INCOME TAX ACT OF 1967 (EXCERPT)
Act 281 of 1967
***** 206.520 THIS SECTION IS AMENDED 91 DAYS AFTER ADJOURNMENT OF THE 2015 REGULAR SESSION SINE DIE: See 206.520.amended *****
206.520 Credit for property taxes on homestead; credit for person renting or leasing homestead; credit in excess of tax liability due; assignment of claim to mortgagor by senior citizen for rent reduction; eligibility to claim credit on property rented or leased as credit for person receiving aid to families with dependent children, state family assistance, or state disability assistance payments; reduction of credit for claimant whose household income exceeds certain amount; adjustment; credit claimable by senior citizen; limitations; rules; form; determining qualification to claim credit after move; reduction of claim for return of less than 12 months; report by state housing development authority; total credit allowed by section and MCL 206.522.Sec. 520.
(1) Subject to the limitations and the definitions in this chapter, a claimant may claim against the tax due under this part for the tax year a credit for the property taxes on the taxpayer's homestead deductible for federal income tax purposes pursuant to section 164 of the internal revenue code, or that would have been deductible if the claimant had not elected the zero bracket amount or if the claimant had been subject to the federal income tax. The property taxes used for the credit computation shall not be greater than the amount levied for 1 tax year. An owner is not eligible for a credit under this section if the taxable value of his or her homestead excluding the portion of a parcel of real property that is unoccupied and classified as agricultural for ad valorem tax purposes in the year for which the credit is claimed is greater than $135,000.00. As used in this subsection, "taxable value" means that value determined under section 27a of the general property tax act, 1893 PA 206, MCL 211.27a.
(2) A person who rents or leases a homestead may claim a similar credit computed under this section and section 522 based upon 17% of the gross rent paid for tax years before the 1994 tax year, or 20% of the gross rent paid for tax years after the 1993 tax year. A person who rents or leases a homestead subject to a service charge in lieu of ad valorem taxes as provided by section 15a of the state housing development authority act of 1966, 1966 PA 346, MCL 125.1415a, may claim a similar credit computed under this section and section 522 based upon 10% of the gross rent paid.
(3) If the credit claimed under this section and section 522 exceeds the tax liability for the tax year or if there is no tax liability for the tax year, the amount of the claim not used as an offset against the tax liability shall, after examination and review, be approved for payment, without interest, to the claimant. In determining the amount of the payment under this subsection, withholdings and other credits shall be used first to offset any tax liabilities.
(4) If the homestead is an integral part of a multipurpose or multidwelling building that is federally aided housing or state aided housing, a claimant who is a senior citizen entitled to a payment under subsection (2) may assign the right to that payment to a mortgagor if the mortgagor reduces the rent charged and collected on the claimant's homestead in an amount equal to the tax credit payment provided in this chapter. The assignment of the claim is valid only if the Michigan state housing development authority, by affidavit, verifies that the claimant's rent has been so reduced.
(5) Only the renter or lessee shall claim a credit on property that is rented or leased as a homestead.
(6) A person who discriminates in the charging or collection of rent on a homestead by increasing the rent charged or collected because the renter or lessee claims and receives a credit or payment under this chapter is guilty of a misdemeanor. Discrimination against a renter who claims and receives the credit under this section and section 522 by a reduction of the rent on the homestead of a person who does not claim and receive the credit is a misdemeanor. If discriminatory rents are charged or collected, each charge or collection of the higher or lower payment is a separate offense. Each acceptance of a payment of rent is a separate offense.
(7) A person who received aid to families with dependent children, state family assistance, or state disability assistance pursuant to the social welfare act, 1939 PA 280, MCL 400.1 to 400.119b, in the tax year for which the person is filing a return shall have a credit that is authorized and computed under this section and section 522 reduced by an amount equal to the product of the claimant's credit multiplied by the quotient of the sum of the claimant's aid to families with dependent children, state family assistance, and state disability assistance for the tax year divided by the claimant's total household resources. The reduction of credit shall not exceed the sum of the aid to families with dependent children, state family assistance, and state disability assistance for the tax year. For the purposes of this subsection, aid to families with dependent children does not include child support payments that offset or reduce payments made to the claimant.
(8) A credit under subsection (1) or (2) shall be reduced by 10% for each claimant whose total household resources exceed $41,000.00 and by an additional 10% for each increment of $1,000.00 of total household resources in excess of $41,000.00.
