Homestead Property Tax for Seniors and Disabled (Circuit Breaker) (2024)

State

Michigan

Year

2018

Variations in Receipt of Benefit

Benefit Type

Circuit Breaker

Benefit

Homestead Property Tax Credit is a refundable credit for senior and disabled homeowners and renters available on a sliding scale based on income. The maximum credit is $1,500 in 2018 and $1,200 in 2017. For tax year 2018 (filing in 2019), the total credit is based on the amount of property taxes that exceed the threshold amount of 3.2% of household income. For renters, property taxes are considered to be 23% of gross rent (20% of the gross rent paid for tax years before 2018). The credit for disabled applicants with income above $6,001 is 100% of the amount above the 3.2% threshold. For seniors with incomes between $6,001 and $21,000, the credit is 100% of the amount above the 3.2% threshold. The credit is reduced by 4% for each additional $1,000 of income above $21,000 up to $30,000. Between $30,000 and $50,000, the credit is 60% of the amount above the threshold. The credit is reduced by 10% for each $1,000 of household income above $51,000 up to a maximum level of $60,000. Senior and disabled applicants with incomes of $6,000 or less, the threshold of 3.2% is reduced. The threshold level is 3.0% for both seniors and disabled with incomes between $5,001 and $6,000. The threshold level is further reduced by 1% for each $1,000 of income below $5,000. With incomes less than $3,000 the threshold is 0% and the credit is for all property taxes. An alternative credit is available to senior citizen renters. The credit is the amount that their rent exceeds 40% of their income, up to $1,500. They are eligible for either the Homestead or alternative credit whichever is greater. For tax year 2017 (filing in 2018), the threshold level is 3.5% and property taxes are considered to be 20%. The maximum income is $50,000 and the maximum benefit is $1,200. Other program characteristics are the same for tax years 2017 and 2018.

How is Benefit Disbursed

Credit to the income tax bill

Eligible Property Type

Residential

Characteristics of Eligible Property

Only residential properties are eligible for this program. Each claimant can only have one homestead which they must occupy.

Eligibility Criteria

Description of Eligibility Criteria

To qualify for the senior homestead credit, applicants must be 65 years or older by 31 December in the year prior to filing, or be the unremarried spouse of a Michigan resident who was 65 years or older at their time of death.To qualify for benefits as a disabled person, the applicant must be paraplegic, hemiplegic, quadriplegic, totally and permanently disabled, deaf, or blind.Taxable value of the property cannot exceed $135,000 through tax year 2021.Claimant must have resided in Michigan for at least 6 months of the immediately preceding year in which the credit will apply. An applicant's household resources cannot exceed $50,000 (for tax years before 2018). For tax years 2018 and beyond, household resources cannot exceed $60,000.Total household resources include all income (taxable and nontaxable) received by all adult household members during the year, including income that might be exempt from federal adjusted gross income. Net losses from business activity may not be used to reduce total household resources. For claimants receiving assistance from the Department of Human Services, credit will be reduced by the percentage assistance is to total household resources.

Local Option in Adoption of Program

Local government is unable to exercise an option

Local Option Regarding Program Features

No local option regarding program features

State Funding for Local Tax Loss

State reimburses all of the local government tax loss

Description of State Funding for Tax Loss

The state provides the benefit directly to the taxpayer.

Record ID

MI106_RR18

Footnotes

Effective tax year 2021 the taxable value cap will be adjusted by the percentage increase in the U.S. CPI for the immediately preceding calendar year and rounded to the next $100.00 increment.Effective 2018 for those who rent or lease can claim a credit based on 20% of gross rent paid for tax years before the 2018 tax year or 23% of the gross rent paid for tax years after the 2017 tax year.Effective 2018 the credit shall be reduced by 10% for each claimant whose total household resources exceed $51,000 and by an additional 10% for each increment of $1,000.00 of total household resources in excess of $51,000.Effective 2018 the maximum benefit is $1,500.00Effective 2018 the credit is equal to 60% of the amount by which the property taxes exceeds 3.2% of the claimant’s household resources. Changes in accordance with 2015 Mi. Laws Ch. 179 § 522

Sources