How do I determine the amount of property taxes that are eligible for credit if my principal residence exemption (P.R.E.) percentage indicated on my tax statement is other than 100% or 0%?
If your property is less than 100% principal residence exemption (P.R.E.) but greater than 0% P.R.E., you must subtract the school operating tax, any special assessments and any penalty/interest charges from the total taxes levied. Multiply the remaining balance by the P.R.E. percentage indicated on your property tax statement to compute the taxes levied that can be claimed on your MI-1040CR.
Example using P.R.E. of 66%:
|Less School Operating||-$324|
|Less Special Assessment||-$45|
Total $1,785 (x) 66% (.66) of P.R.E. = $1,178
Taxes allowed for credit = $1,178