                                        Legislative Analyst:   Patrick Morris

                                                                                                Fiscal Analyst:   Jim Stansell

■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.

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