Michigan Laws 390.1440 – Payments deductible from taxable income
Current as of: 2023 | Check for updates
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Pursuant to section 30 of the income tax act of 1967, Act No. 281 of the Public Acts of 1967, being section 206.30 of the Michigan Compiled Laws, the purchaser may deduct from taxable income the following payments made by the purchaser in the tax year:
(a) The amount of payment made under an advance tuition payment contract.
Terms Used In Michigan Laws 390.1440
- Advance tuition payment contract: means a contract entered into by the trust and a purchaser pursuant to section 6 to provide for the higher education of a qualified beneficiary. See Michigan Laws 390.1424
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Board: means the board of directors of the Michigan education trust described in section 10. See Michigan Laws 390.1424
- Contract: A legal written agreement that becomes binding when signed.
- Purchaser: means a person who makes or is obligated to make advance tuition payments pursuant to an advance tuition payment contract. See Michigan Laws 390.1424
- State institution of higher education: means a college or university described in section 4, 5, or 6 of article VIII of the state constitution of 1963 or any 4-year degree-granting institution established by the state after the effective date of this act, which institution is designated by the state as a state institution of higher education for purposes of this act. See Michigan Laws 390.1424
- Trust: means the Michigan education trust created in section 5. See Michigan Laws 390.1424
- Tuition: means the quarter or semester charges imposed to attend a state institution of higher education and all mandatory fees required as a condition of enrollment as determined by the board. See Michigan Laws 390.1424
(b) The amount of payment made under a contract with a private sector investment manager that meets all of the following criteria:
(i) The contract is certified and approved by the board to provide equivalent benefits and rights to purchasers and beneficiaries as an advance tuition payment contract.
(ii) The contract applies only for a state institution of higher education or a community or junior college.
(iii) The contract provides for enrollment by the contract’s qualified beneficiary in not less than 4 years after the date on which the contract is entered into.
(iv) The contract is entered into either:
(A) After the purchaser has had his or her offer to enter into an advance tuition payment contract rejected by the board, if the board determines that the trust cannot accept an unlimited number of enrollees upon an actuarially sound basis.
(B) After the board determines that the trust can accept an unlimited number of enrollees upon an actuarially sound basis.