Homestead Property Tax Credit (Circuit Breaker)

Michigan

2018

Benefit Varies with Income

Minimum Tax Amount Must be Paid

Circuit Breaker

For tax year 2018 (filing in 2019), property taxes are considered to be 23% of gross rent paid. The total credit, not to exceed $1,500 is equal to 60% of the amount by which the property taxes exceed 3.2% of the claimant's household resources. The credit is phased out by 10% for each $1,000 of household resources that exceed $51,000. The credit is refundable to the extent that it exceeds income tax liability. Filers who are 65 or older may be eligible for Homestead Property Tax for Seniors and Disabled.

Credit to the income tax bill

Residential

Only residential properties are eligible for this program. Each claimant can only have one homestead which they must occupy.

Homeowner

Income Ceiling

Principal Residence

Property Value Limit

Renter

Taxable value of the property cannot exceed $135,000 through tax year 2021. Claimant must have resided in Michigan for at least 6 months of the immediately preceding year in which the credit will apply. An applicant's household resources cannot exceed $50,000 (for tax years before 2018). For tax years 2018 and beyond, household resources cannot exceed $60,000. Total household resources include all income (taxable and nontaxable) received by all adult household members during the year, including income that might be exempt from federal adjusted gross income. Net losses from business activity may not be used to reduce total household resources. For claimants receiving assistance from Department of Human Services, credit will be reduced by the percentage assistance is to total household resources.

Local government is unable to exercise an option

No local option regarding program features

State reimburses all of the local government tax loss

The state provides the benefit directly to the taxpayer. The credit is refundable.

MI102_RR18