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HB 5997

Individual income tax: property tax credit; homestead property tax credit; increase, and modify income threshold. Amends secs. 520 & 522 of 1967 PA 281 (MCL 206.520 & 206.522).

2025-2026 Regular Session Introduced by Tyrone Carter and 2 co-sponsors

HB 5997 broadens and indexes property tax/rent credits against income tax, expanding eligibility and increasing credits for homeowners, renters, and eligible seniors/disabled.

bill electronically reproduced 05/20/2026
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Bill Summary · HB 5997

Bill overview

HB 5997 (Michigan, 2025-2026) would modify and expand the state’s property tax/rent credit mechanisms tied to individual income tax, specifically increasing the homestead property tax credit and adjusting income thresholds and phase-ins for both homeowners and renters, with a parallel framework for senior citizens and other qualifying groups.

Main purpose and intent

  • To increase and calibrate the property tax credit against income tax liability for eligible Michigan taxpayers, with particular focus on:
    • Expanding eligibility and amounts for homeowners claiming a homestead property tax credit.
    • Providing credits to renters based on rent paid.
    • Adjusting caps and thresholds annually using the Consumer Price Index (CPI) to maintain purchasing power.
  • To support seniors, disabled individuals, veterans, servicepersons, widows/widowers, and certain renters, while implementing safeguards against discrimination and ensuring proper administration.

Key provisions and changes

  • Sec. 520 – Homeowners and property taxes

    • Eligible claimants may receive a credit against state income tax for property taxes on the homestead that would have been deductible for federal taxes (or that would have been deductible if not in a zero bracket scenario).
    • A taxable value cap for qualifying homesteads excludes parcels with agricultural use, initially set at $135,000 to $165,400 (the text shows a transition between these figures across years, with the cap adjusting annually to CPI).
    • The cap is adjusted starting in the 2021-2026 tax years and annually thereafter by the CPI, rounded to the nearest $100.
    • For renters, a similar credit is available based on 20-23% (before 2018) / 23-25% (after 2017) of gross rent paid; special treatment exists for service-charge tenants (10% of gross rent).
    • Rules for unused credits: excess credits payable to the claimant (without interest) after offsetting tax liability; with withholdings and other credits applied first.
    • Provisions for seniors in federally/state aided housing to assign the credit to mortgagors if rent is reduced correspondingly.
    • Renters only may claim, and discriminatory rent practices related to credits are misdemeanors.
    • Credits for households receiving certain welfare or disability aid are reduced proportionally to aid received, with a cap on reduction.
    • Additional rules address moving, partial-year returns, and compliance with other related acts.
    • The total annual credit under this section cannot exceed certain annual caps, and the combined credit against other state programs cannot exceed property tax due.

  • Sec. 522 – Calculation of credits

    • Non-senior claimants: credit equals 60% (pre-2027) or 62% (post-2026) of the excess of property taxes (or rent credits) over a baseline of 3.5% of total household resources (3.2% after 2018).
    • Senior claimants: tiered credits based on total household resources, with higher refunds for lower-resource households; percentages decline as resources rise. The schedule sections (c) and (d) establish specific percentiles and nested calculations, including scenarios for servicepersons, veterans, and widows/widowers.
    • Blind or disabled special rules provide alternative percent-based credits linked to household resources and tax year thresholds.
    • A single claimant per household per year, with an exception for both spouses if filing jointly and both are blind.
    • Claimed credits must be elected under a defined classification if multiple apply.
    • Various administrative provisions govern documentation, year-round applicability, and form adjustments.

  • Enacting provision

    • The act would take effect 90 days after enactment.

Affected parties and impacts

  • Homeowners with homesteads meeting the value cap and other eligibility criteria.
  • Renters and lessees of homesteads, including those paying service charges in lieu of taxes.
  • Senior citizens, disabled individuals, eligible servicepersons, eligible veterans, and eligible widows/widowers.
  • Households with varying total household resources thresholds, with credits tapering as resources rise.
  • Michigan residents subject to state income tax, with annual CPI-based adjustments to caps and maximum credits.

Procedural and timeline notes

  • CPI-based adjustments: caps and maximum credits adjust annually, with rounding to the nearest $100.
  • Credits are applied against state income tax liability; any excess is paid out (without interest) after offset rules.
  • Administrative rules and tables may be promulgated by the Department to implement the new/subsection provisions.
  • Effective date: 90 days after enactment.

Overall, HB 5997 aims to broaden and index the property tax/rent credit framework to better assist homeowners, renters, and vulnerable groups, while ensuring fiscal controls and administrative clarity.

Compiled from official sources — confirm details with the bill’s official record.

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