Michigan Department of Treasury Form Instructions
MI-1040CR — Michigan Homestead Property Tax Credit Claim (instructions)
preamble
General Information - Homestead Property Tax Credit (MI-1040CR) The request for your Social Security number is authorized under USC Section 42. Social Security numbers are used by Treasury to conduct matches against benefit income provided by the Social Security Administration and other sources to verify the accuracy of the home heating and property tax credit claims filed for mandatory federal reporting requirements and to deter fraudulent filings. Who May Claim a Property Tax Credit Y ou may claim a property tax credit if all of the following apply: • Y our homestead is located in Michigan • Y ou were a Michigan resident at least six months of 2025 • Y ou own your Michigan homestead and property taxes were levied in 2025, or you paid rent under a rental contract. Y ou can have only one homestead at a time, and you must be the occupant as well as the owner or renter. Y our homestead can be a rented apartment or a mobile home on a lot in a mobile home park. A vacation home or income property is not considered your homestead. Y our homestead is in your state of domicile. Domicile is the place where you have your permanent home. It is the place to which you plan to return whenever you go away. College students and others whose permanent homes are not in Michigan are not Michigan residents. Domicile continues until you establish a new permanent home. Property tax credit claims may not be submitted on behalf of minor children. Filers claimed as a dependent on someone else's return see instructions for line 24 on page 32 to correctly report support received. You may not claim a property tax credit if your total household resources are over $71,500. In addition, you may not claim a property tax credit if your taxable value exceeds $165,400 (excluding vacant farmland classified as agricultural). The computed credit is reduced by 10 percent for every $1,000 (or part of $1,000) that total household resources exceed $62,500. If filing a part-year return, you must annualize total household resources to determine if the income limitation applies. See "Annualizing Total Household Resources" on page 28. Which Form to File Most filers should use the MI-1040CR in this booklet. If you are blind and own your homestead, are in the active military, are an eligible veteran, or an eligible veteran's surviving spouse, complete forms MI-1040CR and MI-1040CR-2 (available on Treasury's website.) Use the form that gives you a larger credit. If you are blind and rent your homestead, you cannot use the MI-1040CR-2. Claim your credit on the MI-1040CR and check box 5b if you are age 65 or younger. Check boxes 5a and 5b if you are blind and age 65 or older.
When to File
If you are not required to file an MI-1040, you may file your credit claim as soon as you know your 2025 total household resources and property taxes levied in 2025. If you file a Michigan income tax return, your credit claim should be included with your MI-1040 return and filed by April 15, 2026 to be considered timely. To avoid penalty and interest, if you owe tax, postmark your return no later than April 15, 2026. The filing deadline to receive a 2025 property tax credit is April 15, 2030. Amending Your Credit Claim File a new claim form and check the Amended Return box at the top of page 1 of the form; do not file a new MI-1040 or Schedule AMD. If applicable, include a copy of your property tax statement(s) and/or lease agreement. Yo u must file within four years of the date set for filing your original income tax return. Delaying Payment of Your Property Taxes Senior citizens, disabled people, veterans, surviving spouses of veterans, and farmers may be able to delay paying property taxes. Contact your local or county treasurer for more information. Total Household Resources Total household resources are the total income (taxable and nontaxable) of both spouses or of a single person maintaining a household. They are AGI, excluding net business and farm losses, net rent and royalty losses, and any carryover of a net operating loss, plus all income exempt or excluded from AGI. Total household resources must be sufficient to pay living expenses. If there are additional resources available that are not required to be included in total household resources, please provide an explanation and proof of these resources. Total household resources include the following items not listed on the form: • Capital gains on the sale of your residence regardless if the gains are exempt from federal income tax • Compensation for damages to character or for personal injury or sickness • An inheritance (except an inheritance from your spouse) • Proceeds of a life insurance policy paid on the death of the insured (except benefits from a policy on your spouse) • Death benefits paid by or on behalf of an employer • Minister's housing allowance • Forgiveness of debt, even if excluded from AGI (e.g., mortgage foreclosure) • Reimbursement from dependent care and/or medical care spending accounts • Scholarships, stipends, grants, and payments, except government payments, made directly to third parties such as an educational institution or subsidized housing project • Forgiven Paycheck Protection Program loans, include the amount of the forgiven loan reduced by business expenses related to payroll, rent and utilities that were not deducted in determining AGI.
Total household resources do NOT include: Do not include: • Net operating loss deductions taken on your federal return • Payments received by participants in the foster grandparent or senior companion program • Energy assistance grants • Government payments made directly to a third party (e.g., payments to a doctor, GI Bill benefits, payments from a PELL grant to the extent not included in AGI). NOTE: If payment is made from money withheld from your benefit, the payment is part of total household resources. (For example, the MDHHS may pay your rent directly to the landlord.) • Money received from a government unit to repair or improve your homestead • Surplus food or food assistance program benefits • State and city income tax refunds and homestead property tax credits • Chore service payments (these payments are income to the provider of the service) • The first $300 from gambling, bingo, lottery, awards, or prizes • The first $300 in gifts of cash or merchandise received, or expenses paid on your behalf (rent, taxes, utilities, food, medical care, etc.) by parents, relatives, or friends • Amounts deducted from Social Security or Railroad Retirement benefits for Medicare premiums • Life, health, and accident insurance premiums paid by your employer • Loan proceeds • Inheritance from a spouse • Life insurance benefits from a spouse • Payments from a long-term care policy made to a nursing home or other care facility • Most payments from The Step Forward Michigan program. • Compensation for wrongful imprisonment Visit www.michigan.gov/taxtotalhouseholdresources for more information on total household resources. Special Provisions for Farmers If you received a farmland preservation tax credit in 2025, you must include it in total household resources. Y ou may subtract the business portion of your homestead property tax credit if you included it in taxable farm income. Y our gross receipts from farming and your household income determine the taxes on unoccupied farmland classified as agriculture that you may include. (See the instructions for farmers on page 28.) Property Taxes Eligible for Credit Ad valorem property taxes that were levied on your homestead in 2025, including administrative collection fees up to 1 percent of the taxes, can be claimed no matter when you pay them. Y ou may add to your 2025 taxes the amount of property taxes billed in 2025 from a corrected or supplemental tax bill. Y ou must deduct from your 2025 property taxes any refund of property taxes received in 2025 that was a result of a corrected tax bill from a previous year. • Adjacent, contiguous property that is either: • Occupied, or • Classified as commercial, industrial, residential, or timber-cut over. • Delinquent property taxes (e.g., 2024 property taxes paid in 2025) • Penalty and interest on late payments of property tax • Delinquent water or sewer bills • Property taxes on cottages or second homes • Association dues on your property Most special assessments for drains, sewers, trash, and roads may not be included. Y ou may include special assessments only if all of the following are true: • The special assessments are either levied in the entire taxing jurisdiction or they are used to provide police, fire, or advanced life support services and are levied township-wide, except for all or a portion of a village, and • The special assessments are levied using a uniform millage rate based on taxable value. NOTE: School operating taxes are generally only levied on the non-homestead portion of the property and may not be included in taxes levied when computing the property tax credit on any portion of the home not used as your homestead. Taxes levied on property not eligible for either the principal residence or qualified agricultural property tax exemptions are not eligible for a homestead property tax credit. To compute the taxes that can be claimed for credit, exclude the school operating taxes and multiply the balance by the percentage of exemption allowed by the local taxing authority. If your property taxes are levied at the higher rate for nonprincipal residence and you own and occupy your home, you may be able to reduce your property taxes by filing the Principal Residence Exemption Affidavit ( F o r m 2 3 6 8 ) . Contact your local property assessor for additional information regarding how to claim the exemption. Home used for business. I f y o u u s e p a r t o f y o u r h o m e f o r business, you may claim the property taxes on the living area of your homestead, but not the property taxes on the portion used for business. Include a copy of U.S. Form 8829 with your Michigan return. Owner-occupied duplexes. W h e n b o t h u n i t s a r e e q u a l , you are limited to 50 percent of the tax on both units, after subtracting the school operating taxes from the total taxes billed. Owner-occupied income property. A p a r t m e n t b u i l d i n g a n d duplex owners who live in one of the units or single family homeowners who rent a room(s) to a tenant(s) must complete two calculations to figure the tax they can claim and base their credit on the lower a m o u n t . F i r s t , s u b t r a c t 2 3 p e r c e n t of the rent collected from the tax claimed for credit. Second, reduce the tax claimed for credit by the amount of tax claimed as rental expense on your federal return. Include a copy of the U.S. Schedule E with your Michigan return. Example: Y our home has an upstairs apartment that is rented
to a tenant for $395 per month. Total property taxes on your home are $2,150. Of this amount, $858 is claimed as rental expense. The calculations are as follows: Step 1: $395 x 12 = $4,740 annual rent $4,740 x 0.23 = $1,090 taxes attributable to the apartment $2,150 total taxes - $1,090 = $1,060 taxes attributable to owner's homestead Step 2: $2,150 total taxes - $858 taxes claimed as a business deduction = $1,292 taxes attributable to homestead Step 3: The owner's taxes that can be claimed for credit are $1,060, the smaller of the two computations. Farmers. Include farmland taxes in your property tax credit claim if any of the following conditions apply: • If your gross receipts from farming are greater than your household income, you may claim all of your taxes on unoccupied farmland classified as agricultural. Do not include taxes on farmland that is not adjacent or contiguous to your home and that you rent or lease to another person. • If gross receipts from farming are less than your household income and you have lived in your home more than ten years, you may claim the taxes on your home and the farmland adjacent and contiguous to your home. • If gross receipts from farming are less than your household income and you have lived in your home less than ten years, you may claim the taxes on your home and five acres of farmland adjacent and contiguous to your home. Y ou may not claim rent paid for vacant farmland when computing your property tax credit claim. Farmland owned by a business entity may not be claimed for a homestead property tax credit by one of the individual members. Include any farmland preservation tax credit in your total household resources. Enter the amount of credit you received in 2025 on line 20 or include it in net farm income on line 16. Homestead property tax credits are not included in total household resources. If you included this amount in your taxable farm income, subtract it from total household resources. Rent Eligible for Credit Y ou must be under a lease or rental contract to claim rent for credit. In most cases, 23 percent of rent paid is considered property tax that can be claimed for credit. The following are exceptions: • If you rent or lease housing subject to a service charge or fees paid instead of property taxes, you may claim a credit based upon 10 percent of the gross rent you paid. Enter this amount on line 55 and 10 percent of rent paid on line 56, and follow instructions. • If your housing is exempt from property tax and no service fee is paid, you are not eligible for a credit. This includes university- or college-owned housing. • I f your housing costs are subsidized, base your claim on the amount you pay. Do not include the federal subsidy amount. • If you are a mobile home park resident, claim the $3 per month specific property tax on line 10, and the balance of rent paid on line 11. • If you are a cooperative housing corporation resident member, claim your share of the property taxes on the building. If you live in a cooperative where residents pay rent