The proposed bill establishes a "child care savings program" in Michigan, allowing individuals to create child care savings accounts with financial institutions. These accounts can be used to pay or reimburse eligible child care expenses incurred for qualified individuals, defined as dependents under 14 years of age. The bill outlines the responsibilities of account holders, including the requirement to maintain records and submit documentation with their income tax returns to claim deductions for contributions made to these accounts. Contributions and interest earned on these accounts are exempt from taxation, and qualified withdrawals are also tax-exempt.

Additionally, the bill specifies that financial institutions are not obligated to track or designate accounts as child care savings accounts, nor are they liable for ensuring that funds are used appropriately. A penalty of 10% is imposed on withdrawals made for purposes other than eligible costs, although exceptions are provided for certain circumstances, such as the account holder's death or bankruptcy. The act will only take effect if a related bill is also enacted into law.