Legislative Analysis
Phone: (517) 373-8080
EMPLOYER HOUSING CREDITS http://www.house.mi.gov/hfa
House Bills 4649 and 4650 as introduced Analysis available at
Sponsor: Rep. Mark Huizenga http://www.legislature.mi.gov
Committee: Local Government and Municipal Finance
Complete to 6-2-21
SUMMARY:
House Bills 4649 and 4650 would respectively amend the State Housing Development
Authority Act and the Income Tax Act. The bills would together create an income tax credit
for employers that contribute to local trust funds dedicated to affordable housing or that
offer certain employees assistance in obtaining affordable housing near where they work.
Eligible contributions and employee assistance projects would have to be approved by the
Michigan State Housing Development Authority (MSHDA). The credit would equal 50%
of eligible contributions or project costs. If the credit exceeded tax liability, it would not
be refunded, but it could be carried forward for up to 10 subsequent tax years.
House Bill 4650 would amend the Income Tax Act to create the tax credit in both Part 1
(individual income tax) and Part 2 (corporate income tax) of the act.
Under the bill, for tax years beginning on and after January 1, 2021, a taxpayer that is an
employer could claim a credit against the tax for making an eligible contribution to a local
impact housing trust fund or for offering its employees the option to participate in a
qualified employer-assisted housing project.
Eligible contribution would mean a promise, grant, or payment of money or
property (including a promise to pay) approved by MSHDA.
Local impact housing trust fund would mean a trust fund established by a local
community that dedicates its funds to investing in local housing projects and
providing affordable housing in the community.
Qualified employer-assisted housing project would mean a project provided and
funded by the employer that offers assistance in obtaining affordable housing near
the workplace to its employees whose adjusted household income is 120% or less
of the area median income, as determined by MSDHA. The assistance could
include down payment assistance, reduced-interest mortgages, mortgage guarantee
programs, rental subsidies, individual development account savings plans, or any
similar type of project approved by MSHDA.
Adjusted household income would mean (as defined in R 125.101 of the Michigan
Administrative Code) the combined gross annual income of members of a
household after deducting: any unusual or temporary income; $650 for each
household member; any earnings of a household member who is less than 18 years
House Fiscal Agency Page 1 of 3
 old or is physically or mentally handicapped; 50% of the income of the second
highest adult wage earner in the household; and 10% of gross annual income (up to
$1,000).
The credit would equal 50% of the total eligible contributions made to a local impact
housing trust fund during the tax year and 50% of the total costs incurred to provide and
fund qualified employer-assisted housing projects. (A taxpayer who is a member of an
employer that is a flow-through entity could claim the credit on his or her individual income
tax based on proportionate share of ownership or an alternative method approved by the
Department of Treasury.) Any portion of the credit (including unused carryforward) that
exceeded the taxpayer’s tax liability for the tax year could not be refunded but could be
carried forward to offset tax liability in subsequent tax years for up to 10 years.
To claim the credit, the employer would have to apply to MSHDA for approval of its
employer-assisted housing project and certification of its eligible contributions and costs
during the tax year, in a form and manner prescribed by MSDHA. A taxpayer could not
claim a credit unless MSHDA had issued the taxpayer a certificate for the tax year. The
taxpayer would have to attach the certificate to the annual return on which the credit is
claimed. The certificate would have to include all of the following:
• The taxpayer’s name.
• A description of each qualified employer-assisted housing project and the name of
each local impact housing trust fund.
• The amount for the tax year of eligible contributions made to each local impact
housing trust fund and costs incurred for a qualified employer-assisted housing
project and the amount of the credit that may be claimed for the tax year. (For an
employer that is a flow-through entity, the certificate would have to separately state
the amount of the credit that each taxpayer who is a member of the flow-through
entity may claim for the tax year, based on proportionate share of ownership or an
alternative method approved by the Department of Treasury.)
• The taxpayer’s federal employer identification number or the Michigan Department
of Treasury number assigned to the taxpayer.
Proposed MCL 206.279 and 206.678
House Bill 4649 would amend the State Housing Development Authority Act to authorize
MSHDA to determine the eligibility of contributions and costs for the tax credit described
above and issue certificates to taxpayers. The bill also would require MSHDA to develop
an application and approval process for those contributions and costs and to annually issue
the certificate described above to eligible persons.
MCL 125.1422 and proposed MCL 125.1422e
The bills are tie-barred to one another, which means that neither could take effect unless
both were enacted.
House Fiscal Agency HBs 4649 and 4650 as introduced Page 2 of 3
FISCAL IMPACT:
As written, the bills would reduce individual income tax and corporate income tax
revenues. However, because there is no way to determine how much eligible contributions
will total in any given year, the revenue reduction cannot be determined. While the credit
is nonrefundable, any unused amount may be carried forward for 10 years.
Any credits applied to the corporate income tax would reduce general fund revenue. With
respect to the individual income tax, because the credit could not result in a refund, about
23.8% of the revenue reduction would be absorbed by the School Aid Fund, while the
remainder would reduce general fund revenue.
Legislative Analyst: Rick Yuille
Fiscal Analyst: Jim Stansell
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations, and does not constitute an official statement of legislative intent.
House Fiscal Agency HBs 4649 and 4650 as introduced Page 3 of 3


Statutes affected:
House Introduced Bill: 206.1, 206.713