Proposed Corporate Income Tax Credit For Hiring Veterans
In 2011, the Michigan Corporate Income Tax ("CIT") was signed into law. The CIT repealed the Michigan Business Tax and replaced it with a flat 6% tax on businesses that are taxed as C corporations for federal income tax purposes.
Recently, House Bill 5144 was introduced into the Michigan legislature. As proposed, House Bill 5144 allows Qualified Employers (i.e., employers with less than 100 full-time employees) to claim a credit against the CIT for each Qualified Employee in an amount equal to 25% of the compensation paid by the Qualified Employer to the Qualified Employee or $4,000, whichever is less.
A Qualified Employee is defined as any individual who:
- is a veteran who has served at least 180 days on active duty or has a service connected disability,
- is not employed by the Qualified Employer to replace another employee unless that other employee separated from service voluntarily or for cause, and
- is not a relative of an individual who owns more than 50% of the outstanding stock of the employer.
Please stay tuned for further updates regarding House Bill 5144.
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