on the land under the building, you may also claim 23 percent of that land rent. NOTE: Do not take 23 percent of your total monthly payment. • If you are a resident of a special housing facility (not noted above), base your claim on rent only. Do not include other services. If you pay rent with other services and you are unable to determine the portion that constitutes rent only, you may determine your portion of the property taxes that can be claimed for credit based on square footage, or, divide the taxes by the number of residents for whom the home is licensed to care. This information may be obtained from your housing facility. Visit www.michigan.gov/iit for more information about claimants living in special housing facilities. Example: Y ou pay $750 per month for room and board. Y ou occupy 600 square feet of a 62,000 square foot apartment building. The landlord pays $54,000 in taxes per year. Step 1: 600/62,000 = 0.0097 Step 2: $54,000 x 0.0097 = $524 taxes you can claim for credit Home used for business. If you use part of your apartment or rented home for business, you may claim the rent on the living area of your homestead, but not the rent on the portion used for business. If You Moved in 2025 Residents who temporarily lived outside Michigan may qualify for a credit if Michigan remained their state of domicile. Personal belongings and furnishings must have remained in the Michigan homestead and the homestead must not have been rented or sublet during the temporary absence. (See the definitions of resident on page 6 and domicile on page 25.) If you bought or sold your home or moved during 2025, you must prorate your taxes. Complete MI-1040CR, Part 3, to determine the taxes that can be claimed for credit. Use only the taxes levied in 2025 on each Michigan homestead, then prorate taxes based on days of occupancy. Do not include taxes on out-of-state property. Do not include property taxes for property with a taxable value greater than $165,400. Excluded from this restriction is unoccupied farmland classified as agricultural by your assessor. Part-Year Residents If you lived in Michigan at least six months during the year, you may be entitled to a partial credit. If you are a part-year resident, you must include all income received as a Michigan resident in total household resources (line 33). Complete
MI-1040CR, Part 3, to determine the taxes eligible to be claimed for credit on your Michigan homestead. Deceased Claimant's Credit The estate of a taxpayer who died in 2025 (or 2026 before filing a claim) may be entitled to a credit for 2025. The surviving spouse, other authorized claimant, or personal representative can claim this credit. Use the decedent's name and Social Security number and the personal representative's address. If the taxpayer died after December 31, 2024, enter the date of death in the "Deceased Taxpayer" box on page 3. The surviving spouse is considered married for the year in which the deceased spouse died and may file a joint credit for that year. Enter both names and Social Security numbers on the form, and write "DECD" after the decedent's name. Sign the return and write "filing as surviving spouse" in the deceased's signature line. Enter the date of death in the "Deceased Taxpayer" box on the bottom of page 3. Include the decedent's income in total household resources. If filing as a personal representative or claimant for the refund of a single deceased taxpayer, you must include a
Michigan Claim for Refund Due a Deceased Taxpayer
(MI-1310). Enter the decedent's name in the Filer's Name line and the representative's or claimant's name, title and address in the Home Address line. See the "Deceased Taxpayer Chart of Examples" on page 7. A claimant must prorate to the date of death as noted in the following paragraph. The personal representative or claimant claiming a credit for a single deceased person or on a jointly filed credit if both filers became deceased during the 2025 tax year, must prorate taxes to the date of death. Complete lines 47 through 51 to prorate the property taxes. Annualize total household resources (see instructions in the next section). Include a copy of the tax bills or lease agreements. If filing as a personal representative or claimant of deceased taxpayers for a jointly filed return, you must include a
Michigan Claim for Refund Due a Deceased Taxpayer
(MI-1310). Enter the name(s) of the deceased person(s) in the Filer's and/or Spouse's Name lines and the representative's or claimant's name, title, and address in the Home Address line. See "Deceased Taxpayer Chart of Examples" on page 7. Annualizing Total Household Resources If you are filing a part-year credit (for a deceased taxpayer or a part-year resident), you must annualize the total household resources to determine if the credit reduction applies. (Exception: the surviving spouse filing a joint claim does not have to annualize the deceased spouse's income.) • If you have checked a box on line 5 and your annualized total household resources are less than $6,000 use your annualized total household resources to determine your percentage of taxes not refundable from MI-1040CR Table 2 on page 32. • A senior, age 65 or older, filing a part-year credit must calculate annualized total household resources before using MI-1040CR Table A on page 32. • If the annualized income is more than $62,500 for any claimant, use annualized total household resources to determine the percentage allowable in MI-1040CR Table B on page 33. To annualize total household resources, which projects what it would have been for a full year:
Step 1: Divide 365 by the number of days the taxpayer was a
Michigan resident in 2025. Step 2: Multiply the answer from step 1 by the taxpayer's total household resources (MI-1040CR, line 33). The result is the annualized total household resources. Maximum Credit Limit for Deceased Taxpayers For most claimants, the maximum credit limit is $1,900. But, if you are filing a credit for a taxpayer who died during 2025, the maximum credit of $1,900 shall be reduced proportionately based on days of occupancy. T o reduce the maximum credit limit of $1,900 proportionately based on days of occupancy: Step 1: Divide the number of days of occupancy the taxpayer was a Michigan resident in 2025 by 365 days. Step 2: Multiply $ 1 ,900 by the result from Step 1 . The result is the maximum credit. Example: Jane passed away on June 30, 2025. Following the steps above, Jane determines her prorated maximum credit is $950. Step 1: 182 days / 365 days = 50% Step 2: $1,900 x 50% = $950 The prorated maximum credit replaces the maximum credit of $1,900 on the MI-1040CR, lines 38, 39 or 41 as well as Worksheets 4 and 5, where applicable. The lesser amount of the calculation or the prorated maximum credit must be used on these lines. Married During 2025 If you married during 2025, combine each spouse's share of taxes or rent for the period of time you lived in separate homesteads prior to getting married. Then add this to the prorated taxes or rent for your marital home after your marriage. Y ou are only allowed to claim rent and taxes on homesteads located in Michigan. Filing a Joint Return and Maintaining Separate Homesteads Your claim must be based on the tax or rent paid on only one home during a 12 month period. The total household resources must be the combined income of both you and your spouse for the entire year. Married Filing Separately and Divorced or Separated Claimants Schedule (Form 5049) This form can be found at www.michigan.gov/taxes. Submit Form 5049 with Form MI-1040CR, MI-1040CR-2 or MI-1040CR-7 if any of the following situations apply to you: • Y ou filed as married filing separately, and you and your spouse maintained separate homesteads all year. Complete only Part 3 of Form 5049. • Y ou filed as married filing separately, and you shared a homestead with your spouse all year.
• Y ou filed as married filing separately, and you and your spouse maintained separate homesteads at the end of the year. Filing Separate State Returns and Maintaining Separate Homesteads Spouses who file separate Michigan income tax returns and did not share a household during the tax year may each claim a credit. Each credit is based on the individual taxes or rent and individual total household resources for each person. This only applies to homes located in Michigan. They each must complete Form 5049 and provide an explanation in Part 3. Married Filing Separately and Shared a Homestead Spouses who file separate Michigan income tax returns but shared a homestead for the entire year are entitled to one property tax credit. The credit claim must be based on the total household resources of both spouses during the time the homestead was shared. A spouse claiming the credit must complete Form 5049 and include the total household resources for both spouses. A spouse filing the credit should also include the other spouse's income on the Other Nontaxable Income line of the Homestead Property Tax Credit Claim. Y ou and your spouse may choose how you want to divide the credit. If each spouse claims a portion of the credit, include a copy of the claim showing each spouse's share of the credit with each income tax return. Enter only your portion of the credit on your MI-1040CR, line 44. Separated or Divorced in 2025 Figure your credit based on the taxes you paid together before your separation plus the taxes you paid individually after your separation. Complete and include Form 5049 and include a schedule showing your computation. For more information or to help you calculate a prorated share of taxes, see Michigan Homestead Property Tax Credits for Separated or Divorced Taxpayers (Form 2105). Example: Karl and Cathy separated on October 2, 2025. The annual taxes on the home they owned were $1,860. Cathy continued to live in the home and Karl moved to an apartment on October 2 and paid $350 per month rent for the rest of the year. Cathy earned $20,000 and Karl earned $25,000. They lived together for 275 days. Step 1: Calculate the prorated total household resources for each spouse for the 275 days they lived together. Divide each spouse's total household resources by 365 days, then multiply that figure by 275. Cathy ($20,000/365) x 275 = $15,068 Karl ($25,000/365) x 275 = $18,836 Cathy and Karl must each complete Form 5049 and list income earned during the period they lived together. Step 2: Add both prorated total household resources together to determine the total for the time they lived together. $15,068 + $18,836 = $33,904 Step 3: Divide each individual's prorated share of total household resources by the total from Step 2 to determine the percentage attributable to each. Cathy $15,068/$33,904 = 44% Karl $18,836/$33,904 = 56% Step 4: Calculate the prorated taxes eligible for credit for the time they lived together. Divide the $1,860 by 365 days, then multiply by 275 days. ($1,860/365) x 275 = $1,401 Step 5: Calculate each individual's share of the prorated taxes. Multiply the $1,398 by the percentages determined in Step 3. Cathy $1,401 x 44% = $616 Karl $1,401 x 56% = $785 Enter these amounts on MI-1040CR, line 50, column B. Cathy uses lines 47 through 50, column A, to compute her share of taxes for the remaining 91 days. Karl uses lines 52 and 53 to compute his share of rent. Each completes the remaining lines of MI-1040CR according to the form instructions using only their individual total household resources to calculate their credit. Residents of Adult Care Homes Including Assisted Living Facilities If you are a resident of a nursing home, adult foster care home, or home for the aged; including assisted living facilities, that facility is considered your homestead. If the facility provides an itemized statement that separates rent from other services, base your credit on rent. If the facility does not provide an itemized statement and pays local property taxes (many do not), you may claim your portion of those taxes for credit. Ask the facility manager for your share of the taxes. If you wish to determine your share of the taxes yourself: • For a licensed facility, divide the amount of property taxes levied in 2025 by the number of residents for which the facility is licensed. • For an unlicensed facility, divide the square footage the claimant occupies by the square footage of the facility and multiply the result by the total property taxes levied on the facility. If both you and your spouse live in the facility, add your shares together. If you lived in the facility only part of the year, multiply this amount by the portion of the year you lived at the facility. Exception: Credit is not allowed if your care facility charges are paid directly to the facility by a government agency. If you maintain a homestead and your spouse lives in an adult care home, you may file a joint credit claim. Compute your claim using the tax on your homestead and your spouse's rent or share of the facility's property tax. If you are single and maintain a homestead (that is not rented) while living in an adult care home, you may claim either your homestead or your share of the facility's property tax, but not both. Use the one that gives you the larger credit. Single Adults Sharing a Home When two or more single adults share a home, each may file a credit claim if each was contracted to pay rent or owns a 30
share of the home. Each adult should file an individual claim taxes levied or rent paid, and prorated share of the taxable based on their total household resources, prorated share of value. Line-by-Line Instructions for Homestead Property Tax Credit (MI-1040CR) Lines not listed are explained on the form. Amended Return box: If amending your 2025 credit, check the box at the top of the form. See pages 8 and 26. Lines 1, 2, and 3: Enter your name(s), address, and full nine-digit Social Security number(s). If you are married filing separately, enter both Social Security numbers, but do not enter your spouse's name.
