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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 2014.
  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 2014.
  • 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.

Farmland Preservation Tax Credit

The Farmland and Open Space Preservation Act Tax Credit gives farmland owners a portion of the property tax they paid.

To qualify, farmers must meet all the following requirements:

  • You own the farmland
  • You have entered into a Farmland Development Rights Agreement with the Michigan Department of Agriculture and Rural Development
  • You are eligible to file a MI-1040

For additional information regarding the Farmland Preservation Tax Credit, please review the instructions for form MI-1040CR-5.