What is the homestead property tax credit?
Michigan’s homestead property tax credit is how the State of Michigan can help you pay some of your property taxes if you are a qualified Michigan homeowner or renter and meet the requirements. You should complete the Michigan Homestead Property Tax Credit Claim MI-1040CR to see if you qualify for the credit.
The credit, for most people, is based on a comparison between property taxes and total household resources. Homeowners pay property taxes directly and renters pay them indirectly with their rent.
Given that each taxpayer has unique circumstances that determine their eligibility for the credit, the Michigan Department of Treasury encourages you to review the information below and/or contact a tax professional.
What is a homestead?
Your homestead is the place where you have your permanent home. It is the place to which you plan to return whenever you go away. You must be the owner and occupant or be contracted to pay rent and occupy the dwelling. You can only have one homestead at a time. Cottages, second homes, property you own and rent/lease to others, and college dormitories do not qualify as a homestead.
Who qualifies for a homestead property tax credit?
You may qualify for a property tax credit if all of the following apply:
- You own or were contracted to pay rent and occupied a Michigan homestead for at least 6 months during the year on which property taxes and/or service fees were levied. If you own your home, your taxable value was $135,000 or less (unless unoccupied farmland)
- Your total household resources were $60,000 or less (part year residents must annualize total household resources to determine if a credit reduction applies)
- If 100% of your total household resources were received from the Michigan Department of Health and Human Services, you do not qualify
How do I file a Michigan Homestead Property Tax Credit Claim MI-1040CR?
If you are required to file a Michigan Individual Income Tax return MI-1040, submit the Michigan Homestead Property Tax Credit Claim MI-1040CR with your MI-1040. If you are not required to file an MI-1040, you may file the MI-1040CR by itself. You have 4 years from the original due date to file your claim.
If you are active military, an eligible veteran, or the surviving spouse of a veteran, complete the MI-1040CR and the MI-1040CR-2, Michigan Homestead Property Tax Credit Claim for Veterans and Blind People. File the form that gives you the larger credit.
If you are blind and own your own home, complete the MI-1040CR and the MI-1040CR-2. File the form that gives you the larger credit. If you are blind and rent, you must use the MI-1040CR, you cannot use the MI-1040CR-2.
What taxes may be claimed?
Only taxes levied in the year of the claim may be used for credit no matter when they are paid. You may also include the administrative collection fees up to 1 percent.
Do not include:
- Delinquent property taxes
- Penalty and interest charges
- Delinquent water or sewer bills
- Property taxes on cottages or second homes
- Association dues on your property
- Most special assessments (including but not limited to solid waste fees
See www.michigan.gov for more information on the Homestead Credit