Hardship Exemption

Michigan law (MCL 211.7u) provides for a reduction in property taxes for eligible, low-income homeowners. Every city and township must offer an application process and set eligibility requirements that are no more restrictive than the federal poverty guidelines.

In accordance with, MCL 211.7u(6): Extension For Those Persons Receiving A Fixed Income From Public Assistance. Trout Lake Township passed a resolution that allows an exemption granted in 2019 or 2020 to carry forward to 2021, 2022, and 2023 for those persons who receive a fixed income solely from public assistance that is not subject to significant annual increases (Federal Supplemental Security Income, Social Security disability or retirement benefits). Local units can also adopt a resolution for any new exemptions in 2021, 2022 or 2023 to remain exempt for up to 3 years for persons who receive a fixed income solely from public assistance that is not subject to significant annual increases.

 

A person that receives an extended exemption under MCL 211.7u(6) must file an affidavit rescinding the exemption with the local assessing unit within 45 days after:

1) ceasing to own and occupy the Page 4 property as a principal residence; or

2) a change in household assets or income that defeats eligibility for the poverty exemption. If the person fails to file the required rescission and the property is later determined to be ineligible for the exemption, the person is subject to repayment of any additional taxes with interest as provided in MCL 211.7u(6)(b).

 

How To Apply For The Poverty Exemption

 

To request a poverty exemption, a taxpayer must file:

1. Form 5737 Application for MCL 211.7u Poverty Exemption

2. Form 5739 Affirmation of Ownership and Occupancy to Remain Exempt by Reason of Poverty

3. Form 4988 Poverty Exemption Affidavit

4. All required additional documentation (such as federal/state income tax returns)

 

Forms 5737, 5739, and 4988, along with any additional documentation, must be filed with the local assessing unit where the property is located. Do not file these forms with the Department of Treasury or the State Tax Commission. The forms may be submitted to the local assessing unit on or after January 1 but before the day prior to the last day of the December Board of Review during the year in which the exemption is requested.

 

Taxpayers should contact the local assessing unit directly to verify deadline dates for submission of the forms to ensure the application gets reviewed by a Board of Review during that calendar year.

 

In addition to filing Forms 5737, 5739, and 4988 and any supporting documentation, a taxpayer must do all the following to be eligible for the poverty exemption:

 

1. Own and occupy the property as a principal residence.

2. Provide federal and state income tax returns for the current or immediately preceding year, including any property tax credits, for all persons residing in the principal residence (disclosure of the income of an owner who is not residing in the principal residence is not Page 5 required). Federal and state income tax returns are not required for a person residing in the principal residence if that person was not required to file a federal or state income tax return. Instead, Form 4988, Poverty Exemption Affidavit may be filed for all persons residing in the residence who were not required to file federal or state income tax returns in the current or immediately preceding year.

3. Produce a valid driver license or other form of identification, if requested.

4. Produce a deed, land contract, or other evidence of ownership of the property, if requested.

5. Meet the federal poverty guidelines published in the prior calendar year in the Federal Register by the United States Department of Health and Human Services or alternative guidelines adopted by the local assessing unit. The alternative guidelines cannot provide income eligibility requirements less than the federal guidelines.

6. Meet the asset level test adopted by the local assessing unit.

2021 ANNUAL GUIDELINE RESOLUTION FOR HARDSHIP EXEMPTION