Line 5: Check the box that applies to you or your spouse as of
December 31, 2025, if any. If both boxes 5a and 5b apply, check both. Line 5a: Age 65 or older. This includes the unremarried surviving spouse of a person who was 65 or older at the time of death. Y ou are considered 65 the day before your 65th birthday. Line 5b: Deaf, blind, hemiplegic, paraplegic, quadriplegic, or totally and permanently disabled. • Deaf means the primary way you receive messages is through a sense other than hearing (e.g., lip reading or sign language) • Blind means your better eye permanently has 20/200 vision or less with corrective lenses, or your peripheral field of vision is 20 degrees or less. • Totally and permanently disabled means disabled as defined under Social Security Guidelines 42 USC 416. If you were age 66 by February 28, 2025, you may not file a claim as totally and permanently disabled. Line 6: Filing Status. C h e c k t h e b o x t o i d e n t i f y y o u r f i l i n g status. All couples who are married under the laws of the State of Michigan, or under the laws of another state, and are treated as married for federal tax purposes must claim either married filing jointly or married filing separately status on the property tax credit. If you file a joint federal return, you must file a joint property tax credit. If you filed married filing separately, you must include the total household resources of both spouses unless you maintained separate homesteads. If you filed your federal return as head of household or qualifying surviving spouse, file your property tax credit as single. Line 7: Residency. Check the box that describes your Michigan residency for 2025. If you and your spouse had a different residency status during the year, check a box for each of you. If you checked box c, enter the dates of Michigan residency in 2025. Property Tax Line 8: Homestead Status. C h e c k t h i s b o x i f t h e t a x a b l e value of your homestead includes unoccupied farmland classified as agricultural by your assessor. Line 9: If the taxable value of your homestead is greater than $165,400, STOP; you are not eligible for the homestead property tax credit. If your taxable value is less than $165,400, enter the 2025 taxable value from your 2025 property tax statement or assessment notice. If you do not know your taxable value, contact your local assessor. Farmers should include the taxable value of all land that qualifies for this credit (see instructions for farmers on page 28). Farmers should note that the $165,400 limit on taxable value does not apply to the taxable value on the portion of their homestead that is attributable to unoccupied farmland classified as agricultural. Line 10: Read "Property Taxes Eligible for Credit" on page 27 before you complete this line. Line 11: Read "Rent Eligible for Credit" on page 28 before you complete this line. Total Household Resources Include all taxable and nontaxable income you and your spouse received in 2025. If your family lived in Michigan and one spouse earned wages outside Michigan, include the income earned both in and out-of-state in your total household resources. (See "Total Household Resources," page 26.) Line 14: Enter all compensation received as an employee. Include strike pay, supplemental unemployment benefits (SUB pay), sick pay, or long-term disability benefits, including income protection insurance, and any other amounts reported to you on Form W-2.
Line 15: Do not include business dividend and interest income reported as a distributive share on your federal
Schedule K-1. See line 16 instructions. Line 16: Enter amounts to the extent included in AGI from: • U.S. Schedule C (Profit or Loss from Business). • Part II (Ordinary Gains and Losses) of the U.S. Form 4797. • Part II (Income or Loss from Partnerships and S Corporations) and Part III (Income or Loss from Estates and Trusts) of the U.S. Schedule E. • U.S. Schedule F (Profit or Loss from Farming). • Include income items reported as a distributive share. If the total is negative enter "0." Include amounts from sources outside Michigan. Include the above federal schedules with your claim. Line 17: Enter amounts to the extent included in AGI from: • Part I (Income or Loss from Rental Real Estate and Royalties) of the U.S. Schedule E. • Part IV (Income or Loss from Real Estate Mortgage Investment Conduits (REMIC)) of the U.S. Schedule E (rents, royalties). • Part V (Net farm rental income or (loss) from Form 4835) of the U.S. Schedule E. If the total is negative enter "0." Include amounts from sources outside Michigan. Include the above federal schedules with your claim.
Line 18: Enter all annuity, retirement, pension and individual retirement account (IRA) benefits. This should be the taxable amount shown on your U.S. Form 1099-R. If no taxable amount is shown on your U.S. Form 1099-R, use the amount required to be included in AGI. Enter "0" if all of your distribution is from your contributions made with income previously included in AGI. Include reimbursement payments such as an increase in a pension to pay for Medicare charges. Also include the total amount of any lump sum distribution including amounts reported on your U.S. Form 4972. Do not include recoveries of after-tax contributions or amounts rolled over into another plan (amounts rolled over into a Roth IRA must be included to the extent included in AGI). Y ou must include any part of a distribution from a Roth IRA that exceeds your total contributions to the Roth IRA regardless of whether this amount is included in AGI. Assume all contributions to the Roth IRA are withdrawn first. NOTE: Losses from Roth IRAs cannot be deducted. Line 19: Enter net capital gains and losses. This is the total of short-term and long-term gains, less short-term and long-term losses from your U.S. Schedule D (losses cannot exceed $3,000 if single or married filing jointly, or $1,500 if married filing separately). Include gains realized on the sale of your residence whether or not these gains are exempt from federal income tax. Line 20: Enter alimony received and other taxable income. Only include alimony received if due to a divorce granted prior to 2019. Other taxable income includes: awards, prizes, lottery, bingo, and other gambling winnings over $300; farmland preservation tax credits if not included in net farm income on line 16; and forgiveness of debt to the extent included in federal AGI (e.g., mortgage foreclosure).
Line 21: Enter all Social Security, Supplemental Security
Income (SSI), and/or Railroad Retirement benefits. Include death benefits and amounts received for minor children or other dependent adults who live with you. Report the amount actually received for the year. Medicare premiums reported on your Social Security or Railroad Retirement statement should be deducted. Line 22: Enter child support and all payments received as a foster parent. NOTE: If you received a 2025 Custodial Party End of Year Statement (FEN-851) showing child support payments paid to the Friend of the Court, enter the child support portion here and include a copy of the statement. See line 27 instructions. Line 23: Enter all unemployment compensation received during 2025. Line 24: Enter the value over $300 in gifts of cash or merchandise received, or expenses paid on your behalf (rent, taxes, utilities, food, medical care, etc.) by parents, relatives, or friends. This includes the amount of financial support you received if you are claimed as a dependent on someone else's return. Do not include government payments made directly to third parties such as an educational institution or subsidized housing project. Line 25: Enter other nontaxable income. This includes: • Nongovernmental scholarship, stipend or grant payments paid directly to an educational institution • Compensation for damages to character or for personal injury or sickness • An inheritance (except an inheritance from your spouse) • Proceeds of a life insurance policy paid on the death of the insured (except benefits from a policy on your spouse) • Death benefits paid by or on behalf of an employer • Minister's housing allowance • Forgiveness of debt to the extent not included in federal AGI (e.g., mortgage foreclosure) • Reimbursement from dependent care and/or medical care spending accounts • If you are married filing separately, include your spouse's income unless you maintained separate homesteads during the year. Complete and include Form 5049. Line 26: Enter workers' compensation, service-connected disability compensation and pension benefits from the Veterans Administration. Veterans receiving retirement benefits should enter the benefits on line 18. Line 27: Enter the total payments made to your household by MDHHS and all other public assistance payments such as state adoption subsidies. Y our 2025 Client Annual Statement (DHS-1241) mailed by MDHHS in January 2026 will show your total MDHHS payments. Y our statement(s) may include the following: Family Independence Program (FIP) assistance, State Disability Assistance (SDA), Refugee Assistance, Repatriate Assistance, and vendor payments for shelter, heat, and utilities. NOTE: If you received a 2025 FEN-851 (include a copy), subtract the amount of child support payments entered on line 22 from the total MDHHS payments and enter the difference here. Line 30: Enter total adjustments from your U.S. Form 1040, Schedule 1 . Describe adjustments to income. These adjustments reduce total household resources and include some of the following: • Payments to IRAs, SEP , SIMPLE, or qualified plans • Student loan interest deduction • Moving expenses incurred by members of the Armed Forces on active duty and, due to a military order, move into or within Michigan because of a permanent change in station. Moving expenses when moving out of Michigan cannot be included in "Other Adjustments" to reduce total household resources • Deduction for self-employment tax • Self-employed health insurance deduction • Penalty on early withdrawal of savings • Alimony paid if deductible on your U.S. Form 1040 • Jury duty pay you gave to your employer • Archer Medical Savings Account (MSA) deduction • Health Savings Account (HSA) deduction • Any other adjustments to gross income included on your 2025 U.S. Form 1040, Schedule 1 . This does not include Medicaid waiver payments.
