HB 5806

Act No. 30
Public Acts of 2026
Approved by the Governor
July 21, 2026
Filed with the Secretary of State
July 21, 2026
EFFECTIVE
DATE: July 21, 2026
state of michigan
103rd Legislature
Regular session of 2026
Introduced by Reps. Grant, Aragona and Wooden
ENROLLED HOUSE BILL No. 5806
AN ACT to amend 1967 PA 281,
entitled �An act to meet deficiencies in state funds by providing for the
imposition, levy, computation, collection, assessment, reporting, payment, and
enforcement by lien and otherwise of taxes on or measured by net income and on
certain commercial, business, and financial activities; to prescribe the manner
and time of making reports and paying the taxes, and the functions of public
officers and others as to the taxes; to permit the inspection of the records of
taxpayers; to provide for interest and penalties on unpaid taxes; to provide
exemptions, credits, rebates, and refunds of the taxes; to create certain
funds; to provide for the expenditure of certain funds; to impose certain
duties and requirements on certain officials, departments, and authorities of
this state; to prescribe penalties for the violation of this act; to provide an
appropriation; and to repeal acts and parts of acts,� (MCL 206.1 to 206.847) by
adding sections 281 and 678.
The People of the State of
Michigan enact:
Sec.
281. (1) Except as otherwise provided under this section, for tax years that
begin on and after January 1, 2027, a qualified taxpayer may, in a form and
manner as determined by the department, claim a housing opportunity tax credit
for a qualified project against the tax imposed under this part in an amount
equal to the amount listed on the allocation report for that qualified taxpayer
for that qualified project. Except as otherwise provided in subsection (2), a
qualified taxpayer that is an owner shall claim a housing opportunity tax
credit listed on an allocation report for the owner�s tax year described in
section 22e(5) of the state housing development authority act of 1966, 1966 PA
346, MCL 125.1422e. Except as otherwise provided in subsection (2), a qualified
taxpayer that has been allocated a housing opportunity tax credit listed on an
allocation report shall claim the credit for the qualified taxpayer�s tax year
described in section 22e(6) of the state housing development authority act of
1966, 1966 PA 346, MCL 125.1422e. A qualified taxpayer shall not claim a
housing opportunity tax credit for a calendar year listed on an allocation
report unless the qualified taxpayer and the amount of the qualified taxpayer�s
credit are listed on that allocation report.
(2) To claim a housing opportunity tax credit under this
section, the qualified taxpayer shall attach a copy of the eligibility
statement to the annual return filed under this part on which the credit is
claimed. However, if the owner of the qualified project that has received an
approval notice has submitted a final cost certification and a request for an
eligibility statement to the authority but the authority has not yet approved
the final cost certification and issued the eligibility statement to the owner,
the qualified taxpayer may either claim the housing opportunity tax credit on
the qualified taxpayer�s annual return for the tax year as prescribed under
subsection (1) by attaching a copy of the approval notice for that
qualified project or wait to claim the credit on the qualified taxpayer�s
annual return for the qualified taxpayer�s tax year in which the eligibility
statement for the qualified project is issued.
(3) If any portion of a federal low-income housing tax credit
claimed for a qualified project for which a housing opportunity tax credit is
also claimed under this section is required to be recaptured or is otherwise
disallowed during the credit period under section 42 of the internal revenue
code, the qualified taxpayer that claimed the housing opportunity tax credit
under this section for that same qualified project is also required to
recapture a portion of the housing opportunity tax credit as provided under
this subsection. The percentage of the housing opportunity tax credit subject
to recapture must be equal to the percentage of the federal low-income housing
tax credit subject to recapture or otherwise disallowed during the same tax
year. Any housing opportunity tax credits recaptured or disallowed must be
added back to the income tax liability of the qualified taxpayer that claimed
the housing opportunity tax credit in a like amount and must be included on the
annual return of the qualified taxpayer submitted for the tax year in which the
recapture or disallowance event is identified on the federal return.
