Property owners undertaking rehabilitation projects on depreciable properties that qualify for the federal historic preservation tax credit must first apply for the federal credit.

Qualified Expenditures
Qualified expenditures are capital expenditures that would qualify under Section 47(a)(2) of the IRC except that the expenditures were made for a nonqualifying historic resource under IRC. A taxpayer with qualified expenditures eligible for the federal credit must claim and receive the federal credit to qualify for the Michigan credit. The expenditures must be paid after December 31, 1998 for the rehabilitation of a historic resource but not more than five years after the certification of the rehabilitation plan.

The amount of the qualified expenditures must be equal to or greater than 10 percent of the State Equalized Value (SEV) of the rehabilitated property. If the historic resource to be rehabilitated is part of a historic or non-historic resource, only the SEV for that portion can be used. If the SEV has not been determined for the historic portion, or the historic resource to be rehabilitated does not have an SEV, the total qualified expenditures must be equal to or greater than 5 percent of the resource's appraised value.

To claim your credit, you must attach the forms listed below to your MI-1040, MI-1041 or C-8000.

• Michigan Historic Preservation Tax Credit (Form 3581)
• Historic Preservation Certification Application, Part 1 Evaluation of Eligibility signed and dated
• Historic Preservation Certification Application Part 3, Request for Certification of Completed Work, signed and dated
• Copy of "Michigan Verification of Taxable Credit Eligibility," if applicable
• A detailed list of qualified expenditures, and dates paid
• Authorized Michigan Historic Preservation Tax Credit Assignment (Form 3614), if applicable

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