PERCENT OF TAXES NOT REFUNDABLE ALL GENERAL CLAIMANTS
Income % of Income $0 - $71,500 ..................................... 3.2% OTHER CLAIMANTS * Income % of Income $3,000 or less ................................... 0% $3,001 - $4,000 ................................ 1% $4,001 - $5,000 ................................ 2% $5,001 - $6,000 ................................ 3% More than $6,000 ............................. 3.2% *Other claimants are senior citizens or people who are paraplegic, hemiplegic, quadriplegic, deaf, or totally and permanently disabled or unremarried spouse of an individual 65 or older. PART 1: Allowable Computation Based on Claimant Status Complete only Section A, B, or C, whichever applies to you. Senior claimants who checked only 5a complete Section A. Claimants who checked only 5b or checked both boxes 5a and 5b complete Section B. All other claimants complete Section C. Line 37: Enter the percentage from MI-1040CR Table A that applies to your total household resources from line 33. A senior, age 65 or older, filing a part-year credit must calculate annualized total household resources to determine the reduction percentage using MI-1040CR Table A. MI-1040CR TABLE A:
SENIOR CREDIT REDUCTION
Total Household Resources Percentage $21,000 or less........................... 100% (1.00) $21,001 - $22,000 ........................ 96% (0.96) $22,001 - $23,000 ........................ 92% (0.92) $23,001 - $24,000 ........................ 88% (0.88) $24,001 - $25,000 ........................ 84% (0.84) $25,001 - $26,000 ........................ 80% (0.80) $26,001 - $27,000 ....................... 76% (0.76) $27,001 - $28,000 ....................... 72% (0.72) $28,001 - $29,000 ........................ 68% (0.68) $29,001 - $30,000 ........................ 64% (0.64) $30,001 - $71,500 ........................ 60% (0.60) Line 42: If you checked only 5a enter the amount from line 38. If you checked only 5b or checked both 5a and 5b enter the amount from line 39. All others enter the amount from line 41. If you received FIP assistance or other MDHHS benefits in 2025, prorate your credit to reflect the ratio of income from other sources to total household resources. To prorate your credit use the information from your form to complete MI-1040CR Worksheet 4. MI-1040CR WORKSHEET 4: FIP/MDHHS BENEFITS A. Enter amount from line 27 (FIP and other MDHHS benefits) ..................... B. Enter amount from line 33 (Total Household Resources)...................... C. Subtract line A from line B (if amount is a negative value, enter "0") D. Divide line C by line B and enter percentage here ................................ E. If you checked only box 5a, enter the amount from line 38. If you checked box 5b, enter the amount from line 39. All others, enter the amount from line 41 here (maximum $1,900) .............................................. F. Multiply line E by line D. ENTER here and on your MI-1040CR, line 42 * NOTE: If you are age 65 or older and you rent your home, see Worksheet 5. MI-1040CR TABLE B:
HOMESTEAD PROPERTY TAX CREDIT PHASE OUT
Total Household Resources Percentage $62,500 or less...............................100% (1.00) $62,501 - $63,500 ............................90% (0.90) $63,501 - $64,500 ............................80% (0.80) $64,501 - $65,500 ............................70% (0.70) $65,501 - $66,500 ............................60% (0.60) $66,501 - $67,500 ............................50% (0.50) $67,501 - $68,500 ............................40% (0.40) $68,501 - $69,500 ........................... 30% (0.30) $69,501 - $70,500 ........................... 20% (0.20) $70,501 - $71,500 ............................10% (0.10) $71,501 or above ...............................0% (0.00)
Line 43: The computed credit is reduced by 10 percent for every $1,000 (or part of $1,000) that your total household resources exceed $62,500. Enter the percentage from MI-1040CR Table B that applies to your total household resources from line 33. NOTE: If you are filing a part-year credit and the annualized income is more than $62,500, use annualized total household resources to determine the percentage allowable in MI-1040CR Table B. Alternate Property Tax Credit for Renters Age 65 or Older If you are a senior renter age 65 or older you may qualify for the Alternate Property Tax Credit. Complete MI-1040CR Worksheet 5 to determine if you qualify. Visit www.michigan.gov/iit for help calculating the Alternate Property Tax Credit for Renters Age 65 or Older. MI-1040CR Worksheet 5, Line B: Enter rent paid from line 53 and/or line 55. If you moved from one rental homestead to another during the last two years (also see "If Y ou Moved in 2025" on page 28), enter smaller of: • The final month's rent on your previous rented homestead multiplied by 12 , or • The actual rent paid from line 53 and/or line 55. MI-1040CR WORKSHEET 5: ALTERNATE PROPERTY TAX CREDIT FOR RENTERS AGE 65 AND OLDER A. Enter the amount from line 42 or, if line 33 exceeds $62,500, line 42 multiplied by line 43. ............................... B. Enter rent paid from line 53 and/or line 55................................................... C. Multiply amount on line 33 by 40% (0.40) and enter here............................ D. Subtract line C from line B. If line C is more than line B, enter "0".................... E. Enter the larger of line A or line D here and carry amount to your MI-1040CR, line 44 (maximum $1,900).................... PART 4: Renters See "Rent Eligible for Credit" on page 28. Line 52: If you rented a Michigan homestead subject to local property taxes, enter the street number and name, city, landlord's name and address, number of months rented, rent paid per month, and total rent paid. Do this for each Michigan homestead rented during 2025 and for each time rental amounts changed. If you need more space, include an additional sheet. Do not include more than 12 months' rent. If you married during 2025, see page 29. Do not include amounts paid directly to the landowner on your behalf by a government agency, unless payment is made with money withheld from your benefit. If you pay lot rent on your mobile home, subtract the $3 per month specific property tax from the monthly rent amount. Claim the remaining balance of rent on lines 52, 53 and on line 11. If you lived in a special housing facility (other than cooperative housing) and received an itemized statement from your landlord that separates rent from other services (such as food), report rent on this line. PART 5: Alternate Housing Facilities If you are completing lines 54 through 57, you must also complete line 58. Line 54: If your housing costs are subsidized, check box 54a and enter the total amount of rent you paid on line 55 and on line 11. Do not include amounts paid on your behalf by a government agency. Complete lines 12 through 44 to calculate your credit. If you lived in Service Fee Housing (even if it was subsidized housing), check box 54b and enter the amount of rent you paid on line 55. Do not include amounts paid on your behalf by a government agency. Enter 10 percent of the rent on lines 56 and 10 (as property taxes), and complete lines 13 through 44 to calculate your credit. Line 57: If you lived in one of the special housing facilities identified and rent is not itemized, check the appropriate box and calculate your prorated share of property taxes. If you lived in a special housing facility (other than cooperative housing) and received an itemized statement from your landlord that separates rent from other services, do not complete line 57 since rent is reported on line 52. See "Rent Eligible for Credit" and "Residents of Adult Care Homes including Assisted Living Facilities" on pages 28 and 30, respectively
General Information - Homestead Property Tax Credit (MI-1040CR) The request for your Social Security number is authorized under USC Section 42. Social Security numbers are used by Treasury to conduct matches against benefit income provided by the Social Security Administration and other sources to verify the accuracy of the home heating and property tax credit claims filed for mandatory federal reporting requirements and to deter fraudulent filings. Who May Claim a Property Tax Credit Y ou may claim a property tax credit if all of the following apply: • Y our homestead is located in Michigan • Y ou were a Michigan resident at least six months of 2025 • Y ou own your Michigan homestead and property taxes were levied in 2025, or you paid rent under a rental contract. Y ou can have only one homestead at a time, and you must be the occupant as well as the owner or renter. Y our homestead can be a rented apartment or a mobile home on a lot in a mobile home park. A vacation home or income property is not considered your homestead. Y our homestead is in your state of domicile. Domicile is the place where you have your permanent home. It is the place to which you plan to return whenever you go away. College students and others whose permanent homes are not in Michigan are not Michigan residents. Domicile continues until you establish a new permanent home. Property tax credit claims may not be submitted on behalf of minor children. Filers claimed as a dependent on someone else's return see instructions for line 24 on page 32 to correctly report support received. You may not claim a property tax credit if your total household resources are over $71,500. In addition, you may not claim a property tax credit if your taxable value exceeds $165,400 (excluding vacant farmland classified as agricultural). The computed credit is reduced by 10 percent for every $1,000 (or part of $1,000) that total household resources exceed $62,500. If filing a part-year return, you must annualize total household resources to determine if the income limitation applies. See "Annualizing Total Household Resources" on page 28. Which Form to File Most filers should use the MI-1040CR in this booklet. If you are blind and own your homestead, are in the active military, are an eligible veteran, or an eligible veteran's surviving spouse, complete forms MI-1040CR and MI-1040CR-2 (available on Treasury's website.) Use the form that gives you a larger credit. If you are blind and rent your homestead, you cannot use the MI-1040CR-2. Claim your credit on the MI-1040CR and check box 5b if you are age 65 or younger. Check boxes 5a and 5b if you are blind and age 65 or older.
When to File
If you are not required to file an MI-1040, you may file your credit claim as soon as you know your 2025 total household resources and property taxes levied in 2025. If you file a Michigan income tax return, your credit claim should be included with your MI-1040 return and filed by April 15, 2026 to be considered timely. To avoid penalty and interest, if you owe tax, postmark your return no later than April 15, 2026. The filing deadline to receive a 2025 property tax credit is April 15, 2030. Amending Your Credit Claim File a new claim form and check the Amended Return box at the top of page 1 of the form; do not file a new MI-1040 or Schedule AMD. If applicable, include a copy of your property tax statement(s) and/or lease agreement. Yo u must file within four years of the date set for filing your original income tax return. Delaying Payment of Your Property Taxes Senior citizens, disabled people, veterans, surviving spouses of veterans, and farmers may be able to delay paying property taxes. Contact your local or county treasurer for more information. Total Household Resources Total household resources are the total income (taxable and nontaxable) of both spouses or of a single person maintaining a household. They are AGI, excluding net business and farm losses, net rent and royalty losses, and any carryover of a net operating loss, plus all income exempt or excluded from AGI. Total household resources must be sufficient to pay living expenses. If there are additional resources available that are not required to be included in total household resources, please provide an explanation and proof of these resources. Total household resources include the following items not listed on the form: • Capital gains on the sale of your residence regardless if the gains are exempt from federal income tax • Compensation for damages to character or for personal injury or sickness • An inheritance (except an inheritance from your spouse) • Proceeds of a life insurance policy paid on the death of the insured (except benefits from a policy on your spouse) • Death benefits paid by or on behalf of an employer • Minister's housing allowance • Forgiveness of debt, even if excluded from AGI (e.g., mortgage foreclosure) • Reimbursement from dependent care and/or medical care spending accounts • Scholarships, stipends, grants, and payments, except government payments, made directly to third parties such as an educational institution or subsidized housing project • Forgiven Paycheck Protection Program loans, include the amount of the forgiven loan reduced by business expenses related to payroll, rent and utilities that were not deducted in determining AGI.
