Bill > HB5118

This bill establishes a work opportunity tax credit for employers in Michigan for tax years beginning on or after January 1, 2026. The credit allows employers (except for tax-exempt organizations) to claim a tax credit equal to 50% of the federal work opportunity tax credit for qualified wages paid to qualified employees. A qualified employee is defined as a Michigan resident who has been certified by the Michigan unemployment insurance agency as a member of a targeted group (as defined by the Internal Revenue Code). The credit can be claimed against state income tax liability, but any amount exceeding the taxpayer's tax liability cannot be refunded. For members of flow-through entities (like partnerships or S-corporations), the credit can be claimed based on their distributive share of business income. When calculating the credit, employers must exclude wages from non-qualified employees and cannot include unused credits carried forward or backward from other tax years. The bill is tied to House Bill 5119 and will only take effect if that companion bill is also enacted into law.

Government Affairs

https://legislature.mi.gov/Bills/Bill?ObjectName=2025-HB-5118