The following credits are available to you on your Michigan return:
Homestead Property Tax Credit
You may claim a property tax credit if all of the following apply:
- Your homestead is located in Michigan
- You were a Michigan resident at least six months of 2023
- You own your homestead within Michigan and property taxes were levied in 2023, or, under a rental contract, you paid rent
You are only permitted one homestead at a time, and you must be the owner or renter, as well as the occupant. Your homestead can be a rented apartment, as well as a mobile home on a lot located within a mobile home park. Vacation homes and any income property is not considered your homestead.
Credit claims for property taxes may not be submitted on behalf of minors. If you are a filer that is claimed as a dependent on someone else's return, please refer to the instructions for Form MI-1040CR.
If your total household resources exceed $67,300 you may not claim a property tax credit. As well, you cannot claim a property tax credit if your taxable value exceeds $154,000 (this excludes vacant farmland classified as agricultural). The credit that is computed is reduced by 10% for every $1,000 (or part of $1,000) that the total household resources exceed $54,000. Individuals who are filing a part-year return must annualize their total household resources to determine if any income limitations apply.
Home Heating Credit
This credit is designed to help low income families pay for their home heating costs. You can determine if you are eligible to claim this credit by answering the following questions:
- Are you a full-time student who is claimed as a dependent on another person's tax return?
- Did you live in a licensed care facility for the full duration of the year?
If you answered 'Yes' to either of the questions listed above, you may not claim the home heating credit. If you answered 'No' to both questions, the following must be apply to you in order to be eligible to claim the credit:
- Your homestead must be in Michigan, and
- You must own a home or pay rent for the home where you live
- You cannot live in college or university housing (this includes dormitories, residence halls, and apartments)
- Your household resources must be within the income limits that are listed in Tables A and B
You can find additional information regarding this credit, here.
Credit for Taxes Paid to Another State
You may be eligible for the credit for taxes paid to another state if you paid income tax to any of the following government units outside of the state of Michigan:
- A nonreciprocal state
- A local government unit located outside of Michigan (this includes tax paid to local units located in reciprocal states)
- The District of Columbia
- A Canadian Province
You will only include income tax that you paid to another government unit(s) on income that you earned while you were a resident of Michigan and taxed by Michigan.
Within your account, the credit is automatically calculated when you enter a resident and nonresident return.
NOTE: If you are claiming a homestead property tax creditor home heating credit and you lived with your spouse, it maybe easier to file a joint Michigan return because joint total household resources are the basis for computing these credits.
**Exception: Reciprocal States
Residents of reciprocal states working in Michigan, do not have to pay Michigan tax on their salaries or wages earned in Michigan. The following states have a reciprocal agreement with Michigan: Illinois, Indiana, Kentucky, Minnesota, Ohio, and Wisconsin.
If a Michigan resident erroneously had income tax withheld for a reciprocal state on salaries and wages earned there, it is the Michigan resident's responsibility to file a nonresident tax return with that state to get a refund of the tax withheld in error.
To correctly file a return when reciprocity is involved, adjustments to the state returns must be made.
Farmland Preservation Tax Credit
The Farmland and Open Space Preservation Act Tax Credit is a credit for farmland owners to get back a share of the property tax paid on their farmland. Owners of farmland can qualify for this credit by agreeing to keep their land as farmland and not develop it for another use.
To qualify you must meet all of the following requirements:
- You own farmland, and
- You have entered into a Farmland Development Rights Agreement (FDRA) with the Michigan Department of Agriculture and Rural Development (MDARD)
Earned Income Tax Credit
If you are eligible to claim the Earned Income Tax Credit (EITC) on your federal tax return, you can claim an EITC for the state of Michigan equal to 30% of the federal credit.
To enter these credits within your account, follow the steps below:
- State Section
- Edit Michigan state return
For more information on these credits, please click here.