Total household resources do NOT include: Do not include: • Net operating loss deductions taken on your federal return • Payments received by participants in the foster grandparent or senior companion program • Energy assistance grants • Government payments made directly to a third party (e.g., payments to a doctor, GI Bill benefits, payments from a PELL grant to the extent not included in AGI). NOTE: If payment is made from money withheld from your benefit, the payment is part of total household resources. (For example, the MDHHS may pay your rent directly to the landlord.) • Money received from a government unit to repair or improve your homestead • Surplus food or food assistance program benefits • State and city income tax refunds and homestead property tax credits • Chore service payments (these payments are income to the provider of the service) • The first $300 from gambling, bingo, lottery, awards, or prizes • The first $300 in gifts of cash or merchandise received, or expenses paid on your behalf (rent, taxes, utilities, food, medical care, etc.) by parents, relatives, or friends • Amounts deducted from Social Security or Railroad Retirement benefits for Medicare premiums • Life, health, and accident insurance premiums paid by your employer • Loan proceeds • Inheritance from a spouse • Life insurance benefits from a spouse • Payments from a long-term care policy made to a nursing home or other care facility • Most payments from The Step Forward Michigan program. • Compensation for wrongful imprisonment Visit www.michigan.gov/taxtotalhouseholdresources for more information on total household resources. Special Provisions for Farmers If you received a farmland preservation tax credit in 2025, you must include it in total household resources. Y ou may subtract the business portion of your homestead property tax credit if you included it in taxable farm income. Y our gross receipts from farming and your household income determine the taxes on unoccupied farmland classified as agriculture that you may include. (See the instructions for farmers on page 28.) Property Taxes Eligible for Credit Ad valorem property taxes that were levied on your homestead in 2025, including administrative collection fees up to 1 percent of the taxes, can be claimed no matter when you pay them. Y ou may add to your 2025 taxes the amount of property taxes billed in 2025 from a corrected or supplemental tax bill. Y ou must deduct from your 2025 property taxes any refund of property taxes received in 2025 that was a result of a corrected tax bill from a previous year. • Adjacent, contiguous property that is either: • Occupied, or • Classified as commercial, industrial, residential, or timber-cut over. • Delinquent property taxes (e.g., 2024 property taxes paid in 2025) • Penalty and interest on late payments of property tax • Delinquent water or sewer bills • Property taxes on cottages or second homes • Association dues on your property Most special assessments for drains, sewers, trash, and roads may not be included. Y ou may include special assessments only if all of the following are true: • The special assessments are either levied in the entire taxing jurisdiction or they are used to provide police, fire, or advanced life support services and are levied township-wide, except for all or a portion of a village, and • The special assessments are levied using a uniform millage rate based on taxable value. NOTE: School operating taxes are generally only levied on the non-homestead portion of the property and may not be included in taxes levied when computing the property tax credit on any portion of the home not used as your homestead. Taxes levied on property not eligible for either the principal residence or qualified agricultural property tax exemptions are not eligible for a homestead property tax credit. To compute the taxes that can be claimed for credit, exclude the school operating taxes and multiply the balance by the percentage of exemption allowed by the local taxing authority. If your property taxes are levied at the higher rate for nonprincipal residence and you own and occupy your home, you may be able to reduce your property taxes by filing the Principal Residence Exemption Affidavit ( F o r m 2 3 6 8 ) . Contact your local property assessor for additional information regarding how to claim the exemption. Home used for business. I f y o u u s e p a r t o f y o u r h o m e f o r business, you may claim the property taxes on the living area of your homestead, but not the property taxes on the portion used for business. Include a copy of U.S. Form 8829 with your Michigan return. Owner-occupied duplexes. W h e n b o t h u n i t s a r e e q u a l , you are limited to 50 percent of the tax on both units, after subtracting the school operating taxes from the total taxes billed. Owner-occupied income property. A p a r t m e n t b u i l d i n g a n d duplex owners who live in one of the units or single family homeowners who rent a room(s) to a tenant(s) must complete two calculations to figure the tax they can claim and base their credit on the lower a m o u n t . F i r s t , s u b t r a c t 2 3 p e r c e n t of the rent collected from the tax claimed for credit. Second, reduce the tax claimed for credit by the amount of tax claimed as rental expense on your federal return. Include a copy of the U.S. Schedule E with your Michigan return. Example: Y our home has an upstairs apartment that is rented
to a tenant for $395 per month. Total property taxes on your home are $2,150. Of this amount, $858 is claimed as rental expense. The calculations are as follows: Step 1: $395 x 12 = $4,740 annual rent $4,740 x 0.23 = $1,090 taxes attributable to the apartment $2,150 total taxes - $1,090 = $1,060 taxes attributable to owner's homestead Step 2: $2,150 total taxes - $858 taxes claimed as a business deduction = $1,292 taxes attributable to homestead Step 3: The owner's taxes that can be claimed for credit are $1,060, the smaller of the two computations. Farmers. Include farmland taxes in your property tax credit claim if any of the following conditions apply: • If your gross receipts from farming are greater than your household income, you may claim all of your taxes on unoccupied farmland classified as agricultural. Do not include taxes on farmland that is not adjacent or contiguous to your home and that you rent or lease to another person. • If gross receipts from farming are less than your household income and you have lived in your home more than ten years, you may claim the taxes on your home and the farmland adjacent and contiguous to your home. • If gross receipts from farming are less than your household income and you have lived in your home less than ten years, you may claim the taxes on your home and five acres of farmland adjacent and contiguous to your home. Y ou may not claim rent paid for vacant farmland when computing your property tax credit claim. Farmland owned by a business entity may not be claimed for a homestead property tax credit by one of the individual members. Include any farmland preservation tax credit in your total household resources. Enter the amount of credit you received in 2025 on line 20 or include it in net farm income on line 16. Homestead property tax credits are not included in total household resources. If you included this amount in your taxable farm income, subtract it from total household resources. Rent Eligible for Credit Y ou must be under a lease or rental contract to claim rent for credit. In most cases, 23 percent of rent paid is considered property tax that can be claimed for credit. The following are exceptions: • If you rent or lease housing subject to a service charge or fees paid instead of property taxes, you may claim a credit based upon 10 percent of the gross rent you paid. Enter this amount on line 55 and 10 percent of rent paid on line 56, and follow instructions. • If your housing is exempt from property tax and no service fee is paid, you are not eligible for a credit. This includes university- or college-owned housing. • I f your housing costs are subsidized, base your claim on the amount you pay. Do not include the federal subsidy amount. • If you are a mobile home park resident, claim the $3 per month specific property tax on line 10, and the balance of rent paid on line 11. • If you are a cooperative housing corporation resident member, claim your share of the property taxes on the building. If you live in a cooperative where residents pay rent on the land under the building, you may also claim 23 percent of that land rent. NOTE: Do not take 23 percent of your total monthly payment. • If you are a resident of a special housing facility (not noted above), base your claim on rent only. Do not include other services. If you pay rent with other services and you are unable to determine the portion that constitutes rent only, you may determine your portion of the property taxes that can be claimed for credit based on square footage, or, divide the taxes by the number of residents for whom the home is licensed to care. This information may be obtained from your housing facility. Visit www.michigan.gov/iit for more information about claimants living in special housing facilities. Example: Y ou pay $750 per month for room and board. Y ou occupy 600 square feet of a 62,000 square foot apartment building. The landlord pays $54,000 in taxes per year. Step 1: 600/62,000 = 0.0097 Step 2: $54,000 x 0.0097 = $524 taxes you can claim for credit Home used for business. If you use part of your apartment or rented home for business, you may claim the rent on the living area of your homestead, but not the rent on the portion used for business. If You Moved in 2025 Residents who temporarily lived outside Michigan may qualify for a credit if Michigan remained their state of domicile. Personal belongings and furnishings must have remained in the Michigan homestead and the homestead must not have been rented or sublet during the temporary absence. (See the definitions of resident on page 6 and domicile on page 25.) If you bought or sold your home or moved during 2025, you must prorate your taxes. Complete MI-1040CR, Part 3, to determine the taxes that can be claimed for credit. Use only the taxes levied in 2025 on each Michigan homestead, then prorate taxes based on days of occupancy. Do not include taxes on out-of-state property. Do not include property taxes for property with a taxable value greater than $165,400. Excluded from this restriction is unoccupied farmland classified as agricultural by your assessor. Part-Year Residents If you lived in Michigan at least six months during the year, you may be entitled to a partial credit. If you are a part-year resident, you must include all income received as a Michigan resident in total household resources (line 33). Complete
MI-1040CR, Part 3, to determine the taxes eligible to be claimed for credit on your Michigan homestead. Deceased Claimant's Credit The estate of a taxpayer who died in 2025 (or 2026 before filing a claim) may be entitled to a credit for 2025. The surviving spouse, other authorized claimant, or personal representative can claim this credit. Use the decedent's name and Social Security number and the personal representative's address. If the taxpayer died after December 31, 2024, enter the date of death in the "Deceased Taxpayer" box on page 3. The surviving spouse is considered married for the year in which the deceased spouse died and may file a joint credit for that year. Enter both names and Social Security numbers on the form, and write "DECD" after the decedent's name. Sign the return and write "filing as surviving spouse" in the deceased's signature line. Enter the date of death in the "Deceased Taxpayer" box on the bottom of page 3. Include the decedent's income in total household resources. If filing as a personal representative or claimant for the refund of a single deceased taxpayer, you must include a
Michigan Claim for Refund Due a Deceased Taxpayer
(MI-1310). Enter the decedent's name in the Filer's Name line and the representative's or claimant's name, title and address in the Home Address line. See the "Deceased Taxpayer Chart of Examples" on page 7. A claimant must prorate to the date of death as noted in the following paragraph. The personal representative or claimant claiming a credit for a single deceased person or on a jointly filed credit if both filers became deceased during the 2025 tax year, must prorate taxes to the date of death. Complete lines 47 through 51 to prorate the property taxes. Annualize total household resources (see instructions in the next section). Include a copy of the tax bills or lease agreements. If filing as a personal representative or claimant of deceased taxpayers for a jointly filed return, you must include a
Michigan Claim for Refund Due a Deceased Taxpayer
(MI-1310). Enter the name(s) of the deceased person(s) in the Filer's and/or Spouse's Name lines and the representative's or claimant's name, title, and address in the Home Address line. See "Deceased Taxpayer Chart of Examples" on page 7. Annualizing Total Household Resources If you are filing a part-year credit (for a deceased taxpayer or a part-year resident), you must annualize the total household resources to determine if the credit reduction applies. (Exception: the surviving spouse filing a joint claim does not have to annualize the deceased spouse's income.) • If you have checked a box on line 5 and your annualized total household resources are less than $6,000 use your annualized total household resources to determine your percentage of taxes not refundable from MI-1040CR Table 2 on page 32. • A senior, age 65 or older, filing a part-year credit must calculate annualized total household resources before using MI-1040CR Table A on page 32. • If the annualized income is more than $62,500 for any claimant, use annualized total household resources to determine the percentage allowable in MI-1040CR Table B on page 33. To annualize total household resources, which projects what it would have been for a full year:
Step 1: Divide 365 by the number of days the taxpayer was a
Michigan resident in 2025. Step 2: Multiply the answer from step 1 by the taxpayer's total household resources (MI-1040CR, line 33). The result is the annualized total household resources. Maximum Credit Limit for Deceased Taxpayers For most claimants, the maximum credit limit is $1,900. But, if you are filing a credit for a taxpayer who died during 2025, the maximum credit of $1,900 shall be reduced proportionately based on days of occupancy. T o reduce the maximum credit limit of $1,900 proportionately based on days of occupancy: Step 1: Divide the number of days of occupancy the taxpayer was a Michigan resident in 2025 by 365 days. Step 2: Multiply $ 1 ,900 by the result from Step 1 . The result is the maximum credit. Example: Jane passed away on June 30, 2025. Following the steps above, Jane determines her prorated maximum credit is $950. Step 1: 182 days / 365 days = 50% Step 2: $1,900 x 50% = $950 The prorated maximum credit replaces the maximum credit of $1,900 on the MI-1040CR, lines 38, 39 or 41 as well as Worksheets 4 and 5, where applicable. The lesser amount of the calculation or the prorated maximum credit must be used on these lines. Married During 2025 If you married during 2025, combine each spouse's share of taxes or rent for the period of time you lived in separate homesteads prior to getting married. Then add this to the prorated taxes or rent for your marital home after your marriage. Y ou are only allowed to claim rent and taxes on homesteads located in Michigan. Filing a Joint Return and Maintaining Separate Homesteads Your claim must be based on the tax or rent paid on only one home during a 12 month period. The total household resources must be the combined income of both you and your spouse for the entire year. Married Filing Separately and Divorced or Separated Claimants Schedule (Form 5049) This form can be found at www.michigan.gov/taxes. Submit Form 5049 with Form MI-1040CR, MI-1040CR-2 or MI-1040CR-7 if any of the following situations apply to you: • Y ou filed as married filing separately, and you and your spouse maintained separate homesteads all year. Complete only Part 3 of Form 5049. • Y ou filed as married filing separately, and you shared a homestead with your spouse all year.
