Homestead Credit Owners

Ad valorem property taxes that were levied on your homestead in 2005, including collection fees up to 1 percent of the taxes, can be claimed no matter when you pay them. You may add to your 2005 taxes the amount of property taxes billed in 2005 from a corrected or supplemental tax bill. You must deduct from your 2005 property taxes any refund of property taxes received in 2005 that was a result of a corrected tax bill from a previous year.

Do not include:

Delinquent property taxes (e.g., 2004 property taxes paid in 2005).
Penalty and interest on late payments of property tax.
Delinquent water or sewer bills.
Property taxes on cottages or second homes.
Special assessments (for drains, sewers, etc.) that are not based on taxable value and/or are not applied to the entire taxing jurisdiction.

Home Used for Business
If you use part of your home for business, you may claim the property taxes on the living area of your homestead, but not the property taxes on the portion used for business.

Owner-Occupied Duplexes
When both units are equal, you are limited to 50% of the tax on both units.

Owner-Occupied Income Property (Please note we do not support this)

Apartment building owners who live in one of the units or single family homeowners who rent a room(s) to a tenant(s) must do two calculations to figure the tax they can claim and base their credit on the lower amount. First, subtract 20% of the rent collected from the tax that can be claimed for credit. Second, reduce the tax claimed for credit by the amount of tax claimed as a business deduction on your U.S. 1040.

The owner's taxes that can be claimed for credit are a maximum of $1,200, the smaller of the two computations.

Farmers
Include farmland taxes in your property tax credit claim if any of the following conditions apply: (Please note we do not support this)

If your gross receipts from farming are greater than your household income, you may claim all of your farmland taxes including taxes on unoccupied farmland. Do not include taxes on farmland that is not adjacent or contiguous to your home and that you rent or lease to another person.
If gross receipts from farming are less than your household income and you have lived in your home more than 10 years, you may claim the taxes on your home and the farmland adjacent and contiguous to your home.
If gross receipts from farming are less than your household income and you have lived in your home less than 10 years, you may claim the taxes on your home and five acres of farmland adjacent and contiguous to your home. You may not claim rent paid for vacant farmland when computing your property tax credit claim.
Homestead property tax credits are not included in household income. If you included this amount in your taxable farm income, you may subtract it from household income.

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