EARNED INCOME TAX CREDIT (EITC)

Rate (Fully-Refundable): 30% of the federal credit¹

Eligibility Requirements: All Michigan taxpayers who qualify for the federal credit are automatically eligible.

Latest Legislative Action: 

• Public Act (PA) 4 increased the state EITC from 6% to 30%, beginning in tax year 2023.

Notes:

• Lawmakers introduced a bill in the Senate that would increase the state’s EITC. In 2011, the legislature cut the EITC’s value from 20% to 6% of the federal credit.
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• Michigan’s state EITC has endured a tumultuous history since being introduced in 2006 at 20% of the federal credit. Following discussions of eliminating the credit to balance the state budget, the legislature agreed on a compromise to reduce the rate in 2011 to 6% of the federal credit.
• In 2012 and 2013, lawmakers considered but did not pass legislation that would have restored the state EITC to 20% of the federal credit
• As part of a 2014 road funding package, Democrats proposed to reverse the 2011 EITC cuts and increase the state’s sales tax above the threshold allowed in Michigan’s constitution – triggering a public vote that soundly defeated the measure.

CHILD TAX CREDIT (CTC)

Michigan does not currently offer a state-level CTC.

CHILD AND DEPENDENT CARE TAX CREDIT (CDCTC)

Michigan does not currently offer a state-level CDCTC.

Latest Legislative Action: In January 2018, the Senate will vote on legislation to create a state-level Child and Dependent Care Tax Credit.