To be eligible, you must meet all of the following requirements:

• Be a permanent resident of a Renaissance Zone designated prior to January 1, 2012, for at least 183 consecutive days
• Be approved by your local assessor's office
• Must not be delinquent for any state or local taxes abated by the Renaissance Zone Act
• Must file an MI-1040 each year
• Have gross income of $1 million or less

If you were a full-year resident of a renaissance zone, you may subtract all income earned or received. Unearned income, such as capital gains, may have to be prorated. If you lived in the zone at least 183 consecutive days during 2012, you may subtract the portion of income earned while a resident of the zone.

Certain Renaissance Zones began to phase out in 2007. The tax exemption is reduced in increments of 25 percent during the Zone's final three years of existence. If you are a resident of a Zone that is phasing out (check with your local unit of government), you must reduce your credit as follows:

• 25 percent for the tax year that is two years before the final year of designation as a Renaissance Zone
• 50 percent for the tax year immediately preceding the final year of the designation as a Renaissance Zone
• 75 percent for the tax year that is the final year of the designation as a Renaissance Zone.

For additional information regarding qualifications for the Renaissance Zone deduction, call the Michigan Economic Development Corporation at (517) 373-9808.