• Y ou filed as married filing separately, and you and your spouse maintained separate homesteads at the end of the year. Filing Separate State Returns and Maintaining Separate Homesteads Spouses who file separate Michigan income tax returns and did not share a household during the tax year may each claim a credit. Each credit is based on the individual taxes or rent and individual total household resources for each person. This only applies to homes located in Michigan. They each must complete Form 5049 and provide an explanation in Part 3. Married Filing Separately and Shared a Homestead Spouses who file separate Michigan income tax returns but shared a homestead for the entire year are entitled to one property tax credit. The credit claim must be based on the total household resources of both spouses during the time the homestead was shared. A spouse claiming the credit must complete Form 5049 and include the total household resources for both spouses. A spouse filing the credit should also include the other spouse's income on the Other Nontaxable Income line of the Homestead Property Tax Credit Claim. Y ou and your spouse may choose how you want to divide the credit. If each spouse claims a portion of the credit, include a copy of the claim showing each spouse's share of the credit with each income tax return. Enter only your portion of the credit on your MI-1040CR, line 44. Separated or Divorced in 2025 Figure your credit based on the taxes you paid together before your separation plus the taxes you paid individually after your separation. Complete and include Form 5049 and include a schedule showing your computation. For more information or to help you calculate a prorated share of taxes, see Michigan Homestead Property Tax Credits for Separated or Divorced Taxpayers (Form 2105). Example: Karl and Cathy separated on October 2, 2025. The annual taxes on the home they owned were $1,860. Cathy continued to live in the home and Karl moved to an apartment on October 2 and paid $350 per month rent for the rest of the year. Cathy earned $20,000 and Karl earned $25,000. They lived together for 275 days. Step 1: Calculate the prorated total household resources for each spouse for the 275 days they lived together. Divide each spouse's total household resources by 365 days, then multiply that figure by 275. Cathy ($20,000/365) x 275 = $15,068 Karl ($25,000/365) x 275 = $18,836 Cathy and Karl must each complete Form 5049 and list income earned during the period they lived together. Step 2: Add both prorated total household resources together to determine the total for the time they lived together. $15,068 + $18,836 = $33,904 Step 3: Divide each individual's prorated share of total household resources by the total from Step 2 to determine the percentage attributable to each. Cathy $15,068/$33,904 = 44% Karl $18,836/$33,904 = 56% Step 4: Calculate the prorated taxes eligible for credit for the time they lived together. Divide the $1,860 by 365 days, then multiply by 275 days. ($1,860/365) x 275 = $1,401 Step 5: Calculate each individual's share of the prorated taxes. Multiply the $1,398 by the percentages determined in Step 3. Cathy $1,401 x 44% = $616 Karl $1,401 x 56% = $785 Enter these amounts on MI-1040CR, line 50, column B. Cathy uses lines 47 through 50, column A, to compute her share of taxes for the remaining 91 days. Karl uses lines 52 and 53 to compute his share of rent. Each completes the remaining lines of MI-1040CR according to the form instructions using only their individual total household resources to calculate their credit. Residents of Adult Care Homes Including Assisted Living Facilities If you are a resident of a nursing home, adult foster care home, or home for the aged; including assisted living facilities, that facility is considered your homestead. If the facility provides an itemized statement that separates rent from other services, base your credit on rent. If the facility does not provide an itemized statement and pays local property taxes (many do not), you may claim your portion of those taxes for credit. Ask the facility manager for your share of the taxes. If you wish to determine your share of the taxes yourself: • For a licensed facility, divide the amount of property taxes levied in 2025 by the number of residents for which the facility is licensed. • For an unlicensed facility, divide the square footage the claimant occupies by the square footage of the facility and multiply the result by the total property taxes levied on the facility. If both you and your spouse live in the facility, add your shares together. If you lived in the facility only part of the year, multiply this amount by the portion of the year you lived at the facility. Exception: Credit is not allowed if your care facility charges are paid directly to the facility by a government agency. If you maintain a homestead and your spouse lives in an adult care home, you may file a joint credit claim. Compute your claim using the tax on your homestead and your spouse's rent or share of the facility's property tax. If you are single and maintain a homestead (that is not rented) while living in an adult care home, you may claim either your homestead or your share of the facility's property tax, but not both. Use the one that gives you the larger credit. Single Adults Sharing a Home When two or more single adults share a home, each may file a credit claim if each was contracted to pay rent or owns a 30
share of the home. Each adult should file an individual claim taxes levied or rent paid, and prorated share of the taxable based on their total household resources, prorated share of value. Line-by-Line Instructions for Homestead Property Tax Credit (MI-1040CR) Lines not listed are explained on the form. Amended Return box: If amending your 2025 credit, check the box at the top of the form. See pages 8 and 26. Lines 1, 2, and 3: Enter your name(s), address, and full nine-digit Social Security number(s). If you are married filing separately, enter both Social Security numbers, but do not enter your spouse's name.
Line 5: Check the box that applies to you or your spouse as of
December 31, 2025, if any. If both boxes 5a and 5b apply, check both. Line 5a: Age 65 or older. This includes the unremarried surviving spouse of a person who was 65 or older at the time of death. Y ou are considered 65 the day before your 65th birthday. Line 5b: Deaf, blind, hemiplegic, paraplegic, quadriplegic, or totally and permanently disabled. • Deaf means the primary way you receive messages is through a sense other than hearing (e.g., lip reading or sign language) • Blind means your better eye permanently has 20/200 vision or less with corrective lenses, or your peripheral field of vision is 20 degrees or less. • Totally and permanently disabled means disabled as defined under Social Security Guidelines 42 USC 416. If you were age 66 by February 28, 2025, you may not file a claim as totally and permanently disabled. Line 6: Filing Status. C h e c k t h e b o x t o i d e n t i f y y o u r f i l i n g status. All couples who are married under the laws of the State of Michigan, or under the laws of another state, and are treated as married for federal tax purposes must claim either married filing jointly or married filing separately status on the property tax credit. If you file a joint federal return, you must file a joint property tax credit. If you filed married filing separately, you must include the total household resources of both spouses unless you maintained separate homesteads. If you filed your federal return as head of household or qualifying surviving spouse, file your property tax credit as single. Line 7: Residency. Check the box that describes your Michigan residency for 2025. If you and your spouse had a different residency status during the year, check a box for each of you. If you checked box c, enter the dates of Michigan residency in 2025. Property Tax Line 8: Homestead Status. C h e c k t h i s b o x i f t h e t a x a b l e value of your homestead includes unoccupied farmland classified as agricultural by your assessor. Line 9: If the taxable value of your homestead is greater than $165,400, STOP; you are not eligible for the homestead property tax credit. If your taxable value is less than $165,400, enter the 2025 taxable value from your 2025 property tax statement or assessment notice. If you do not know your taxable value, contact your local assessor. Farmers should include the taxable value of all land that qualifies for this credit (see instructions for farmers on page 28). Farmers should note that the $165,400 limit on taxable value does not apply to the taxable value on the portion of their homestead that is attributable to unoccupied farmland classified as agricultural. Line 10: Read "Property Taxes Eligible for Credit" on page 27 before you complete this line. Line 11: Read "Rent Eligible for Credit" on page 28 before you complete this line. Total Household Resources Include all taxable and nontaxable income you and your spouse received in 2025. If your family lived in Michigan and one spouse earned wages outside Michigan, include the income earned both in and out-of-state in your total household resources. (See "Total Household Resources," page 26.) Line 14: Enter all compensation received as an employee. Include strike pay, supplemental unemployment benefits (SUB pay), sick pay, or long-term disability benefits, including income protection insurance, and any other amounts reported to you on Form W-2.
Line 15: Do not include business dividend and interest income reported as a distributive share on your federal
Schedule K-1. See line 16 instructions. Line 16: Enter amounts to the extent included in AGI from: • U.S. Schedule C (Profit or Loss from Business). • Part II (Ordinary Gains and Losses) of the U.S. Form 4797. • Part II (Income or Loss from Partnerships and S Corporations) and Part III (Income or Loss from Estates and Trusts) of the U.S. Schedule E. • U.S. Schedule F (Profit or Loss from Farming). • Include income items reported as a distributive share. If the total is negative enter "0." Include amounts from sources outside Michigan. Include the above federal schedules with your claim. Line 17: Enter amounts to the extent included in AGI from: • Part I (Income or Loss from Rental Real Estate and Royalties) of the U.S. Schedule E. • Part IV (Income or Loss from Real Estate Mortgage Investment Conduits (REMIC)) of the U.S. Schedule E (rents, royalties). • Part V (Net farm rental income or (loss) from Form 4835) of the U.S. Schedule E. If the total is negative enter "0." Include amounts from sources outside Michigan. Include the above federal schedules with your claim.
Line 18: Enter all annuity, retirement, pension and individual retirement account (IRA) benefits. This should be the taxable amount shown on your U.S. Form 1099-R. If no taxable amount is shown on your U.S. Form 1099-R, use the amount required to be included in AGI. Enter "0" if all of your distribution is from your contributions made with income previously included in AGI. Include reimbursement payments such as an increase in a pension to pay for Medicare charges. Also include the total amount of any lump sum distribution including amounts reported on your U.S. Form 4972. Do not include recoveries of after-tax contributions or amounts rolled over into another plan (amounts rolled over into a Roth IRA must be included to the extent included in AGI). Y ou must include any part of a distribution from a Roth IRA that exceeds your total contributions to the Roth IRA regardless of whether this amount is included in AGI. Assume all contributions to the Roth IRA are withdrawn first. NOTE: Losses from Roth IRAs cannot be deducted. Line 19: Enter net capital gains and losses. This is the total of short-term and long-term gains, less short-term and long-term losses from your U.S. Schedule D (losses cannot exceed $3,000 if single or married filing jointly, or $1,500 if married filing separately). Include gains realized on the sale of your residence whether or not these gains are exempt from federal income tax. Line 20: Enter alimony received and other taxable income. Only include alimony received if due to a divorce granted prior to 2019. Other taxable income includes: awards, prizes, lottery, bingo, and other gambling winnings over $300; farmland preservation tax credits if not included in net farm income on line 16; and forgiveness of debt to the extent included in federal AGI (e.g., mortgage foreclosure).