(4) If an updated allocation report is provided to the
department under section 22e(8)(b) of the state housing development authority
act of 1966, 1966 PA 346, MCL 125.1422e, that reduces or increases the amount
of a housing opportunity tax credit that was previously claimed by a qualified
taxpayer, each qualified taxpayer that had its credit amount adjusted shall
file an amended return as required under section 325 for the affected tax year
to adjust the amount of the credit accordingly.
(5) The housing opportunity tax credit allowed under this
section must be claimed after all other nonrefundable credits allowed under
this part. If the housing opportunity tax credit allowed under this section for
the tax year and any unused carryforward of the housing opportunity tax credit
allowed by this section exceed the qualified taxpayer�s tax liability for the
tax year, that portion that exceeds the tax liability for the tax year must not
be refunded but may be carried forward to offset tax liability in subsequent
tax years for 10 years or until used up, whichever occurs first. If a qualified
taxpayer has an unused carryforward of a housing opportunity tax credit under
this section, the amount otherwise added under subsection (3) to the qualified
taxpayer�s tax liability may instead be used to reduce the qualified taxpayer�s
carryforward under this section.
(6) As used in this section:
(a) �Allocation report�, �approval notice�, �credit period�, �eligibility
statement�, �federal low-income housing tax credit�, �housing opportunity tax
credit�, �owner�, and �qualified project� mean those terms as defined under
section 22e of the state housing development authority act of 1966, 1966 PA
346, MCL 125.1422e.
(b) �Authority� means the Michigan state housing development
authority created under section 21 of the state housing development authority
act of 1966, 1966 PA 346, MCL 125.1421.
(c) �Qualified taxpayer� means any of the following:
(i) A taxpayer that is the owner of a
qualified project and has received an eligibility statement for that qualified
project.
(ii) A taxpayer that is the owner of a
qualified project that received an approval notice and has submitted a final
cost certification and a request for an eligibility statement to the authority
but the authority has not yet approved the final cost certification and issued
the eligibility statement to the owner.
(iii) A taxpayer that owns a direct or
indirect, through 1 or more other flow-through entities, interest in an owner
described under subparagraph (i) or (ii) and that has been allocated a housing opportunity tax
credit at any time prior to filing an annual or amended return under this part
on which a housing opportunity tax credit under this section is claimed.
Sec.
678. (1) Except as otherwise provided under this section, for tax years that
begin on and after January 1, 2027, a qualified taxpayer may, in a form and
manner as determined by the department, claim a housing opportunity tax credit
for a qualified project against the tax imposed under this part in an amount
equal to the amount listed on the allocation report for that qualified taxpayer
for that qualified project. Except as otherwise provided in subsection (2), a
qualified taxpayer that is an owner shall claim a housing opportunity tax
credit listed on an allocation report for the owner�s tax year described in
section 22e(5) of the state housing development authority act of 1966, 1966 PA
346, MCL 125.1422e. Except as otherwise provided in subsection (2), a qualified
taxpayer that has been allocated a housing opportunity tax credit listed on an
allocation report shall claim the credit for the qualified taxpayer�s tax year
described in section 22e(6) of the state housing development authority act of
1966, 1966 PA 346, MCL 125.1422e. A qualified taxpayer shall not claim a
housing opportunity tax credit for a calendar year listed on an allocation
report unless the qualified taxpayer and the amount of the qualified taxpayer�s
credit are listed on that allocation report.
(2) To claim a housing opportunity tax credit under this
section, the qualified taxpayer shall attach a copy of the eligibility
statement to the annual return filed under this part on which the credit is
claimed. However, if the owner of the qualified project that has received an
approval notice has submitted a final cost certification and a request for an
eligibility statement to the authority but the authority has not yet approved
the final cost certification and issued the eligibility statement to the owner,
the qualified taxpayer may either claim the housing opportunity tax credit on
the qualified taxpayer�s annual return for the tax year as prescribed under
subsection (1) by attaching a copy of the approval notice for that qualified
project or wait to claim the credit on the qualified taxpayer�s annual return
for the qualified taxpayer�s tax year in which the eligibility statement for
the qualified project is issued.
