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Category: Michigan

Michigan Credits

Homestead Property Tax and Home Heating Credit

Homestead Property Tax Credit - You may claim a property tax credit if all of the following apply:

  1. Your homestead is located in Michigan.
  2. You were a Michigan resident at least six months of 2013.
  3. You pay property taxes or rent on your Michigan homestead.
  4. You were contracted to pay rent or own the home you live in.

You can have only one homestead at a time, and you must be the occupant as well as the owner or renter. Your homestead can be a rented apartment or a mobile home on a lot in a mobile home park. A vacation home or income property is not considered your homestead.

Your homestead is in your state of domicile. Domicile is the place where you have your permanent home. It is the place to which you plan to return whenever you go away. Even if you spend the winter in a southern state, you domicile is still Michigan. College students and others whose permanent homes are not in Michigan are not residents. Domicile continues until you establish a new permanent home.

Property tax credit claims may not be submitted on behalf of minor children.

You may not claim a property tax credit if your total household resources are over $50,000. In addition, you may not claim a property tax credit if your taxable value exceeds $135,000 (excluding vacant farmland classified as agricultural). The computed credit is reduced by 10 percent for every $1,000 (or part of $1,000) that total household resources exceed $41,000. If filing a part-year return, you must annualize total household resources to determine if the income limitation applies.

For additional information regarding the Homestead Property Tax Credit, please refer to Form MI-1040CR.

Home Heating Credit - This credit helps low income families pay their home heating costs. To see if you may claim a credit, answer the following questions:

  1. Are you a full-time student who is claimed as a dependent on another person’s income tax return?
  2. Did you live in a licensed care facility for the entire year?

If you answered yes to either of these questions, you cannot claim a home heating credit. If you answered no to both questions, you may claim a credit if:

  • Your homestead is in Michigan,
  • You own a home or have a lease agreement to pay rent for the home where you live,
  • You do not live in college or university-operated housing (including dorms, residence halls, or apartments)
  • Your income is within the limits in Tables A and B of the MI-1040 CR-7 instructions.

Homestead Property Tax Credit for Veterans and Blind People - You may claim a property tax credit if all of the following apply:

  • You were a Michigan resident at least six months of 2013.
  • Your homestead is located in Michigan.
  • You pay property taxes or rent your Michigan homestead.

You can have only one homestead at a time and you must be the occupant as well as the owner or renter. Your homestead can be a rented apartment or mobile home on a lot in a mobile home park. A vacation home or income property is not considered your homestead.

Who May File - You may file the MI-1040CR-2 if you are:

  • Blind and own your homestead
  • A veteran with a service-connected disability or veteran's surviving spouse
  • A surviving spouse of a veteran deceased in service
  • Active military, pensioned veteran or his or her surviving spouse whose household income is less than $7,500
  • A surviving spouse of a nondisabled or nonpensioned veteran of the Korean War, World War II or World War I whose household income is less than $7,500.

For additional information regarding the Homestead Property Tax Credit for Veterans and Blind People, please see MI-1040CR-2.

Energy Efficient Qualified Home Improvement Credit

Taxpayers must meet all of the following requirement to be eligible for this credit:

  1. Adjusted Gross Income is less than $37,501 (single or married, filing separately), or less than $75,001 (married, filing jointly).
  2. Home improvements were Energy Star rated.
  3. Home improvements were purchased by the taxpayer and installed in calendar year 2013.
  4. Home improvements were made to a taxpayer's principal residence. The credit is not available to renters, residents of a mobile home park, or for improvements made to a second home.
  5. Only specific items listed on lines 2 through 6 qualify for this credit on Form 4764.

Public Contributions Credit

A partial income tax credit can be claimed for donations to a qualifying Michigan public institution. The credit is based on cash or the value of the item(s) donated. Values claimed must be supported by written appraisals, trade journals, etc. or by an itemized receipt. Note: Gifts qualify for credit if given to:

  • Michigan colleges or universities and their fund-raising organizations
  • The Michigan Colleges Foundation
  • The State Art in Public Places Fund
  • The Michigan Historical Museum
  • Michigan public broadcasting stations
  • A Michigan municipality, or a nonprofit corporation affiliated with a Michigan municipality, for an art institute in that municipality or to benefit the art institute.
  • The State of Michigan for the preservation of State archives.

Artwork created by the taxpayer also qualifies for credit if given to:

  • The State of Michigan for display in a public place
  • A Michigan municipality for public display.

Artwork is an original visual creation of quality in any size or shape, in any media, using any materials. Its fair market value must be determined by an independent appraiser when donated.

Community Foundations Credit

A partial income tax credit can be claimed when you donate to an endowment fund of one of the certified community foundations or component funds. To see a list of Certified Community Foundations and Component Funds, please click here.

Homeless/Food Bank Cash Contribution

A partial income tax credit can be claimed when a donation is made by cash or check to a qualifying shelter for homeless persons, a food bank, a food kitchen, or other entity whose primary purpose is to provide overnight accommodation, food or meals to indigent persons. A partial income tax credit is also allowed for the cash value of donations of food made to any of these organizations but only if the donation is matched with similar food items by a retailer. Donations to organizations such as second hand stores and churches that provide other services or shelter and food as a secondary purpose do not qualify for this credit.

Vehicle Donation Credit

Taxpayers who donate automobiles to certain charities may claim a nonrefundable Michigan tax credit if the automobile is transferred by the charity to an individual for employment purposes. Donors must receive a Donor Tax Credit Certificate for Donated Vehicle (Form 4284) from a certified charitable organization to be able to claim the credit.

Renewable Energy Surcharge Credit

Credit is based on an itemized surcharge for renewable energy that may appear on residential electric bills. Customers of DTE Energy pay the maximum surcharge of $3 per month, customers of Consumers Energy pay $2.50 per month, and other utilities may impose the surcharge. Taxpayers may claim the credit only if the surcharge appears on their monthly utility bill. To be eligible for this credit, AGI must be no more than $65,000 for single/married filing separate of $130,000 for joint filers.

City Income Tax Credit

Everyone who pays Michigan income tax is allowed partial credit for income tax paid to Michigan cities. You will be required the enter the necessary information within your Michigan state return using TaxSlayer.

For additional information regarding Michigan Credits, please click here.