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FAQ
  Individual Income Tax
What are the most common mistakes made when filing for a Farmland Preservation Tax Credit?
 
Answer:
  • Failing to attach the federal schedules, tax statements and agreements to paper returns
  • Entering the incorrect agreement claim number and
  • Indicating the incorrect, or no taxable value on the return

Federal information filters through to Treasury on E-filed returns.

Helpful Hints
1. Ownership indicated on property tax statements must also match ownership of PA116 agreement(s). If claimed agreement does not reflect appropriate ownership, the credit may be reduced or denied.
2. Multiple names on property tax statements indicate joint ownership. The taxpayer may not claim 100% without a signed distribution statement from all other owners. The agreement may be reduced or denied without the signed statement.
3. MI-1040CR or MI-1040CR-7 must be filed to claim a PA116 credit, even if it results in a $0 credit.
4. Only the portion of the tax bill that was issued for agricultural purposes may be claimed for credit regardless of the amount of the parcel that is enrolled in the PA116 program.
4a. The qualifying portion of the parcel will be indicated on the property tax statement(s) as an agricultural or homestead percentage. Follow the instructions in the MI1040CR-5 tax booklet under the section titled "Property Taxes That Can Be Claimed For Credit", to compute the eligible taxes if the bill indicates less than 100% exempt.
5. It may be beneficial to have the taxpayer provide their preparer with copies of the agreement being claimed for accuracy and to avoid processing delays.

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