FIRST-TIME HOME BUYER SAVINGS PROG. S.B. 145 & H.B. 4290:
SUMMARY AS ENACTED
Senate Bill 145 (as enacted) PUBLIC ACT 6 of 2022
House Bill 4290 (as enacted) PUBLIC ACT 5 of 2022
Sponsor: Senator Ken Horn (S.B. 145)
Representative Mari Manoogian (H.B. 4290)
House Committee: Tax Policy
CONTENT
Senate Bill 145 created the "Michigan First-Time Home Buyer Savings Program Act" to do the following:
-- Require the Department of Treasury to establish the First-Time Home Buyer Savings Program.
-- Allow an individual, beginning January 1, 2022, through December 31, 2026, to open an account with a financial institution and designate the account as a first-time home buyer savings account to be used to pay or reimburse a beneficiary's eligible costs for the purchase of a single-family residence in the State.
-- Specify that contributions to and interest earned on a first-time home buyer savings account, as well as qualified withdrawals made from the account, are exempt from taxation under the Income Tax Act.
-- Limit the maximum account balance of a first-time home buyer savings account to $50,000, subject to an earnings exception.
-- Specify that, subject to certain exceptions, funds withdrawn from an account for any purpose other than the payment of eligible costs are subject to a penalty equal to 10% of the amount withdrawn.
-- Specify what a financial institution is not responsible or liable for with respect to first-time home buyer savings accounts.
-- Require the Department to prescribe the form and manner in which a taxpayer must claim the deduction and require certain information to be included in the form.
-- Allow the State Treasurer to promulgate rules to implement the Program.
-- Allow the Department to prepare and distribute informational materials on the Program to financial institutions and potential