Line 21: Enter all Social Security, Supplemental Security
Income (SSI), and/or Railroad Retirement benefits. Include death benefits and amounts received for minor children or other dependent adults who live with you. Report the amount actually received for the year. Medicare premiums reported on your Social Security or Railroad Retirement statement should be deducted. Line 22: Enter child support and all payments received as a foster parent. NOTE: If you received a 2025 Custodial Party End of Year Statement (FEN-851) showing child support payments paid to the Friend of the Court, enter the child support portion here and include a copy of the statement. See line 27 instructions. Line 23: Enter all unemployment compensation received during 2025. Line 24: Enter the value over $300 in gifts of cash or merchandise received, or expenses paid on your behalf (rent, taxes, utilities, food, medical care, etc.) by parents, relatives, or friends. This includes the amount of financial support you received if you are claimed as a dependent on someone else's return. Do not include government payments made directly to third parties such as an educational institution or subsidized housing project. Line 25: Enter other nontaxable income. This includes: • Nongovernmental scholarship, stipend or grant payments paid directly to an educational institution • Compensation for damages to character or for personal injury or sickness • An inheritance (except an inheritance from your spouse) • Proceeds of a life insurance policy paid on the death of the insured (except benefits from a policy on your spouse) • Death benefits paid by or on behalf of an employer • Minister's housing allowance • Forgiveness of debt to the extent not included in federal AGI (e.g., mortgage foreclosure) • Reimbursement from dependent care and/or medical care spending accounts • If you are married filing separately, include your spouse's income unless you maintained separate homesteads during the year. Complete and include Form 5049. Line 26: Enter workers' compensation, service-connected disability compensation and pension benefits from the Veterans Administration. Veterans receiving retirement benefits should enter the benefits on line 18. Line 27: Enter the total payments made to your household by MDHHS and all other public assistance payments such as state adoption subsidies. Y our 2025 Client Annual Statement (DHS-1241) mailed by MDHHS in January 2026 will show your total MDHHS payments. Y our statement(s) may include the following: Family Independence Program (FIP) assistance, State Disability Assistance (SDA), Refugee Assistance, Repatriate Assistance, and vendor payments for shelter, heat, and utilities. NOTE: If you received a 2025 FEN-851 (include a copy), subtract the amount of child support payments entered on line 22 from the total MDHHS payments and enter the difference here. Line 30: Enter total adjustments from your U.S. Form 1040, Schedule 1 . Describe adjustments to income. These adjustments reduce total household resources and include some of the following: • Payments to IRAs, SEP , SIMPLE, or qualified plans • Student loan interest deduction • Moving expenses incurred by members of the Armed Forces on active duty and, due to a military order, move into or within Michigan because of a permanent change in station. Moving expenses when moving out of Michigan cannot be included in "Other Adjustments" to reduce total household resources • Deduction for self-employment tax • Self-employed health insurance deduction • Penalty on early withdrawal of savings • Alimony paid if deductible on your U.S. Form 1040 • Jury duty pay you gave to your employer • Archer Medical Savings Account (MSA) deduction • Health Savings Account (HSA) deduction • Any other adjustments to gross income included on your 2025 U.S. Form 1040, Schedule 1 . This does not include Medicaid waiver payments.
PERCENT OF TAXES NOT REFUNDABLE ALL GENERAL CLAIMANTS
Income % of Income $0 - $71,500 ..................................... 3.2% OTHER CLAIMANTS * Income % of Income $3,000 or less ................................... 0% $3,001 - $4,000 ................................ 1% $4,001 - $5,000 ................................ 2% $5,001 - $6,000 ................................ 3% More than $6,000 ............................. 3.2% *Other claimants are senior citizens or people who are paraplegic, hemiplegic, quadriplegic, deaf, or totally and permanently disabled or unremarried spouse of an individual 65 or older. PART 1: Allowable Computation Based on Claimant Status Complete only Section A, B, or C, whichever applies to you. Senior claimants who checked only 5a complete Section A. Claimants who checked only 5b or checked both boxes 5a and 5b complete Section B. All other claimants complete Section C. Line 37: Enter the percentage from MI-1040CR Table A that applies to your total household resources from line 33. A senior, age 65 or older, filing a part-year credit must calculate annualized total household resources to determine the reduction percentage using MI-1040CR Table A. MI-1040CR TABLE A:
SENIOR CREDIT REDUCTION
Total Household Resources Percentage $21,000 or less........................... 100% (1.00) $21,001 - $22,000 ........................ 96% (0.96) $22,001 - $23,000 ........................ 92% (0.92) $23,001 - $24,000 ........................ 88% (0.88) $24,001 - $25,000 ........................ 84% (0.84) $25,001 - $26,000 ........................ 80% (0.80) $26,001 - $27,000 ....................... 76% (0.76) $27,001 - $28,000 ....................... 72% (0.72) $28,001 - $29,000 ........................ 68% (0.68) $29,001 - $30,000 ........................ 64% (0.64) $30,001 - $71,500 ........................ 60% (0.60) Line 42: If you checked only 5a enter the amount from line 38. If you checked only 5b or checked both 5a and 5b enter the amount from line 39. All others enter the amount from line 41. If you received FIP assistance or other MDHHS benefits in 2025, prorate your credit to reflect the ratio of income from other sources to total household resources. To prorate your credit use the information from your form to complete MI-1040CR Worksheet 4. MI-1040CR WORKSHEET 4: FIP/MDHHS BENEFITS A. Enter amount from line 27 (FIP and other MDHHS benefits) ..................... B. Enter amount from line 33 (Total Household Resources)...................... C. Subtract line A from line B (if amount is a negative value, enter "0") D. Divide line C by line B and enter percentage here ................................ E. If you checked only box 5a, enter the amount from line 38. If you checked box 5b, enter the amount from line 39. All others, enter the amount from line 41 here (maximum $1,900) .............................................. F. Multiply line E by line D. ENTER here and on your MI-1040CR, line 42 * NOTE: If you are age 65 or older and you rent your home, see Worksheet 5. MI-1040CR TABLE B:
HOMESTEAD PROPERTY TAX CREDIT PHASE OUT
Total Household Resources Percentage $62,500 or less...............................100% (1.00) $62,501 - $63,500 ............................90% (0.90) $63,501 - $64,500 ............................80% (0.80) $64,501 - $65,500 ............................70% (0.70) $65,501 - $66,500 ............................60% (0.60) $66,501 - $67,500 ............................50% (0.50) $67,501 - $68,500 ............................40% (0.40) $68,501 - $69,500 ........................... 30% (0.30) $69,501 - $70,500 ........................... 20% (0.20) $70,501 - $71,500 ............................10% (0.10) $71,501 or above ...............................0% (0.00)
Line 43: The computed credit is reduced by 10 percent for every $1,000 (or part of $1,000) that your total household resources exceed $62,500. Enter the percentage from MI-1040CR Table B that applies to your total household resources from line 33. NOTE: If you are filing a part-year credit and the annualized income is more than $62,500, use annualized total household resources to determine the percentage allowable in MI-1040CR Table B. Alternate Property Tax Credit for Renters Age 65 or Older If you are a senior renter age 65 or older you may qualify for the Alternate Property Tax Credit. Complete MI-1040CR Worksheet 5 to determine if you qualify. Visit www.michigan.gov/iit for help calculating the Alternate Property Tax Credit for Renters Age 65 or Older. MI-1040CR Worksheet 5, Line B: Enter rent paid from line 53 and/or line 55. If you moved from one rental homestead to another during the last two years (also see "If Y ou Moved in 2025" on page 28), enter smaller of: • The final month's rent on your previous rented homestead multiplied by 12 , or • The actual rent paid from line 53 and/or line 55. MI-1040CR WORKSHEET 5: ALTERNATE PROPERTY TAX CREDIT FOR RENTERS AGE 65 AND OLDER A. Enter the amount from line 42 or, if line 33 exceeds $62,500, line 42 multiplied by line 43. ............................... B. Enter rent paid from line 53 and/or line 55................................................... C. Multiply amount on line 33 by 40% (0.40) and enter here............................ D. Subtract line C from line B. If line C is more than line B, enter "0".................... E. Enter the larger of line A or line D here and carry amount to your MI-1040CR, line 44 (maximum $1,900).................... PART 4: Renters See "Rent Eligible for Credit" on page 28. Line 52: If you rented a Michigan homestead subject to local property taxes, enter the street number and name, city, landlord's name and address, number of months rented, rent paid per month, and total rent paid. Do this for each Michigan homestead rented during 2025 and for each time rental amounts changed. If you need more space, include an additional sheet. Do not include more than 12 months' rent. If you married during 2025, see page 29. Do not include amounts paid directly to the landowner on your behalf by a government agency, unless payment is made with money withheld from your benefit. If you pay lot rent on your mobile home, subtract the $3 per month specific property tax from the monthly rent amount. Claim the remaining balance of rent on lines 52, 53 and on line 11. If you lived in a special housing facility (other than cooperative housing) and received an itemized statement from your landlord that separates rent from other services (such as food), report rent on this line. PART 5: Alternate Housing Facilities If you are completing lines 54 through 57, you must also complete line 58. Line 54: If your housing costs are subsidized, check box 54a and enter the total amount of rent you paid on line 55 and on line 11. Do not include amounts paid on your behalf by a government agency. Complete lines 12 through 44 to calculate your credit. If you lived in Service Fee Housing (even if it was subsidized housing), check box 54b and enter the amount of rent you paid on line 55. Do not include amounts paid on your behalf by a government agency. Enter 10 percent of the rent on lines 56 and 10 (as property taxes), and complete lines 13 through 44 to calculate your credit. Line 57: If you lived in one of the special housing facilities identified and rent is not itemized, check the appropriate box and calculate your prorated share of property taxes. If you lived in a special housing facility (other than cooperative housing) and received an itemized statement from your landlord that separates rent from other services, do not complete line 57 since rent is reported on line 52. See "Rent Eligible for Credit" and "Residents of Adult Care Homes including Assisted Living Facilities" on pages 28 and 30, respectively
5049 (Rev. 03-24) Attachment 25 Issued under authority of Public Act 281 of 1967, as amended. MICHIGAN Married Filing Separately and Divorced or Separated Claimants Schedule, Form 5049 Tax Year (YYYY) Filer's First Name M.I. Last Name Filer's Full Social Security No. (Example: 123-45-6789) PART 1: MARRIED FILING SEPARATELY AND SHARED A HOMESTEAD DURING THE YEAR Enter dates as MM-DD-YYYYSkip to PART 3 if you are not including income from your spouse. 1. Provide the dates you and your spouse shared a homestead during the tax year. PART 2: INCOME BREAKDOWN Include only the portion of your income in column A and your spouse's income in column B for the period of time the homestead was shared. 2. Wages, salaries, tips, sick, strike and SUB pay, etc........................................................ 2. 3. All interest and dividend income (including nontaxable interest)..................................... 3. 4. Net business income (including net farm income). If negative, enter "0"......................... 4. 5. Net royalty or rent income. If negative, enter "0". ............................................................ 5. 6. Retirement, pension, annuity, and IRA benefits............................................................... 6. 7. Capital gains less capital losses...................................................................................... 7. 8. Alimony and other taxable income. Describe: _________________________________ 8. 9. Social Security, SSI, and/or railroad retirement benefits. ................................................ 9. 10. Child support and foster parent payments....................................................................... 10. 11. Unemployment compensation......................................................................................... 11. 12. Gifts received or expenses paid on your behalf .............................................................. 12. 13. Other nontaxable income. Describe: ________________________________________ 13. 14. Workers'/veterans' disability compensation/pension benefits.......................................... 14. 15. FIP and other MDHHS benefits (do not include food assistance). .................................. 15. 16. Other adjustments. Describe: ____________________________________________ 16. 17. Medical insurance/HMO premiums you paid for you and your family ............................. 17. 18. Total. For each column, add lines 2 through 15 then subtract lines 16 and 17 .............. 18. FROM: TO: A. Filer B. Spouse 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 PART 3: EXPLANATION (If you did not include income from your spouse, provide an explanation.)
