Tax Exemption Program

Property Tax Relief:

Currently, there are several programs in place to assist low-income persons with their property taxes.  Senior citizens, veterans, surviving spouses of eligible veterans, and disabled persons may be eligible for larger tax relief.

Michigan Homestead Property Tax Credit Claim MI-1040CR:

This credit is part of the Michigan Income Tax booklet and has been in place since 1973.  The homestead credit is a program through which eligible taxpayers can receive a tax credit for an amount of their property tax that exceeds a certain percentage of their household income.  The credit is based on total household income, including nontaxable income.

The program establishes the following categories which homeowners or renters are eligible for property tax credits:

  1. Citizens age 65 and older and the surviving spouses of senior citizens.
  2. Paraplegic, hemiplegics and quadriplegic persons.
  3. Deaf and totally and permanently disabled persons who are not over age 65.
  4. Eligible veterans, active military personnel, blind persons and the surviving spouses of veterans.
  5. All other homeowners and renters.

Homeowners and renters who do not qualify for one of the special categories are granted a credit against their state income tax.  This credit is equal to 60% of the amount by which their property taxes exceed 3.5% of their household income.  Senior citizens and deaf, disabled, paraplegic, hemiplegics, or quadriplegic persons with household incomes of more than $3,000 receive a refund for all of their property taxes above the percentage of their household income as shown in the following chart:

2006
Household Income

Percentage of Household Income
Not Refundable

Not over $3,000

0%

$3,001 - $4,000

1.0%

$4,001 - $5,000

2.0%

$5,001 - $6,000

3.0%

$6,001 and over

3.5%

Renters can also apply.  In most cases, 20% of the rent paid is used for the property tax that can be claimed for credit.  There are some exceptions to the 20% figure.  For example, an applicant who lives in tax-exempt housing where no service fee is paid in lieu of taxes is not eligible to claim a credit.

The forms are part of the Michigan Income Tax Booklet and can also be found on the state’s website.

 

Michigan Home Heating Credit Claim MI-1040CR-7:

Although this credit does not relate to property taxes, it is another credit available for low-income persons to help pay their home heating costs.  The applicant’s homestead must be in Michigan.  The applicant must own or rent his/her home.  The applicant’s income must fall within the income limits listed in the instructions.  The State of Michigan bases this credit on total household income, including nontaxable income.

The forms are part of the Michigan Income Tax Booklet and can also be found on the state’s website.

 

Principal Residence Exemption of Property Taxes: 

Pursuant to MCL 211.7cc, eligible homeowners are exempt from paying 18 mills of school operating taxes.  To be eligible, the homeowner must both own and occupy his/her principal residence on May 1 each year.  The City Assessor’s office has forms and can assist taxpayers with questions about this exemption.
We used to call the Principal Residence Exemption a “homestead exemption.”  The Legislature change the exemption’s name to avoid confusion with the Michigan Homestead Property Tax Credit explained above.

 

Summer Property Tax Deferment:

Pursuant to MCL 211.51, senior citizens, disabled people, veterans, surviving spouses of veterans and farmers may be able to delay 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, without late penalties or interest.
(Download Application for Deferment of Summer Taxes )

It was the Legislature’s intent that a person with a deferment files his/her Michigan Homestead Property Tax Credit Claim early in January so he/she can receive his/her refund before the winter tax due date (February 14).  The taxpayer uses the refund to help pay his/her total tax amount.

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.

 

Poverty or Hardship Exemption: 

Pursuant to MCL 211.7u, eligible 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 reviews the applications.  The Board may also interview the applicant in order to determine eligibility, according to the local guidelines.
 

Eric R. Sabree
Wayne County Treasurer
(313) 224-5990

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