Form 2105 - Homestead Property Tax Credits For Separated Or Divorced Taxpayers Page 2
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1
2Computing the Credit
Homestead Property Tax
Enter the prorated tax from Part D, line 12
of this worksheet in Part 1, column B of your MI-
Use the worksheet on the back of this
Credits For Separated or
1040CR or Part 1, column B of your MI-1040CR-2.
brochure to allocate taxes paid. Follow the instruc-
To prorate the property taxes on the
Divorced Taxpayers
tions in Parts A and B to determine your percent-
homestead occupied after separation, complete
age of household income for the period you shared
the computations in Part 1, column A, MI-1040CR
a household. Include in Part C the number of days
This brochure helps you allocate your
or Part 1, column A, on your MI- 1040CR-2.
in the tax year you and your spouse shared a
household income and property taxes for the year
If you paid rent, complete the part of your
homestead. In Part D, line 9, use the total annual
you separated or divorced. Before you start, you
MI-1040CR or MI-1040CR-2 that refers to "Renters".
property tax on the home you shared before sepa-
will need:
Complete the remainder of your homestead property
rating. If the home you shared was rented, multiply
1. your Michigan individual income tax
tax credit claim using the appropriate instruction
the monthly rent by 12 and multiply the result by 20
booklet, or, if applicable, your Michigan
booklet.
percent (.20). Enter the result on line 9 as total
Homestead Property Tax Credit Claim for Vet-
annual property taxes.
erans and Blind People (MI-1040CR-2);
2. property tax bills or rent receipts for the tax
year; and
Sample Computation
3. total annual income amount for each spouse
for the tax year.
Bob and Alice separated October 1. They both work and neither qualifies for special exemptions. They owned a home
Before separation, taxes are divided in the
on which the taxes for the year were $1,860. Alice continued to live in the home and Bob moved to an apartment on
same ratio as the percentage of household income
October 1 and paid $350 per month rent for the rest of the year. Alice earned $20,000 and Bob earned $25,000. They
each spouse earned while they shared a home-
lived together for 273 days. They must prorate their taxes as follows.
stead. For example, if he earned 65 percent of their
Alice
Bob
income and she earned 35 percent, he claims 65
percent of the prorated taxes and she claims 35
Figure each spouse's income for the time they
percent. If one spouse's income for the period
$14,959
$18,699
lived together (income ÷ 365) x 273 days ............................
before separation is less than half the taxes paid
$33,658
during that period, the other spouse can claim the
Add both spouse's incomes for the period .........................
taxes for that period.
Divide each spouse's income by the
After separation, the spouse who remains
combined income for the period ......................................
$14,959 ÷ $33,658 = 44%
$18,699 ÷ $33,658 = 56%
in the homestead is entitled to claim the remaining
portion of the taxes, regardless of who pays the
$1,391
Property tax paid while living together ($1,860 ÷ 365) x 273
rent or house payment.
The spouse who vacated the homestead
Multiply each income percentage by the taxes
paid on the home while they lived together ....................
may claim credit for the property tax or rent on a
44% x $1,391 = $612
56% x $1,391 = $779
new homestead, prorated to the portion of the year
Alice may claim $612 plus the taxes on the home
the new homestead is occupied after separation. If
for the rest of the year ($1,860 ÷ 365) x 92 ......................
$612 + $469 = $1,081
neither spouse remains in the homestead, each is
eligible for credit based on property taxes or rent on
Bob may claim $779 plus 20% of his rent
costs for the rest of the year ($350 x 3) x .20 ...................
his or her new household, prorated to the portion of
$779 + $210 = $989
the year the new homestead is occupied after
Multiply each annual income by 3.5% .............................
$25,000 x .035 = $875
$20,000 x .035 = $700
separation.
Each spouse files an individual claim based
Subtract nonrefundable portion from tax paid
on his or her household income. Rent or house
to arrive at credit tax eligible for credit .............................
$1,081 - $700 = $381
$989 - $875 = $114
payments made by someone else must be in-
Multiply tax eligible for credit by 60%
cluded as "Other non-taxable income." Child sup-
$229
$68
to arrive at credit ..............................................................
$114 x .60 =
$381 x .60 =
port payments are income to the recipient, but are
not deductible by the payer.
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