Homestead Property Tax for Seniors and Disabled (Circuit Breaker)

Michigan

2021

Benefit Varies with Income

Minimum Tax Amount Must be Paid

Circuit Breaker

Homestead Property Tax Credit is a refundable credit for senior and disabled homeowners and renters available on a sliding scale based on income. The maximum credit is $1,500. For tax year 2020 (filing in 2021) the total credit is equal to 60% of the amount that property taxes exceed 3.2% of household income. For renters, property taxes are considered to be 23% of gross rent. The credit for disabled applicants with income above $6,001 is 100% of the amount above the 3.2% threshold. For seniors with incomes between $6,001 and $21,000, the credit is 100% of the amount above the 3.2% threshold. The credit is reduced by 4% for each additional $1,000 of income above $21,000 up to $30,000. Between $30,000 and $50,000, the credit is 60% of the amount above the threshold. The credit is reduced by 10% for each $1,000 of household income above $51,000 up to a maximum level of $60,000. For senior and disabled applicants with incomes of $6,000 or less, the threshold of 3.2% is reduced. The threshold level is 3.0% for both seniors and disabled with incomes between $5,001 and $6,000. The threshold level is further reduced by 1% for each $1,000 of income below $5,000. With incomes less than $3,000 the threshold is 0% and the credit is for all property taxes. An alternative credit is available to senior citizen renters. The credit is the amount that their rent exceeds 40% of their income, up to $1,500. They are eligible for either the Homestead or alternative credit whichever is greater.

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.

Age

Disability

Homeowner

Income Ceiling

Principal Residence

Property Value Limit

Renter

Surviving Spouse

To qualify for the senior homestead credit, applicants must be 65 years or older by 31 December in the year prior to filing, or be the unremarried spouse of a Michigan resident who was 65 years or older at their time of death. To qualify for benefits as a disabled person, the applicant must be paraplegic, hemiplegic, quadriplegic, totally and permanently disabled, deaf, or blind. 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 the 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.

MI106_RR21