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• Trusts created by the death of a spouse if the trust

are not included in Michigan household income. If you

requires 100 percent of the income from the trust to be

included this amount in your taxable farm income, you

distributed each year to the surviving spouse.

may subtract it from your household income.

The following should file a Farmland Preservation Tax

Effect on Your 2011 Taxable Farm Income

Credit (Form 4594):

The portion of your Homestead Property Tax Credit that

• Estates, including property taxes from the date of death,

is for farm buildings and land is business related. To

and farm income required to be reported on the entity's

determine the portion that is business income, divide the

U.S. Form 1041.

taxable value of your buildings and farmland by the total

• Corporations other than S corporations

taxable value of your property, then multiply by the credit

(see below). Your local assessor can show you how your

• S corporations that had an FDRA before January 1,

total taxable value was determined.

1989, and in 1991 elected to file C-8022

• Trusts, except as noted above.

Taxable value of buildings

2010 Homestead

and farmland

Property Tax

Form 4594 can be found at or

Total taxable value

Credit amount

by calling (517) 636-4486.

What to Do With a Jointly Payable Check

= Portion of Homestead Property

Tax Credit that is business income

Take the check, check stub, and a copy of your FDRA(s) to

your county treasurer(s). He or she will ask you to endorse

You must include your 2010 Farmland Preservation Tax

the check, then use the refund to pay any delinquent taxes.

Credit amount and the business portion of your 2010

Any amount left will be refunded to you.

Homestead Property Tax Credit in your 2011 federal AGI.

If you own your property as an individual but the farming

Property Taxes That Can Be Claimed for Credit

activity is operated under a partnership, report the

The property taxes levied in 2011 on enrolled land can

Farmland Preservation Tax Credit on your personal return.

be claimed for the 2011 credit, regardless of when they

Was your 2010 tax refund (MI-1040, line 35) greater than

are paid. Special assessments (those not based on State

the amount of your 2010 Farmland Preservation Tax

equalized or taxable value), penalties, and interest cannot

Credit (MI-1040, line 25) plus the business portion of your

be claimed.

Homestead Property Tax Credit?

Taxes on land not eligible for either the principal residence

If yes, you may subtract on line 16 of the Schedule 1 the

or qualified agricultural property exemption usually are

excess refund amount you received in 2011 to the extent it

not eligible for a Farmland Preservation Tax Credit. The

was included in federal AGI.

exception is rental property where the tenant participates

in the farming operation at least 1,040 hours per year. To

Land Owned by a Person Under a Life Estate

compute the taxes that can be claimed for credit, exclude

A person in possession for life under a life estate with

the school operating tax and multiply the balance by the

remainder interest to another person may claim all the

percentage of exemption allowed by the local taxing

property taxes to compute the credit. However, the life

authority. See example below:

estate holder and the person(s) holding the remainder

Taxes levied ............................................. $2,000

interest may choose to divide the property taxes in the

School operating tax ................................... $350

same manner as they divide revenue and expenses. A

Principal residence exemption.....................60%

written agreement must be attached to each return.

$2,000

$1,650

Land Owned by a Partnership

- 350

x 60%

Property taxes on land owned by a partnership are

$1,650

$990 May be claimed for credit

allocated to the partners based on the partner’s percent

If you have entered into more than one agreement with the

of income or ownership. All partners must use the same

MDA, the sum of the taxes under each agreement is used

basis for filing.

to compute your credit. The amount of credit you will

If the partnership files a U.S. Form 1065, the percent is

receive is based on household income.

on each partner’s Schedule K-1. If the partnership is not

Computing the Homestead Property Tax Credit

required to file a U.S. Form 1065, the percentage of income

is on the partnership agreement or on a statement signed

You must include your total Farmland Preservation Tax

by all the partners. If no U.S. Form 1065 is required, use

Credit amount on your MI-1040CR or your MI-1040CR-2.

Part 2 to show percentage of income or ownership.

Enter the amount of credit you received in 2011 on the

MI-1040CR, line 17, or MI-1040CR-2, line 18, or include

the credit in net farm income on MI-1040CR, line 15, or

MI-1040CR-2, line 16. Homestead Property Tax Credits

Instructions For Form Mi-1040cr-5 - Michigan Farmland Preservation Tax Credit - 2011 Page 4

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