Renters

Determine the amount of property tax you can claim for credit:

1. Identify the number of months in the tax year that you lived in a mobile home park.
2. Multiply the number in step 1 by $3, for a maximum amount of $36. 
3. Subtract the total in step two from your yearly rent paid (MI-1040CR, line 11).
4. Multiply the figure in step 3 by 23% (MI-1040CR line 12).

If you are billed a separate specific property tax for attached buildings (carport, garage, tool shed, etc.) you may also include this in your computation. 

Adults sharing a homestead can file for a property tax credit.

Two or more adults are contracted to pay rent and occupy the same homestead:

Each person may claim the homestead property tax credit based solely on:

• the rent they paid; and
• their own THR.

One one adult is contracted to pay rent:

Only the individual contracted to pay rent may file a homestead property tax credit using the rent they paid and their THR. 

The individual claiming the credit must include any gifts of cash or expenses paid on their behalf. This includes contributions towards household expenses (rent, taxes, utilities, etc.) from others in the home. Exclude the first $300 gifted in the THR calculation.

Subsidized Housing

You may get some of your home costs subsidized by the government. Only claim the amount you pay in rent. Do not include:

• the amount you get from the federal or state government for housing costs.
• services billed to you; these are not considered rent and are not eligible.

  services include: food, housekeeping, and transportation.

You may be required to submit documentation verifying the amount of rent you paid. You can obtain this from the facility or your landlord.

Service Fee Housing (PILOT Agreement) 

The PILOT (payment in lieu of taxes) Agreement is a program that helps create available low-income housing. If you are unsure if you live in service fee housing, ask your landlord, check with your local assessor’s office, or view the service fee and tax exempt housing list. 

If you live in housing that is charged service fees instead of property taxes, then you would use 10% of the rent paid when computing your credit by completing part 5 of the MI-1040CR.

Adult Care Facilities - Nursing Homes, Homes for the Aged, and Adult Foster Care Homes

You will either base your credit on your rent or prorated share of property taxes.

Your Rent

Use part 4 of the MI-1040CR and your monthly rent amount. You may be required to submit proof from the facility that shows the amount of rent paid separate from other billings.

Your rent amount does not include other services such as supervision, meals, skilled care, housekeeping, etc.

Your Share of Prorated Property Taxes

Determine if you reside in a licensed or unlicensed facility.

Licensed Facility

To calculate your credit in a licensed facility:

1. Ask your facility for the total number of licensed beds and the property tax total.
2. Divide the total property taxes by the number of licensed beds in the home.

Subsidized Care in a Licensed Facility

If you receive subsided care, calculate your share of property taxes based on the lesser of:

• The amount you paid in care after the State of Michigan or federal agency paid their share, or

• Your share of property taxes, which are calculated by:

1. identifying the number of licensed beds at the facility;
2. identifying the total property taxes paid by the facility; and
3. dividing the property tax amount by the number of licensed beds.

Unlicensed Facility

Ask your facility for:

1. the square footage of the space you occupy, the total square footage of the property, and the total property taxes on the property.
2. Divide the square footage you occupy by the total square footage of the home.
3. Multiply the number in step 2 by the total property taxes.

Single Residents

If you live in one of the three adult care facilities and maintain a separate homestead, you may base your claim on either:

• the rent paid to the facility,
• your prorated share of the facilities property taxes; or
• the property taxes on your unrented homestead.

Use the one that gives you the largest credit.

Married Residents

If one spouse lives in an adult care facility and the other maintains a separate homestead, compute the homestead property tax credit claim by combining the taxes from the homestead and the rent of the facility on one form.

Ensure your rent does not include other services, such as supervision, meals, skilled care, housekeeping, etc.

Room and Board

For facilities that charge room and board, other than the three adult care facilities, base your claim on rent only. 

Do not include services such as meals in your calculation.

Paying room and board in itemized billings

Base the credit on rent paid by completing part 4 of the MI-1040CR; only claim your monthly rent amount.

You may be required to submit proof that shows the amount of rent paid separated from other billed expenses.

Paying room and board in one billing

Base the credit on your share of the property taxes on the home by completing part 5 of the MI-1040CR. If you are not provided with your share of the property taxes, then calculate it by:

1. Dividing the square footage you occupy by the total square footage of the home. 
2. Multiply total taxes by the result in step 1.

