Michigan program allows authorized businesses to retain withholding

Depending upon the number of jobs created and the wage level of the jobs, a company will be issued a withholding certificate covering the cost of either 50% or 100% of the income tax withheld attributable to the newly hired employees. An eligible business can receive one of three amounts:

  • if the business creates a minimum of 3,000 certified new jobs in Michigan with an average annual wage that is equal to or greater than the average wage for that region of Michigan, that business will be able to receive 100% of the withholding taxes attributable to employees in those jobs for a period of up to 10 years.
  • if the business creates a minimum of 500 certified new jobs in Michigan with an average annual wage that is equal to or greater than the average wage for that region of Michigan, that business will be eligible to receive 50% of the withholding taxes attributable to employees in those jobs for a period of up to 5 years.
  • if the business creates a minimum of 250 certified new jobs in Michigan with an average annual wage that is equal to 125% or more of the average wage for that region of Michigan, that business will be able to receive 100% of the withholding taxes attributable to employees in those jobs for a period of up to 10 years.

These amounts will be reduced by 5% to cover administrative expenses of the Good Jobs for Michigan Fund (fund).

An eligible business can be a business other than a retail establishment, professional sports stadium, casino, or the portion used exclusively for retail sales. If an eligible business meets all the requirements of the Good Jobs for Michigan program it may enter into a written agreement with the fund. New businesses cannot become authorized and written agreements cannot be entered into on or after December 31, 2019. No more than 15 new written agreements can be entered per calendar year and the total combined amount that may be issued in withholding certificates cannot exceed $200,000,000 (including the 5% payment to cover administrative expenses). The certified new jobs must be created within five years of entering into the written agreement.

If an authorized business remains in compliance, the fund will issue to it a withholding certificate each calendar year. Upon receipt of the withholding certificate, the business can request a payment from the fund and the fund must issue the withholding tax payment within 90 days of receipt of the request.

“Certified new job” generally means a full-time job created by an authorized business at a facility in Michigan that is in excess of the number of full-time jobs that authorized business maintained in Michigan prior to the expansion or location and the number of full-time jobs that the authorized business acquired through a merger or acquisition that were located in this state prior to the expansion or location, as determined by the fund. Pursuant to a written agreement between the authorized business, the fund, and the primary supplier, certified new jobs for an authorized business with a minimum of 3,000 certified new jobs in Michigan with an average annual wage that is equal to or greater than average wage for that region of Michigan may, as determined by the fund, include the number of those new jobs created by the primary supplier of that authorized business as a result of the new or increased business activity with that authorized business as determined by the fund. (Act 109, S.B. 242, Laws 2017, approved July 26, 2017, and effective August 16, 2017.)

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