I submitted my daughter's Michigan tax return and the software said there was a $937 refund
We got a letter from MI Dept of Treasure saying we owe $3 and that the homestead property tax credit was not allowed because she was a dependent
Why did your software include this credit if it was not allowed?
Thanks
Tom & Grace Ochs
It is included but up to the user to determine if the credit section applies. Your daughter can potentially report any rent expense for the Michigan Homestead Property Tax Credit, but she cannot report the property taxes paid from your home unless she owns or co-owns the home.
The credit can be claimed if the following criteria are met:
For more information, see: 2020 Property Tax Credit MI-1040CR Instructions
I also have this problem. TTax calculated an $1100 property tax credit which should have been 0. You stated it is up to the user to determine eligibility. Why doesn't TTax ask us to verify the simple qualification questions you listed before calculating the credit? I've gone back through a review of my return answering all questions honestly, and TTax continues to give me this credit when it turns out that I am not eligible because my household resources are above the max allowed. TTax auto-fills in the wrong amount into line 14 Wages, Salaries etc. on the MI-1040CR Homestead Property Tax Credit Claim form. It looks like it is filling in taxable income. The credit is not based on taxable income. This is a serious flaw in the Michigan state TTax software and should be corrected.