Why Surrogacy Was Illegal in Michigan and What Changed

Surrogacy is legal in Michigan. Since April 2, 2025, the Assisted Reproduction and Surrogacy Parentage Act has allowed both compensated and altruistic surrogacy, made written surrogacy agreements enforceable in court, and created a pre-birth process that places the intended parents’ names directly on the child’s birth certificate.¹ That is a complete reversal of Michigan’s prior position; until the new law took effect, Michigan was the only state in the country that criminalized paid surrogacy and refused to enforce surrogacy contracts.²

What Michigan Law Now Allows

The statute permits surrogacy agreements to include payment of compensation, support, and reasonable expenses, and sets no cap on the amount.³ It covers gestational surrogacy, where the surrogate has no genetic connection to the child, and traditional surrogacy, where the surrogate’s own egg is used. A properly executed agreement is enforceable, and the parties can go to the family division of circuit court before the baby is born to have parentage legally established.¹ Under the old framework, families typically had to run a post-birth adoption to secure parental rights, with the risk that the arrangement could unravel at any point.

Requirements for a Valid Surrogacy Agreement

The law is detailed about what has to be in place before an agreement will be enforced. Miss any of these pieces and the agreement can be set aside, which pushes parentage back into a contested court process after birth.

Surrogate Eligibility

A surrogate must be at least 21 years old, have given birth to at least one prior child, complete a medical evaluation related to the surrogacy, complete a mental health consultation, and have independent legal representation from a Michigan-licensed attorney throughout the process.¹ The intended parents pay for the surrogate’s attorney, but the surrogate picks her own lawyer. That separation protects the surrogate’s independent advice.

Intended Parent Eligibility

Each intended parent must be at least 21, complete a mental health consultation, and have independent legal representation from a Michigan-licensed attorney.¹ A genetic connection to the child is not required. Families using donor eggs, donor sperm, or both can still establish legal parentage through the agreement.

Agreement Formalities

At least one party must be a Michigan resident, or the assisted reproduction procedure or the birth itself must occur in Michigan. Every party, including the surrogate’s spouse if she has one, must sign, and each signature must be notarized. The agreement has to be fully executed before any surrogacy-related medical procedure takes place, other than the required medical evaluation and the mental health consultations.¹ It also has to disclose that the intended parents will cover the surrogate’s agreed-upon expenses, assisted reproduction costs, and medical expenses for the surrogate and the child, and it has to explain each party’s right to terminate the agreement.³

Getting a Pre-Birth Parentage Order

This is the piece of the new law that changes daily life for families the most. Any party to a surrogacy agreement can file in the family division of circuit court for a parentage judgment before the child is born.¹ The filing must include certifications from both the intended parents’ attorney and the surrogate’s attorney confirming the agreement meets the statutory requirements, plus statements from every party that they entered the agreement voluntarily.

If the surrogate does not challenge the accuracy of the attorney certifications, the court must enter the judgment without a hearing. The judgment names the intended parents as the legal parents, confirms that the surrogate and her spouse have no parental claim, and seals the court records. The intended parents’ names go directly on the birth certificate, with no post-birth adoption required.¹

Who Can Be an Intended Parent

The law defines an intended parent as any individual, married or unmarried, who demonstrates intent to be legally bound as a parent of a child conceived through assisted reproduction. A single person, an unmarried couple, or a same-sex couple can enter into an enforceable agreement and obtain a pre-birth parentage order as long as the eligibility requirements are met. The statute also provides separately that a donor who provides eggs or sperm is not a parent of the resulting child, which locks the intended parents’ legal position in place when donor gametes are used.¹

What the Surrogate Keeps Control Of

Michigan builds nonwaivable protections into every surrogacy agreement. The surrogate retains full authority over all health and welfare decisions during the pregnancy, including whether to consent to a cesarean section or a multiple embryo transfer, and she has the right to choose her own healthcare provider. Any contract term that tries to limit this autonomy is void and unenforceable.³ The statute ties these protections to Article I, Section 28 of the Michigan Constitution. Both the surrogate and the intended parents also have the right to terminate the agreement, and the agreement itself has to inform them of that right.

What Surrogacy Costs in Michigan

Legalization removed the criminal risk, but it did not make surrogacy cheap. Total costs now resemble what families have long paid in states where surrogacy was already permitted:

Surrogate compensation. Base pay for a first-time gestational carrier typically falls between $50,000 and $75,000 nationally, with experienced surrogates earning more.
Agency fees. Agencies that handle matching, screening, and case management generally charge $20,000 to $50,000.
Legal fees. Drafting the agreement, confirming statutory compliance, and obtaining the parentage order typically run $5,000 to $25,000.
Medical costs. IVF, embryo transfer, prenatal care, and delivery add substantially to the total and depend heavily on insurance and whether complications arise.

Insurance is where many families get caught off guard. A lot of private health plans exclude coverage for surrogate pregnancies, so the surrogate’s existing policy may not cover maternity care tied to the surrogacy. Intended parents often buy a supplemental policy or a standalone surrogacy maternity policy, which can cost $8,000 to $25,000. Reviewing the surrogate’s existing plan for exclusions early is worth the hour it takes.

Tax Treatment of Surrogacy Payments

The IRS has not issued specific guidance on surrogacy compensation, so treatment depends on how the agreement is structured. The baseline rule is that all income is taxable unless a specific exclusion applies. For surrogates, attorneys often draft base compensation as payment for the physical demands and bodily risk of pregnancy, arguing it fits the federal exclusion for damages received on account of personal physical injury or sickness.⁴ Whether the IRS would accept that argument on challenge is an open question, and the contract language matters.

Reimbursements for documented out-of-pocket costs such as medical expenses, travel to appointments, and maternity clothing are generally non-taxable because they replace money actually spent. Payments that look more like general income, such as monthly allowances not tied to specific expenses, are more likely to be taxable. Surrogates who carry for multiple families may face added scrutiny because the IRS could view repeat surrogacy as a business activity. Not receiving a 1099 does not make the income tax-free.

For intended parents, the IRS states that amounts paid for the identification, retention, compensation, and medical care of a gestational surrogate are not deductible medical expenses because they are paid for an unrelated party.⁵ IVF costs performed on the intended parent’s own body, such as egg retrieval, fertility medications, and embryo creation, may qualify as deductible medical expenses to the extent they exceed 7.5% of adjusted gross income. Given the dollar amounts, both surrogates and intended parents are usually better off working with a tax professional who handles assisted reproduction regularly.

A Note on the Prior Ban

Michigan’s Surrogate Parenting Act of 1988 declared surrogacy contracts void and unenforceable and criminalized paid arrangements.⁶ That law is gone. Agreements entered into on or after April 2, 2025, that meet the new statutory requirements are governed by the Assisted Reproduction and Surrogacy Parentage Act, and the pre-birth parentage pathway is available in Michigan courts.

1
Michigan Legislature. Assisted Reproduction and Surrogacy Parentage Act – Act 24 of 2024
2
Office of the Governor of Michigan. Gov. Whitmer Signs Bills Decriminalizing Surrogacy and Protecting IVF
3
Michigan Legislature. Michigan Compiled Laws 722.1903 – Surrogacy Agreement Compliance Requirements and Permissible Provisions
4
Office of the Law Revision Counsel. 26 USC 104 – Compensation for Injuries or Sickness
5
Internal Revenue Service. Publication 502 – Medical and Dental Expenses
6
Michigan Legislature. Surrogate Parenting Act – Act 199 of 1988