(9) If the credit authorized and calculated under this section and section 522 and adjusted under subsection (7) or (8) does not provide to a senior citizen who rents or leases a homestead that amount attributable to rent that constitutes more than 40% of the total household resources of the senior citizen, the senior citizen may claim a credit based upon the amount of total household resources attributable to rent as provided by this section.
(10) A senior citizen whose gross rent paid for the tax year is more than the percentage of total household resources specified in subsection (9) for the respective tax year may claim a credit for the amount of rent paid that constitutes more than the percentage of the total household resources of the senior citizen specified in subsection (9) and that was not provided to the senior citizen by the credit computed pursuant to this section and section 522 and adjusted pursuant to subsection (7) or (8).
(11) The department may promulgate rules to implement subsections (9) to (15) and may prescribe a table to allow a claimant to determine the credit provided under this section and section 522 in the instruction booklet that accompanies the respective income tax or property tax credit forms used by claimants.
(12) A senior citizen may claim the credit under subsections (9) to (15) on the same form as the property tax credit permitted by subsection (2). The department shall adjust the forms accordingly.
(13) A senior citizen who moves to a different rented or leased homestead shall determine, for 2 tax years after the move, both his or her qualification to claim a credit under subsections (9) to (15) and the amount of a credit under subsections (9) to (15) on the basis of the annualized final monthly rental payment at his or her previous homestead, if this annualized rental is less than the senior citizen's actual annual rental payments.
(14) For a return of less than 12 months, the claim for a credit under subsections (9) to (15) shall be reduced proportionately.
(15) The total credit allowed by this section and section 522 shall not exceed $1,200.00 per year.
History: Add. 1973, Act 20, Imd. Eff. May 16, 1973
Am. 1975, Act 233, Imd. Eff. Aug. 27, 1975
Am. 1979, Act 132, Eff. Mar. 27, 1980
Am. 1980, Act 352, Imd. Eff. Dec. 29, 1980
Am. 1982, Act 269, Imd. Eff. Oct. 5, 1982
Am. 1982, Act 515, Imd. Eff. Dec. 31, 1982
Am. 1984, Act 285, Imd. Eff. Dec. 20, 1984
Am. 1985, Act 187, Imd. Eff. Dec. 20, 1985
Am. 1987, Act 254, Imd. Eff. Dec. 28, 1987
Am. 1988, Act 516, Imd. Eff. Dec. 30, 1988
Am. 1990, Act 283, Imd. Eff. Dec. 14, 1990
Am. 1992, Act 293, Imd. Eff. Dec. 18, 1992
Am. 1993, Act 328, Eff. Apr. 1, 1994
Am. 1995, Act 245, Imd. Eff. Dec. 27, 1995
Am. 2011, Act 38, Eff. Jan. 1, 2012
Am. 2011, Act 273, Eff. Jan. 1, 2012
Constitutionality: The provision in the Income Tax Act for an income-graduated reduction of local property tax credits does not conflict with the constitutional prohibition against a graduated income tax because the property tax credit is payable to the property taxpayer irrespective of state income tax liability. Butcher v Department of Treasury, 425 Mich 262; 389 NW2d 412 (1986).
Compiler's Notes: Act 253 of 1980, purporting to amend MCL 206.30, 206.512, 206.520, and 206.522 and to add a MCL 206.261 could not take effect until Senate Joint Resolution X became effective as part of the constitution. Senate Joint Resolution X was submitted to, and disapproved by, the people at the general election held on November 4, 1980.Section 2 of Act 515 of 1982 provides: “(1) Section 255 of this amendatory act shall be effective for the 1979 tax year and each tax year thereafter.(2) Section 301 of this amendatory act shall take effect for tax years beginning on or after January 1, 1983.(3) Section 520 of this amendatory act shall take effect for tax years beginning on or after January 1, 1981.”Section 2 of Act 187 of 1985 provides: “It is the intent of the legislature that this amendatory act shall not serve to affect a credit claimed under section 520 before the effective date of this amendatory act.”Act 486 of 1988, purporting to amend MCL 206.520 and 206.522, could not take effect “unless Senate Joint Resolution K of the 84th Legislature becomes a part of the constitution as provided in section 1 of article XII of the state constitution of 1963.” Senate Joint Resolution K was submitted to, and disapproved by, the people at the general election held on November 8, 1988.Act 166 of 1989, purporting to amend MCL 206.520 and 206.522 and to add a MCL 206.252, could not take effect “unless amendment 2 of House Joint Resolution I of the 85th Legislature becomes a part of the constitution as provided in section 1 of article XII of the state constitution of 1963.” House Joint Resolution I was submitted to, and disapproved by, the people at the special election held on November 7, 1989.
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