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Michigan Treasury Reminds Taxpayers About Property Tax Credit

Dated Apr. 9, 2021

SUMMARY BY TAX ANALYSTS

The Michigan Department of Treasury reminded homeowners and renters that they may qualify for the homestead property tax credit, which is available to families and individuals with annual household resources of $60,000 or less; eligible taxpayers may claim the credit on their state income tax return or file a claim by itself.

The department noted that unemployment compensation must be included when calculating household income for purposes of qualifying for the credit, even unemployment compensation that was excluded when calculating a taxpayer's adjusted gross income under the American Rescue Plan Act of 2021 (P.L. 117-2).

Working Families and Individuals Eligible for Homestead Property Tax Credit

April 8, 2021

Working families and individuals with household resources of $60,000 or less a year may be eligible for a Homestead Property Tax Credit, according to the Michigan Department of Treasury.

Michigan's Homestead Property Tax Credit can help taxpayers if they are a qualified homeowner or renter and meet certain requirements. For most people, the tax credit is based on a comparison between property taxes and total household income, with homeowners paying property taxes directly and renters paying them indirectly with their rent.

"Homestead Property Tax Credits provide tax relief for Michigan's working families and individuals," said Deputy State Treasurer Glenn White, head of Treasury's Revenue Services programs. "These tax credits can reduce tax owed and may provide a refund."

For the 2019 tax year, more than 1.1 million (or 1,172,000) taxpayers claimed the Homestead Property Tax Credit, totaling more than $784.8 million with an average credit at $669.

Taxpayers may claim a Homestead Property Tax Credit if ALL the following apply:

  • Your homestead is in Michigan

  • You were a resident of Michigan for at least six months during the year

  • You own or are contracted to pay rent and occupy a Michigan homestead on which property taxes were levied

  • If you own your home, your taxable value is $135,000 or less (unless unoccupied farmland) Your Total Household Resources are $60,000 or less

Taxpayers who are required to file a state income tax return should claim the Homestead Property Tax Credit with their return. Taxpayers may file a Homestead Property Tax Credit claim by itself.

Unemployment compensation — including the federal exclusion — is still included in a taxpayer's Total Household Resources. While the federal American Rescue Plan Act reduced Adjusted Gross Income and state tax liabilities, it doesn't reduce Total Household Resources.

To learn more about the Homestead Property Tax Credit and state income taxes, go to www.michigan.gov/incometax and click on "Credits and Exemptions" at the bottom of the page.

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