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 dependents under the age of 14, which are necessary for the account holder's employment or education. The bill outlines the definitions of key terms, such as "account holder," "child care expenses," and "qualified withdrawal," and specifies that contributions to these accounts, as well as qualified withdrawals, will be exempt from taxation under the income tax act of 1967.

Additionally, the bill details the responsibilities of account holders, including maintaining records and submitting necessary documentation with their income tax returns. It also clarifies the obligations of financial institutions regarding these accounts, stating they are not required to track or report on the use of funds. A penalty of 10% is imposed on withdrawals made for purposes other than eligible costs, with certain exceptions. The act will only take effect if a related bill (House Bill No. 4057) is also enacted into law.