Tax Exemption Programs
Property Tax Relief:
Currently, there are several programs in place to assist low-income people with their property taxes. Senior citizens, veterans, surviving spouses of eligible veterans, and disabled persons may be eligible for additional tax relief.
Michigan Homestead Property Tax Credit Claim MI-1040CR:
Michigan's homestead property tax credit program is a way the state of Michigan helps offset a portion of the property taxes paid by Michigan homeowners and renters. Homeowners pay property taxes directly and renters pay them indirectly with their rent. The credit, for most people, is based on a comparison between total household resources and the property taxes, rent, or other fees paid on a Michigan homestead.
What is a homestead?
The term "homestead" is defined as the place where an individual lives, whether it is owned or rented, and includes a mobile home or lot in a mobile home park. An individual may have only one homestead at any given time, and they must occupy the property for it to be considered their homestead. Permanent occupants of a nursing home, foster care home, or home for the aged that is subject to property taxes, may consider the facility as their homestead. Cottages, second homes, college dormitories and property you own and rent/lease to others do not qualify as a homestead.
Who is not eligible for the credit?
- Taxpayers with total household resources of more than $50,000.
- Taxpayers whose homestead has a taxable value greater than $135,000 (excluding the portion of a parcel of real property that is unoccupied and classified as agricultural).
- Persons whose total household resources consisted totally of Family Independence Program (FIP) assistance or Department of Health and Human Services (DHHS) benefits are not eligible for the credit. For persons who received a part of their income from these programs, their credit will be reduced by the percentage which their total household income was composed of FIP or DHHS benefits.
*Source: State of Michigan website
Property Tax Exemption:
Pursuant to MCL 211.7u, eligible low-income homeowners may apply for an exemption from property taxes. An eligible person must own and occupy his/her home as a principal residence (homestead) and meet poverty income standards. The local Board of Review may interview the applicant in order to determine eligibility, according to the local guidelines, and will review all applications.
An application is valid for one year, and you must re-apply each year for the exemption. Applications are available at your local assessor's office. For more information, contact your local assessor's office.
Homeowners Property Tax Assistance Program (HPTAP)
Available to residents of the city of Detroit only, Homeowners may be granted a full (100%) or partial (50%) exemption from their property taxes. Each applicant must own and occupy the property as his/her primary Homestead as of December 31, 2018 and meet specific income requirements.
Michigan Home Heating Credit Claim MI-1040CR-7:
The home heating tax credit is available to households that are at or near the poverty level as defined by the federal government. This credit is different from other credits in that its value must be applied to heating costs, and it is funded federally. The credit is available to renters or homeowners, including mobile home renters or owners, whose total household resources are at or below certain limits based on the number of exemptions the taxpayer is allowed. Household resources are calculated the same as for the homestead property tax credit. The number of exemptions that should be used to compute the credit includes a personal exemption for each person in the household. Additional exemptions are available for each person in the household who is disabled or is a qualified disabled veteran. Instead of receiving a credit against taxes owed, or a refund of money from the state, most people receiving the home heating credit receive an energy draft to use as payment toward current and future heating bills. Energy drafts can be used only to pay heating bills in the taxpayer's name and may not be cashed. For some people, the Michigan Department of Treasury will send their credit directly to their heating provider. Those whose heating costs are included in rent or whose heating services are in someone else's name will receive checks. Michigan residents can apply for the home heating credit by filling out form MI-1040CR-7. The home heating credit is available even for those who do not have to file a Michigan tax return. The home heating credit is available throughout the year.
Who may file a Home Heating Credit Claim?
You may claim a home heating credit if all of the following apply:
- You occupy a Michigan homestead
- You own your home or are contracted to pay rent
- You were NOT a full time student who was claimed as a dependent on another person's return
- You did NOT live in college or university operated housing for the entire year
- You did NOT live in a licensed care facility for the entire year
Michigan League for Public Policy:
The federal tax credits include the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), the Child and Dependent Care Credit and the American Opportunity Tax Credit. Michigan tax credits include the state Earned Income Tax Credit, the Home Heating Credit and the Michigan Homestead Property Credit. Some of these credits are available to individuals who are exempt from filing requirements. In addition, some credits are retroactive and can be claimed after the income tax filing deadline of April 15.
Money Back in Michigan
The PRE is a separate program from the Homestead Property Tax Credit, which is filed annually with your Michigan Individual Income Tax Return.
Summer Property Tax Deferment:
Pursuant to MCL 211.51, senior citizens, disabled people, veterans, surviving spouses of veterans and farmers may be able to postpone paying property taxes. Eligible taxpayers can apply for a summer tax deferment with the City Treasurer. If eligible, the taxpayer can delay paying his/her summer tax bill until his/her winter tax bill is due. Upon approval of a completed application, the State of Michigan will pay the entire unpaid balance of a special assessment including delinquent, current, and future installments. At the time of payment, a lien will be recorded against the property in favor of the State of Michigan. The lien will be subject to interest at one-half of 1 percent (.05) per month or fraction of a month (6 percent per year), when repaid to the State. The lien will be removed when the deferment, plus interest, is repaid by the taxpayer or the taxpayer's estate.
Download Application For Deferment Of Summer Taxes
The City Treasurer's office has forms and can assist taxpayers with questions about the summer tax deferment program. Persons eligible for a summer tax deferment must file by September 15 each tax year.