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Michigan allows deduction for charitable contributions to prepaid tuition fund

(November 9, 2009) - The Michigan Governor has signed legislation permitting the amount of a charitable contribution made to an advance tuition payment fund to be subtracted from the Michigan business tax base and the personal income tax base. The subtraction is available for tax years starting after 2009. Act 134 (H.B. 4191) and Act 135 (H.B. 4629).

The legislation is intended to encourage and facilitate gifts to the Michigan Education Trust. Rather than purchasing a tuition prepayment contract for a particular student, taxpayers simply could make a charitable contribution without any obligation. These donations would create a pool of money that could be invested with other MET funds and used to pay the tuition of students who will graduate from high school and go on to college in future years.

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