Benefits

• Under the HPTCP, homeowners can receive a maximum of $1,200 in tax credits for property taxes paid, and renters can claim 20 percent of their rent up to $1,200 for the 2010 tax year. Individuals with little income and blindness or severe disability more easily qualify for a credit. The savings from the PRA vary depending upon the value of a property and the local school tax rate, but homesteaders can receive an unlimited amount of property tax relief. Taxpayers who cannot claim a homestead exemption will pay full property taxes and won't receive a tax credit or reduced property tax statement.
  
  

Eligibility

• To qualify for the Homestead Property Tax Credit Program, homeowners or renters must live in their residence for at least six months in a tax year and must live in an area where the county or city levies property taxes. In addition, residents cannot earn more than $82,650 for the 2010 tax year to qualify. To qualify for the PRA Program, homeowners must have a permanent and fixed residence in Michigan, and the state does not set any income limits to qualify for an exemption.
  
  

Filing

• Michigan residents must fill out Form MI-1040CR to participate in the Homestead Property Tax Credit Program and Form 2361 to participate in the Principal Residence Exemption. On Form MI-1040CR, renters and homeowners determine their maximum credit by filling out lines 6 through 10. The state of Michigan then requires a filer to take numerous deductions based upon income and expenses that reduce the total amount of the credit. The taxpayer will then mail Form MI-1040CR to the Michigan Department of Treasury. On Form 2361, residents list their property information and answer questions to ensure eligibility. They then mail this form to their city or township property assessor.
  
  

Time Frame

• Michigan residents claiming the Homestead Property Tax Credit must attach Form MI-1040CR to their MI-1040 income tax return and submit both forms by the same due date as federal returns, April 18, 2011, for the 2010 tax year. According to the Michigan Department of Treasury, homeowners must claim the Principal Residence Exemption by May 1 of the current year for the reduction to show up on their yearly property tax bill.