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2105f_10542_7 michigan.gov documents taxes

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This document provides a worksheet and instructions for calculating property tax credits for taxpayers who separated or divorced during the tax year. It outlines how to determine each spouse's percentage of total household income while living together. It then explains how to prorate property taxes paid on the shared homestead during that period. It also addresses how to claim credits for property taxes or rent paid individually after separating on new homesteads. The sample computation illustrates how to allocate income, property taxes paid, and calculate each spouse's eligible tax credit.

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Clear Form 2105 (Rev. 11-01) Worksheet For Figuring Taxes Paid by Claimants Who Separated or Were Divorced in Tax Year A. Household Income for the Period Couple Lived Together 1. 1. Wife's income for period couple lived together during the tax year. + 2. 2. Husband's income for period couple lived together during the tax year. Michigan 3. 3. Add both incomes together for total household income for period Homestead couple lived together during the tax year. Property B. Your Percentage of Total Income 4. - 5. - 6. - Divide the amount in box 4 by the amount in box 5 and enter the answer in box 6. Tax Credits 4. Enter your income from box 1 or 2. 5. Enter amount from box 3. 6. Your percentage of total income. = ÷ for Separated % or Divorced C. Percent of Year Couple Shared Homestead Taxpayers 7. - 8. Divide number of days spouses had a joint household by 365 (366 in a leap year). Enter in box 8. 7. Number of days couple shared homestead. 8. Percent of year couple shared homestead. 365 = ÷ % If you became divorced or sepa- rated during the tax year, this informa- D. Computing Amount of Prorated Taxes for Your Credit Claim tion will help you compute the prorated share of taxes or rent used to complete 9. 9. Total allowable property tax billed on homestead during the tax year. a homestead property tax credit. Each spouse can claim credit 10. for his or her share of property taxes % X 10. Enter percentage from box 8. paid before the separation. In addition, 11. Multiply amount in box 9 by percentage in box 10 each spouse can claim credit for taxes 11. to arrive at tax paid while household was shared. paid individually after the separation. If you were separated but file a 12. Multiply amount in box 11 by percentage in box 6 to determine the 12. joint income tax return with your spouse, amount of tax you are entitled to claim for the time the household was shared. Enter this amount on MI-1040CR, Part 1, column B this information does not apply to you. or MI-1040CR-2 Part 1, column B. Whichever form you use the number should go on the line titled quot;Prorated taxes.quot; NOTE: The amount in box 12 may not be your total tax eligible for credit. Property tax or rent paid on a homestead for the period after separation may be eligible for credit. Do the computations on MI-1040CR, Part 1, column A or MI-1040CR-2, Part 1, column A, to determine additional tax eligibile for credit on the line titled quot;Prorated taxes.quot; Renters should complete the part referring to 5,000 copies printed quot;Rentersquot; on the appropriate form. Total cost $ 247.48; .049¢ per copy
Computing 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 quot;Rentersquot;. 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 .................... 44% x $1,391 = $612 may claim credit for the property tax or rent on a 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% ............................. $20,000 x .035 = $700 $25,000 x .035 = $875 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 quot;Other non-taxable income.quot; Child sup- $68 $229 to arrive at credit .............................................................. $381 x .60 = $114 x .60 = port payments are income to the recipient, but are not deductible by the payer.

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2105f_10542_7 michigan.gov documents taxes

  • 1. Clear Form 2105 (Rev. 11-01) Worksheet For Figuring Taxes Paid by Claimants Who Separated or Were Divorced in Tax Year A. Household Income for the Period Couple Lived Together 1. 1. Wife's income for period couple lived together during the tax year. + 2. 2. Husband's income for period couple lived together during the tax year. Michigan 3. 3. Add both incomes together for total household income for period Homestead couple lived together during the tax year. Property B. Your Percentage of Total Income 4. - 5. - 6. - Divide the amount in box 4 by the amount in box 5 and enter the answer in box 6. Tax Credits 4. Enter your income from box 1 or 2. 5. Enter amount from box 3. 6. Your percentage of total income. = ÷ for Separated % or Divorced C. Percent of Year Couple Shared Homestead Taxpayers 7. - 8. Divide number of days spouses had a joint household by 365 (366 in a leap year). Enter in box 8. 7. Number of days couple shared homestead. 8. Percent of year couple shared homestead. 365 = ÷ % If you became divorced or sepa- rated during the tax year, this informa- D. Computing Amount of Prorated Taxes for Your Credit Claim tion will help you compute the prorated share of taxes or rent used to complete 9. 9. Total allowable property tax billed on homestead during the tax year. a homestead property tax credit. Each spouse can claim credit 10. for his or her share of property taxes % X 10. Enter percentage from box 8. paid before the separation. In addition, 11. Multiply amount in box 9 by percentage in box 10 each spouse can claim credit for taxes 11. to arrive at tax paid while household was shared. paid individually after the separation. If you were separated but file a 12. Multiply amount in box 11 by percentage in box 6 to determine the 12. joint income tax return with your spouse, amount of tax you are entitled to claim for the time the household was shared. Enter this amount on MI-1040CR, Part 1, column B this information does not apply to you. or MI-1040CR-2 Part 1, column B. Whichever form you use the number should go on the line titled quot;Prorated taxes.quot; NOTE: The amount in box 12 may not be your total tax eligible for credit. Property tax or rent paid on a homestead for the period after separation may be eligible for credit. Do the computations on MI-1040CR, Part 1, column A or MI-1040CR-2, Part 1, column A, to determine additional tax eligibile for credit on the line titled quot;Prorated taxes.quot; Renters should complete the part referring to 5,000 copies printed quot;Rentersquot; on the appropriate form. Total cost $ 247.48; .049¢ per copy
  • 2. Computing 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 quot;Rentersquot;. 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 .................... 44% x $1,391 = $612 may claim credit for the property tax or rent on a 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% ............................. $20,000 x .035 = $700 $25,000 x .035 = $875 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 quot;Other non-taxable income.quot; Child sup- $68 $229 to arrive at credit .............................................................. $381 x .60 = $114 x .60 = port payments are income to the recipient, but are not deductible by the payer.