(3) If any portion of a federal low-income housing tax credit
claimed for a qualified project for which a housing opportunity tax credit is
also claimed under this section or section 476a of the
insurance code of 1956, 1956 PA 218, MCL 500.476a, is required to be
recaptured or is otherwise disallowed during the credit period under section 42
of the internal revenue code, the qualified taxpayer that claimed the housing
opportunity tax credit under this section or section 476a of the insurance code
of 1956, 1956 PA 218, MCL 500.476a, for that same qualified project is also
required to recapture a portion of the housing opportunity tax credit as
provided under this subsection. The percentage of the housing opportunity tax
credit subject to recapture must be equal to the percentage of the federal low-income
housing tax credit subject to recapture or otherwise disallowed during the same
tax year. Except for a qualified taxpayer that is subject to the tax under
chapter 12, housing opportunity tax credits recaptured or disallowed must be
added back to the income tax liability of the qualified taxpayer that claimed
the housing opportunity tax credit in a like amount and must be included on the
annual return of the qualified taxpayer submitted for the tax year in which the
recapture or disallowance event is identified on the federal return. For a
qualified taxpayer that, without regard to the amount of any recapture that may
be required under this subsection, is subject to the tax under chapter 12 for
the tax year in which the recapture or disallowance event is identified on the
federal return, any housing opportunity tax credits recaptured or disallowed
under this subsection must be added back to the qualified taxpayer�s tax
liability under chapter 12 in a like amount and must be included on the
qualified taxpayer�s annual return submitted for the tax year in which the
recapture or disallowance event is identified on the federal return.
(4) If an updated allocation report is provided to the
department under section 22e(8)(b) of the state housing development authority
act of 1966, 1966 PA 346, MCL 125.1422e, that reduces or increases the amount
of a housing opportunity tax credit that was previously claimed by a qualified
taxpayer, each qualified taxpayer that had its credit amount adjusted shall
file an amended return as required under section 687 for the affected tax year
to adjust the amount of the credit accordingly.
(5) The housing opportunity tax credit allowed under this
section must be claimed after all other nonrefundable credits allowed under
this part. If the housing opportunity tax credit allowed under this section for
the tax year and any unused carryforward of the housing opportunity tax credit
allowed by this section exceed the qualified taxpayer�s tax liability for the
tax year, that portion that exceeds the tax liability for the tax year must not
be refunded but may be carried forward to offset tax liability in subsequent
tax years for 10 years or until used up, whichever occurs first. If a qualified
taxpayer has an unused carryforward of a housing opportunity tax credit under
this section, the amount otherwise added under subsection (3) to the qualified
taxpayer�s tax liability may instead be used to reduce the qualified taxpayer�s
carryforward under this section.
(6) As used in this section:
(a) �Allocation report�, �approval notice�, �credit period�, �eligibility
statement�, �federal low-income housing tax credit�, �housing opportunity tax
credit�, �owner�, and �qualified project� mean those terms as defined under
section 22e of the state housing development authority act of 1966, 1966 PA
346, MCL 125.1422e.
(b) �Authority� means the Michigan state housing development
authority created under section 21 of the state housing development authority
act of 1966, 1966 PA 346, MCL 125.1421.
(c) �Qualified taxpayer� means any of the following:
(i) A taxpayer that is the owner of a
qualified project and has received an eligibility statement for that qualified
project.
(ii) A taxpayer that is the owner of a
qualified project that received an approval notice and has submitted a final
cost certification and a request for an eligibility statement to the authority
but the authority has not yet approved the final cost certification and issued
the eligibility statement to the owner.
(iii) A taxpayer that owns a direct or
indirect, through 1 or more other flow-through entities, interest in an owner
described under subparagraph (i) or (ii) and that has been allocated a housing opportunity tax
credit at any time prior to filing an annual or amended return under this part
on which a housing opportunity tax credit under this section is claimed.
Enacting section 1. This amendatory act does not
take effect unless all of the following bills of the 103rd Legislature are
enacted into law:
(a) Senate Bill
No. 966.
(b) House Bill No.
5807.
This act is ordered to take
immediate effect.
Clerk of the House of
Representatives
Secretary of the Senate
Approved___________________________________________
____________________________________________________
Governor