Bill Text: MI HB4124 | 2025-2026 | 103rd Legislature | Introduced
Bill Title: Corporate income tax: credits; credit for advanced small modular reactors research and development expenses; provide for. TIE BAR WITH: HB 4127'25, HB 4129'25, HB 4125'25, HB 4126'25, HB 4128'25
Spectrum: Moderate Partisan Bill (Republican 13-4)
Status: (Introduced) 2025-02-26 - Bill Electronically Reproduced 02/26/2025 [HB4124 Detail]
Download: Michigan-2025-HB4124-Introduced.html
HOUSE BILL NO. 4124
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
(MCL 206.1 to 206.847) by adding sections 677a and 717a.
the people of the state of michigan enact:
Sec. 677a. (1) Except as otherwise provided under this section, for tax years that begin on and after January 1, 2026, a taxpayer may claim a credit against the tax imposed by this part equal to 15% of the taxpayer's qualified research and development expenses incurred during the tax year. A taxpayer that claims a credit under this section is not prohibited from claiming a credit under section 677. However, the taxpayer shall not claim a credit under this section and section 677 based on the same qualified research expenses.
(2) To be eligible for a credit under this section, a taxpayer must submit, in a form and manner as prescribed by the department, a tentative claim for which a credit under this section is sought to the department on or before March 15 after the calendar year ending with or within the tax year for which the taxpayer intends to submit a claim for the credit on the taxpayer's annual return required under this part. The tentative claim required under this subsection must include, at a minimum, the amount of qualified research and development expenses incurred for which a credit is being claimed. The department shall review all tentative claims submitted under this subsection and if the amount of tentative claims submitted exceeds the amount of credits allowed under subsection (3), the department shall publish a notice on its website notifying taxpayers of the adjustment to the tentative claims for that calendar year as required under subsection (3).
(3) The aggregate amount of credits allowed to be claimed by all taxpayers under this section and all employers under section 717a based on qualified research and development expenses incurred in a single calendar year must not exceed $2,500,000.00. If the aggregate amount of tentative claims submitted under this section and section 717a exceeds $2,500,000.00, the department shall prorate the amount of the credits allowed for each claimant on an equal basis.
(4) If the amount of the credit allowed under this section exceeds the tax liability of the taxpayer for the tax year, that portion of the credit that exceeds the tax liability of the taxpayer for the tax year must not be refunded but may be carried forward to offset tax liability under this act in subsequent tax years for a period not to exceed 15 tax years or until used up, whichever occurs first.
(5) As used in this section:
(a) "Advanced nuclear reactors" means that term as defined in 42 USC 16271.
(b) "Advanced nuclear reactor technologies" means that term as defined in section 10h of 1939 PA 3, MCL 460.10h.
(c) "Qualified research and development expenses" means qualified research expenses for research conducted in this state related to the design, development, or improvement of advanced nuclear reactor technologies and to accelerate the availability of advanced nuclear reactors into domestic and international markets. Qualified research and development expenses do not include qualified research expenses for research conducted outside of this state.
(d) "Qualified research expenses" means that term is defined in section 41(b) of the internal revenue code.
Sec. 717a. (1) Except as otherwise provided under this section, for tax years that begin on and after January 1, 2026, an employer may claim a credit against the taxes required to be withheld and remitted to this state under this chapter equal to 15% of the employer's qualified research and development expenses incurred during the tax year. An employer that claims a credit under this section is not prohibited from claiming a credit under section 717. However, the employer shall not claim a credit under this section and section 717 based on the same qualified research expenses.
(2) To be eligible for a credit under this section, an? employer must submit, in a form and manner as prescribed by the department, a tentative claim for which a credit under this section is sought to the department on or before March 15 after the calendar year ending with or within the tax year for which the taxpayer intends to submit a claim for the credit. The tentative claim required under this subsection must include, at a minimum, the amount of qualified research and development expenses incurred for which a credit is being claimed. The department shall review all tentative claims submitted under this subsection and if the amount of tentative claims submitted exceeds the amount of credits allowed under subsection (3), the department shall publish a notice on its website notifying employers of the adjustment to the tentative claims for that calendar year as required under subsection (3).
(3) The aggregate amount of credits allowed to be claimed by all employers under this section and all taxpayers under section 677a based on qualified research and development expenses incurred in a single calendar year must not exceed $2,500,000.00. If the aggregate amount of tentative claims submitted under this section and section 677a exceeds $2,500,000.00, the department shall prorate the amount of the credits allowed for each claimant on an equal basis.
(4) If the amount of the credit allowed under this section exceeds the tax liability of the employer for the tax year, that portion of the credit that exceeds the tax liability of the employer for the tax year must not be refunded but may be carried forward to offset tax liability under this chapter in subsequent tax years for a period not to exceed 15 tax years or until used up, whichever occurs first.
(5) As used in this section:
(a) "Advanced nuclear reactor" means that term as defined in 42 USC 16271.
(b) "Advanced nuclear reactor technologies" means that term as defined in section 10h of 1939 PA 3, MCL 460.10h.
(c) "Qualified research and development expenses" means qualified research expenses for research conducted in this state related to the design, development, or improvement of advanced nuclear reactor technologies and to accelerate the availability of advanced nuclear reactors into domestic and international markets. Qualified research and development expenses do not include qualified research expenses for research conducted outside of this state.
(d) "Qualified research expenses" means that term as defined in section 41(b) of the internal revenue code.
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) House Bill No. 4127 (request no. H00155'25).
(b) House Bill No. 4129 (request no. H00156'25).
(c) House Bill No. 4125 (request no. H00157'25).
(d) House Bill No. 4126 (request no. H00158'25).
(e) House Bill No. 4128 (request no. H01460'25).
