Income tax; credit; state child and dependent care tax credit;

establish.

INCOME TAX: Credit; CHILDREN: Child care

A bill to amend 1967 PA 281, entitled

"Income tax act of 1967,"

(MCL 206.1 to 206.532) by adding section 270.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 SEC. 270. (1) FOR TAX YEARS THAT BEGIN AFTER DECEMBER 31,

2 2001, IF A TAXPAYER CLAIMS A CREDIT FOR HOUSEHOLD AND DEPENDENT

3 CARE SERVICES UNDER SECTION 21 OF THE INTERNAL REVENUE CODE ON

4 HIS OR HER FEDERAL TAX RETURN, THE TAXPAYER MAY CLAIM A CREDIT ON

5 HIS OR HER RETURN AGAINST THE TAX IMPOSED BY THIS ACT EQUAL TO

6 THE AMOUNT SPENT IN THE TAX YEAR ON EMPLOYMENT-RELATED EXPENSES

7 AS DEFINED IN SECTION 21 OF THE INTERNAL REVENUE CODE OR 10% OF

8 THE MAXIMUM CREDIT AMOUNT ALLOWED UNDER THAT SECTION, WHICHEVER

9 IS LESS.

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1 (2) IF THE CREDIT ALLOWED UNDER THIS SECTION EXCEEDS THE TAX

2 LIABILITY OF THE TAXPAYER FOR THE TAX YEAR, THAT PORTION OF THE

3 CREDIT THAT EXCEEDS THE TAX LIABILITY SHALL NOT BE REFUNDED.

4 (3) IN CALCULATING THE AMOUNT OF A CREDIT UNDER THIS SEC-

5 TION, A TAXPAYER SHALL NOT INCLUDE ANY EXPENSES DEDUCTED UNDER

6 ANY OTHER SECTION OF THIS ACT.

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