HB 5806 MI

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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