Poverty Exemption Information
Residents meeting income limits and asset levels set by the State of Michigan may be eligible for a full or partial exemption of property taxes. The State has adopted guidelines which establish filing requirements, details of the review process for the exemption and income and asset levels which apply. The specific annual income limits vary by size of household and are published each year by the State of Michigan. The Assessor can advise you of the limits.
Applications
It is necessary for taxpayers to apply for a poverty exemption from the property taxes on their home every year with their local Assessor’s office. Applicants must submit a completed application to the Local Assessor’s office prior to the last meeting of the Board of Review. Exemptions may be granted at the March, July or December Board of Review meetings.
As part of the application, it is necessary to submit a copy of the most recent income tax return for everyone who occupies the residence. If an occupant is not required to file an income tax return, that occupant must submit a completed Poverty Exemption Affidavit.
To qualify for a tax exemption on your property:
- Exemption is only on your principle residence.
- You must apply for the exemption each year.
- Your combined household income must be lower than what your local unit requires (income test), and
- The combined value of your assets must be lower than what your local unit requires (asset test)
It is important that taxpayers understand the requirements for claiming the poverty exemption under the updated changes to the law. A taxpayer must complete and file the following documents with Hampton Township to apply for the poverty exemption:
- Form 5737 Application for MCL 211.7u – Poverty Exemption - Include 3 months of statements for
- Additional documentation is required:
*Federal Income Tax Return Form 1040 or 1040A
*State Income Tax Return Form MI-1040 - Form 5739 Affirmation of Ownership and Occupancy to Remain Exempt by Reason of Poverty. (Taxpayers are required to file for a Poverty Exemption annually as stated in the Township's Resolution.) NOTE: Taxpayers who are not required to file Federal/State Income Tax Returns should instead submit Form 4988 Poverty Exemption Affidavit.
The above listed completed documents shall be filed after January 1, but before the day prior to the last day of the December Board of Review to the address below:
Board of Review
C/O: Supervisor or Assessor
Hampton Township
P.O. Box 187
Bay City, MI 48707-0187
The State Tax Commission is providing an MCL 211.7u Poverty Exemption Taxpayer Fact Sheet to assist with explaining the filing requirements to taxpayers.
Taxpayer Fact Sheet links, as well as others, can be accessed below and also on the State Tax Commission’s website at https://www.michigan.gov/statetaxcommission.
- Form 4988 Poverty Exemption
- Form 5739 Affirmation of Ownership and Occupancy
- Form 5737 Application for MCL 211.7u Poverty Exemption
- Bulletin 3 of 2021 – Poverty Exemption
- Poverty Exemption Taxpayer Fact Sheet
Definitions:
Asset Test: Maximum amount of value of taxpayer’s belongings that they may have to qualify for a poverty exemption.
Household Income: Total income of all people living in the taxpayer’s home. (Does not include tenants who pay rent to live in home.)
Income Test: Maximum amount of household income that taxpayer may receive to qualify for a poverty exemption. Usually includes all forms of payments to taxpayer, even if they are not taxable.
Poverty Guidelines: Amount of income that defines poverty based on the number of people living in the home.
For information regarding State of Michigan penalties for filing a false or fraudulent affidavit claiming an exemption, please click here.