Stillborn Tax Exemption

Stillborn Tax Exemption

Recently the State of Michigan House of Representative unanimously passed a bill that allows for a stillborn tax exemption:

The Michigan House today unanimously approved state Rep. Mary Whiteford’s legislation assisting parents of a stillborn baby through a Michigan income tax personal exemption.

“This is about what’s most important – our families, particularly those going through the very difficult time after losing a baby,” said Whiteford, of Allegan County’s Casco Township. “There is nothing we can do to take away the pain and loss for families dealing with a stillbirth. But we can acknowledge the baby, and provide some financial relief on expenses.”

There are roughly 550 to 650 stillbirths in Michigan each year, according to recent statistics. Families dealing with stillbirths often face thousands of dollars in expenses, first preparing for a baby and finally with funeral expenses.

Michigan provided a stillborn child tax credit from 2006 until broad tax changes eliminated multiple credits in 2011. Rather than a credit, Whiteford’s legislation would provide assistance through a one-time exemption for a dependent.

Whiteford noted current law allows families to claim a dependency exemption for a baby who dies after a breath or two at birth.

“Michigan families suffering through a stillbirth deserve the same acknowledgement of a lost life,” Whiteford said.

A taxpayer would need a certificate of stillbirth from the Department of Health and Human Services to qualify.

House Bill 4522, which received broad bipartisan co-sponsorship support after the vote, advances to the Senate for further consideration.