Michigan Farmland Preservation Tax Credit (Form MI-1040CR-5)

Michigan's Farmland Preservation Tax Credit is available to eligible taxpayers who own farmland subject to a qualifying preservation agreement and meet Michigan's eligibility requirements.

This credit is claimed using Form MI-1040CR-5, Farmland Preservation Tax Credit Claim.

Program Entry

Michigan Return → Credits → Farmland Preservation Tax Credit Claim (MI-1040CR-5)

Eligibility for the Farmland Preservation Tax Credit

Are You Eligible for the Farmland Preservation Tax Credit?

Before completing Form MI-1040CR-5, you must first complete one of the following Michigan credit forms:

• MI-1040CR - Homestead Property Tax Credit Claim
• MI-1040CR-2 - Homestead Property Tax Credit Claim for Veterans and Blind People
• MI-1040CR-7 - Home Heating Credit Claim

Select Yes if you qualify to claim the Farmland Preservation Tax Credit.

Select No if you do not qualify for the credit.

For more details, see our article here.

Homestead Property Taxes Not Included in Schedule CR-5

Are All Taxes That Qualify for a Homestead Property Tax Credit Included in the Total Taxes for All Agreements from Schedule CR-5?

If all qualifying property taxes are included on Schedule CR-5, select Yes.

If you select No, enter the taxes on your home and farmland that qualify for a property tax credit but are not covered by a Farmland Development Rights Agreement.

Depletion Allowance Claimed on Your Federal Return

Enter any depletion allowance deducted on your federal return.

This amount is used when calculating household income and determining the allowable credit.

Examples may include depletion deductions related to:

• Oil and gas interests
• Mineral interests
• Other qualifying natural resource activities

Signed Distribution Statement from Joint Owners

When Is This Required?

If farmland is owned jointly with a person other than your spouse, a distribution statement may be required to allocate ownership interests and income among the owners.

Select Begin to enter the required information.

Information Requested

The Signed Distribution Statement includes:

• Joint owner's name
• County code
• Contract number
• Year of expiration date
• Partner's Social Security Number
• Percentage of income attributable to the owner
• Percentage of ownership attributable to the owner

Percent of Income

Enter the owner's share of the income associated with the agreement.

For example:

• 100% = 100
• 50% = 50
• 25% = 25

Percent of Ownership

Enter the owner's percentage of ownership in the farmland agreement.

For example:

• 100% ownership = 100
• 50% ownership = 50

The percentages entered should reflect the ownership arrangement applicable to the farmland agreement.

Schedule CR-5 - Schedule of Taxes and Allocation to Each Agreement

Do You Want to Complete Schedule CR-5?

If you need to report information for one or more qualifying farmland agreements, select Yes.

If information is entered on Schedule CR-5, this question must be answered Yes for the entries to be included in the calculation.

Schedule CR-5 Agreement Information

Select Begin next to Schedule of Taxes and Allocation to Each Agreement (Schedule CR-5) to enter information for each qualifying agreement.

Type of Ownership

Select the ownership type that applies to the farmland agreement.

Examples may include:

• Individual ownership
• Joint ownership
• Partnership ownership
• Other ownership arrangements

County Code

Enter the county code associated with the farmland agreement.

The county code is part of the agreement information and helps identify the property location.

Contract Number

Enter the contract or agreement number exactly as shown on the Farmland Development Rights Agreement documentation.

Year of Expiration Date

Enter the year the agreement expires.

Use the expiration year listed on the applicable agreement documentation.

Total Taxable Value

Enter the total taxable value for the property associated with the agreement.

This amount is generally found on the property tax statement.

2024 or 2025 Paid Tax Receipts Attached?

Indicate whether copies of the applicable property tax receipts are attached.

Select:

• Yes if receipts are attached.
• No if receipts are not attached.

Percent of Income or Ownership

Enter the applicable percentage of income or ownership attributable to the agreement.

Do not enter more than three decimal places.

Total Tax for Each Agreement

Enter the total property tax associated with the agreement.

This amount is used in calculating the allowable Farmland Preservation Tax Credit.

How Does This Affect My Return?

The Farmland Preservation Tax Credit may:

• Reduce Michigan tax liability.
• Increase a Michigan refund.
• Provide property tax relief for qualifying farmland subject to preservation agreements.

Notes

• You must complete MI-1040CR, MI-1040CR-2, or MI-1040CR-7 before claiming the Farmland Preservation Tax Credit.
• Schedule CR-5 is used to report each qualifying farmland agreement separately.
• Joint owners may need to complete a Signed Distribution Statement.
• Keep copies of all property tax statements, tax receipts, agreements, and supporting documentation with your tax records.
• Information entered on Schedule CR-5 should match the applicable farmland agreement and property tax documentation.