Instructions for Married Filing Separately and Divorced or Separated Claimants Schedule (Form 5049) This form is intended to assist you to correctly calculate total household resources for the Homestead Property Tax Credit (MI-1040CR or MI-1040CR-2) or Home Heating Credit (MI-1040CR-7) when married filing separately or divorced during the tax year. Instructions for the income breakdown can be found in the following booklets: MI-1040, MI-1040CR-2 or MI-1040CR-7. Example 1 Jackie and John are married filing separately and maintained separate homesteads all year. Jackie is filing for a Homestead Property Tax Credit. Since they did not share a homestead during the year she would not need to include John's income and would skip to Part 3 of Form 5049. She would complete the explanation box in Part 3 indicating that she maintained a separate homestead all year. Example 2 Karl and Cathy separated on October 2, 2025. Cathy continued to live in the home and Karl moved to an apartment on October 2. They file federal and State returns as married filing separately. • Cathy earned $20,000 of wages evenly throughout the year. • Karl earned $25,000 of wages evenly throughout the year. • They lived together for 275 days. Step 1: Calculate the prorated total household resources for each spouse for the 275 days they lived together. Divide each spouse's total income by 365 days, then multiply that figure by 275. Cathy ($20,000/365) x 275 = $15,068 Karl ($25,000/365) x 275 = $18,836 Karl's Form 5049 When completing Part 1, Karl would enter 01-01-2025 in the FROM box and enter 10-01-2025 in the TO box. He would continue to Part 2 and would enter his income for the period the homestead was shared on line 2 in column A , which would be $18,836. He would enter Cathy's income for the period the homestead was shared on line 2 in column B, which would be $15,068. Karl would total columns A and B on line 18. Cathy's Form 5049 W h e n c o m p l e t i n g P a r t 1 , C a t h y w o u l d e n t e r 01-01-2025 in the FROM box and enter 10-01-2025 in the TO box. She would continue to Part 2 and would enter her income for the period the homestead was shared on line 2 in column A, which would be $15,068. She would enter Karl's income for the period the homestead was shared on line 2 in column B, which would be $18,836. Cathy would total columns A and B on line 18.
Step 2: Before continuing to their Homestead Property
Tax Credit claims, Karl and Cathy would review the example under "Separated or Divorced in 2025" in the MI-1040 Instruction Book as well as Michigan Homestead Property Tax Credits for Separated or Divorced Taxpayers (Form 2105). Example 3 Ron and Tabatha are married filing separately and shared a homestead for the entire year. The couple decides that Ron will claim the Homestead Property Tax Credit and Tabatha will not. • Ron earned $25,000 of wages for the year. • Tabatha earned $7,000 of wages for the year and $500 of interest. When completing Part 1 of Form 5049, Ron would enter 01-01-2025 in the FROM box and 12-31-2025 in the TO box. In column A, Ron would enter $25,000 on line 2, representing the income he earned while they shared a homestead (the entire year), and $25,000 on line 18. In column B, he would report $7,000 of Tabatha's wages on line 2 and $500 of her interest on line 3, representing the income she earned while they shared a homestead (the entire year). Ron would total column B and enter $7,500 on line 18. He would carry the amount from line 18, column B, to the "Other nontaxable income" line on his MI-1040CR with a description of "Form 5049." He would check the box for "Married filing separately" on his MI-1040CR.
A. Total Household Resources for the Period Couple Lived Together 3. Add both incomes together for total household resources for period couple lived together during the tax year. B. Your Percentage of Total Income 4. - 5. - 6. - Divide the amount in box 4 by the amount in box 5 and enter the answer in box 6. C. Percentage of Year Couple Shared Homestead 7. - 8. Divide number of days spouses had a joint household by 365 (366 in a leap year). Enter in box 8. D. Computing Amount of Prorated Taxes for Your Credit Claim 10. Enter percentage from box 8. 11. Multiply amount in box 9 by percentage in box 10 to arrive at tax paid while household was shared. 12. Multiply amount in box 11 by percentage in box 6 to determine the amount of tax you are entitled to claim for the time the household was shared. Enter this amount on MI-1040CR, Part 3, column B or MI-1040CR-2 Part 1, column B. Whichever form you use the number should go on the line titled "Prorated taxes." NOTE: The amount in box 12 may not be your total tax eligible for credit. Property tax or rent paid on a homestead for the period after separation may be eligible for credit. Do the computations on MI-1040CR, Part 3, column A or MI-1040CR-2, Part 1, column A, to determine additional tax eligible for credit. Renters should complete the part referring to "Renters" on the appropriate form. 1. 2. 1. Filer's income for period couple lived together during the tax year. 2. Spouse's income for period couple lived together during the tax year. + 3. =÷ 4. Enter your income from box 1 or 2. 5. Enter amount from box 3. 6. Your percentage of total income. % 7. Number of days couple shared homestead. 8. Percentage of year couple shared homestead. % ÷ 365 = X 9. 9. Total allowable property tax billed on homestead during the tax year. 10. % 11. 12. Worksheet For Figuring Taxes Paid by Separated or Divorced Claimants
Tax Year
Michigan Homestead
Property Tax Credits for Separated or Divorced Taxpayers If you became divorced or separated during the tax year, this information will help you compute the prorated share of taxes or rent used to complete a homestead property tax credit. Each spouse can claim credit for his or her share of property taxes paid before the separation. In addition, each spouse can claim credit for taxes paid individually after the separation. If you were separated but file a joint income tax return with your spouse, this information does not apply to you.
Homestead Property Tax Credits For Separated or Divorced Taxpayers This brochure helps you allocate your total household resources and property taxes for the year you separated or divorced. Before you start, you will need: 1. The Michigan Individual Income Tax (MI-1040) or, if applicable, the Michigan Homestead Property Tax Credit Claim for Veterans and Blind People (MI-1040CR-2) booklets; 2. Property tax bills or lease agreements for the tax year; and 3. Total annual income amount for each spouse for the tax year. Before separation, taxes are divided in the same ratio as the percentage of total income each spouse earned while they shared a homestead. For example, if the filer earned 65 percent of the income and the spouse earned 35 percent, the filer claims 65 percent of the prorated taxes and the spouse claims 35 percent. If one spouse's resources for the period before separation is less than half the taxes paid during that period, the other spouse can claim the taxes for that period. After separation, the spouse who remains in the homestead is entitled to claim the remaining portion of the taxes, regardless of who pays the rent or house payment. The spouse who vacated the homestead may claim credit for the property tax or rent on a new homestead, prorated to the portion of the year the new homestead is occupied after separation. If neither spouse remains in the homestead, each is eligible for credit based on property taxes or rent on his or her new household, prorated to the portion of the year the new homestead is occupied after separation. Each spouse files an individual claim based on his or her total household resources. Rent or house payments made by someone else must be included in total household resources. Child support payments are income to the recipient, but are not deductible by the payer. Computing the Credit Use the worksheet on the back of this brochure to allocate taxes paid. Follow the instructions in Parts A and B to determine your percentage of total income for the period you shared a household. Include in Part C the number of days in the tax year you and your spouse shared a homestead. In Part D, line 9, use the total annual property tax on the home you shared before separating. If the home you shared was rented, multiply the monthly rent by 12 and multiply the result by 20 percent (.20). Enter the result on line 9 as total annual property taxes. Enter the prorated tax from Part D, line 12 of this worksheet in Part 3, column B of your MI-1040CR or Part 1, column B of your MI-1040CR-2. To prorate the property taxes on the homestead occupied after separation, complete the computations in Part 3, column A, MI-1040CR or Part 1, column A, on your MI- 1040CR-2. If you paid rent, complete the part of your MI-1040CR or MI-1040CR-2 that refers to "Renters". Complete the remainder of your homestead property tax credit claim using the appropriate instruction booklet. Sample Computation Bob and Alice separated October 1. They both work and neither qualifies for special exemptions. They owned a home on which the taxes for the year were $1,860. Alice continued to live in the home and Bob moved to an apartment on October 1 and paid $350 per month rent for the rest of the year. Alice earned $20,000 and Bob earned $25,000. They lived together for 273 days. They must prorate their taxes as follows. Figure each spouse's income for the time they lived together (income ÷ 365) x 273 days ............................ Add both spouse's incomes for the period ......................... Divide each spouse's income by the combined income for the period ...................................... Property tax paid while living together ($1,860 ÷ 365) x 273 Multiply each income percentage by the taxes paid on the home while they lived together .................... Alice may claim $612 plus the taxes on the home for the rest of the year ($1,860 ÷ 365) x 92 ...................... $612 + $469 = $1,081 Bob may claim $779 plus 20% of his rent costs for the rest of the year ($350 x 3) x .20 ................... Multiply each annual income by 3.5% .............................
Subtract nonrefundable portion from tax paid to arrive at credit tax eligible for credit ............................. Multiply tax eligible for credit by 60% to arrive at credit .............................................................. $381 x .60 = $229 Alice Bob $14,959 $18,699 $33,658 $14,959 ÷ $33,658 = 44% 44% x $1,391 = $612 $20,000 x .035 = $700 $1,081 - $700 = $381 $18,699 ÷ $33,658 = 56% 56% x $1,391 = $779 $779 + $210 = $989 $25,000 x .035 = $875 $989 - $875 = $114 $114 x .60 = $68 $1,391
Source: official text