Homestead Property Tax for Seniors and Disabled (Circuit Breaker)

State

Michigan

Year

2022

Variations in Receipt of Benefit

Benefit Varies with Income

Minimum Tax Amount Must be Paid

Benefit Type

Circuit Breaker

Benefit

The benefit is a refundable income tax credit for senior and disabled homeowners and renters. The maximum credit for filing in 2022 is $1,500. The credit is normally 60% of the amount that property taxes exceed 3.2% of household income, but the benefit may be greater for qualified seniors and persons with disabilities. For seniors with an annual income up to $21,000, the credit is 100% of the amount above the 3.2% threshold. For those with an income between $21,000 and $30,000, each extra $1,000 of income reduces the amount by 4 percentage points until it reaches 60%. 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 an income between $5,001 and $6,000. The threshold level is further reduced by 1% for each $1,000 of income below $5,000. The threshold is 0% and applied to all property taxes for those with an income less than $3,000.

How is Benefit Disbursed

Credit to the income tax bill

Eligible Property Type

Residential

Characteristics of Eligible Property

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

Eligibility Criteria

Age

Disability

Homeowner

Income Ceiling

Principal Residence

Property Value Limit

Renter

Surviving Spouse

Description of Eligibility Criteria

To qualify for the senior homestead credit, applicants must be 65 years or older by 31 December in the year prior to filing, or the un-remarried spouse of a Michigan resident who was 65 years or older at the time of their death. To qualify for benefits as a disabled person, the applicant must be paraplegic, hemiplegic, quadriplegic, totally and permanently disabled, deaf, or blind. The taxable value of the property cannot exceed $136,600 and an applicant's household resources cannot exceed $60,600 for filing in 2022. 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. The claimant must have resided in Michigan for at least 6 months of the immediately preceding year in which the credit will apply. For claimants receiving assistance from the Department of Human Services, the credit is reduced by the assistance received relative to the total household resources.

Local Option in Adoption of Program

Local government is unable to exercise an option

Local Option Regarding Program Features

No local option regarding program features

State Funding for Local Tax Loss

State reimburses all of the local government tax loss

Description of State Funding for Tax Loss

The state provides the benefit directly to the taxpayer.

Record ID

MI106_RR22

Footnotes

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 the alternative credit, whichever is greater.

Sources

Mich. Comp. Laws § 206.520 ~ § 206.522 (in effect for 2022)
Michigan Department of Treasury, 2021 Michigan Homestead Property Tax Credit Claim, Form MI-1040CR (for filing in 2022)
[https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/2021-IIT-Forms/MI-1040CR.pdf?rev=679b265c5c3149bca3ee95d8fb5cce6f&hash=E11F38E3E24449344F010C10EAD61BC6 Accessed 10/27/2023]
View Archived Source

Michigan Department of Treasury, 2021 Form MI-1040CR Instructions (for filing in 2022)
[https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/2021-IIT-Forms/MI1040CR-Instructions.pdf?rev=9c642f0eb6724f92a145abf2371524e6&hash=41B2C6E0E9BC70D8DD22E9C1F05C8127 Accessed 10/27/2023]
View Archived Source

Michigan Department of Treasury, Checklist for Preparing a Homestead Property Tax Credit, Form MI-1040CR
[https://www.michigan.gov/documents/taxes/Checklist_Preparing_HPTC_1-2020_716015_7.pdf Accessed 10/27/2023]
View Archived Source

Michigan Department of Treasury, Checklist for Determining Total Household Resources
[https://www.michigan.gov/documents/taxes/ChecklistDetermineTHR_444822_7.pdf Accessed 10/27/2023]
View Archived Source
Michigan Department of Treasury, Homestead Property Tax Credit Information
[https://www.michigan.gov/taxes/0,4676,7-238-43535_43538-155081--,00.html Accessed 12/27/2023]
View Archived Source

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