A housing cooperative is a corporation comprised of member shareholders. While members cannot claim ownership of the property per se, the shares they've purchased earn them the right to occupy a unit on the property.

To determine your homestead property tax credit, you will be provided a statement from the co-op showing your share of the property taxes. This information should be entered into part 5 of the MI-1040CR. 

If you pay rent on the land under the building, then you can also claim 23% of the land rent for the homestead property tax credit. This information should be entered into part 4 of the MI-1040CR. 

Do not take 23% of your total monthly payment.

If you are divorced and now filing as married filing separate consider the following scenarios:

Lived Together the Whole Year

If you and your spouse lived together the whole year, you are entitled to one homestead property tax credit. Determine which spouse will claim the credit and divide it as desired. Along with the MI-1040CR or MI-1040CR-2, the spouse claiming the credit will complete parts 1 and 2 of Form 5049, Worksheet for Married, Filing Separately and Divorced or Separated Claimants.

Base the homestead property tax credit on the THR of both spouses, meaning the spouse claiming the credit will enter the other spouse’s THR on the “other nontaxable income” line.

Lived Apart the Whole Year

If you and your spouse lived apart the whole year, you are each entitled to a property tax credit. Along with the MI-1040CR or MI-1040CR-2, each spouse will complete Part 3 of Form 5049, Worksheet for Married, Filing Separately and Divorced or Separated Claimants, explaining why they didn’t include the other spouse’s income. 

Base the homestead property tax credit on the following: 

• your personal THR; and
• your share of rent or property taxes.

Lived Together Part of the Year 

If you and your spouse lived together part of the year and maintained separate households for part of the year (divorce, separation, newly married etc.), submit the following:

• Form 5049, Worksheet for Married Filing Separately, Divorced or Separated Claimants and;
• Form 2105, Michigan Homestead Property Tax Credits for Separated or Divorced Taxpayers (if you co-owned and resided in the same home for part of the year)

To complete Form 2105, identify the following information:

• Each spouse’s prorated THR for the time they lived together.
• Each spouse’s prorated THR for the time they lived apart.
• The prorated property taxes or rent paid for when the spouses lived together.
• Each spouse’s own share of property tax or rent paid when the spouses lived apart.

For calculating the credit, enter the results of Form 2105, and each spouses own share of property taxes or rent paid when living apart on the MI-1040CR in their respective sections (part 3 for property taxes, part 4 for rent paid, part 5 for special housing).

If you married in the year you are filing, and file joint, you can claim a homestead property tax credit in the following way:

• Determine each spouse’s share of rent (if you were renting as a single person) or property taxes levied (if you owned your home as a single person) for the period you lived in separate households. Use Form 2105, Michigan Homestead Property Tax Credits for Separated or Divorced Taxpayers, as a tool for prorating, even if you are not divorced or separated.
• Add this amount to the rent or prorated taxes for the marital home after you were married.

If you are a renter who is 65 or older you may qualify for the alternate property tax credit.

Determine your property tax credit by:

• Completing the MI-1040CR through line 43.
• Completing Worksheet 5: Renters Over Age 65 Estimator.
• Enter the result of worksheet 5 on line 44 of the MI-1040CR.

To complete Worksheet 5 you will need:

• The result of line 42 of the MI-1040CR multiplied by the percentage on line 43 of the MI-1040CR;
• Total rent paid for the full year; and
• Total household resources, line 33 of the MI-1040CR.

If all of the following apply you may be eligible for a homestead property tax credit:

• You are a Michigan resident;
• You have a lease or rental agreement with non-university housing;
• Your THR do not exceed a certain amount; and
• Your THR do not solely consist of payments from the Michigan Department of Health and Human Services.

If you are a Michigan resident and attend college or university outside of Michigan, you cannot claim property taxes for the property you rent in another state.

College students with permanent homes outside of Michigan are not considered Michigan residents. Therefore, you do not qualify for the homestead property tax credit and should file a MI-1040 as a nonresident.

You may be entitled to a homestead property tax credit if you rent a home in Michigan.

You cannot rent and own in a home in Michigan simultaneously if you want to claim a homestead property tax credit as a renter.

Monthly payment amounts per the land contract are not considered rent.