What types of other nontaxable income should be included in my Total Michigan Household Resources?

Nontaxable income that needs to be included in the calculation of the Michigan Homestead Credit includes:

  • Compensation for damages to character or for personal injury or sickness
  • Adoption subsidies
  • An inheritance (except for an inheritance from your spouse)
  • Proceeds of a life insurance policy paid on the death of the insured (except for benefits from a policy on your spouse)
  • Death benefits paid by or on behalf of an employer
  • Ministers housing allowance
  • Nongovernmental Scholarship, stipend, or grant payments paid directly to an educational institution
  • Forgiveness of debt (e.g. mortgage foreclosure etc.)
  • Reimbursement from dependent care and/or medical care spending accounts
  • Payments made on your behalf except government payments made directly to an educational institution or subsidized housing project.

Household Income does NOT include:
  • Net operating loss deductions taken on your federal return
  • Payments received by participants in the foster grandparent or senior companion program
  • Energy assistance grants
  • Government payments to a third party (e.g., payments made to a doctor, GI Bill benefits and payments from a PELL grant). Note: If payment is made from money withheld from your benefit, the payment is part of household income. (For example, the DHS may pay your rent directly to the landlord.)
  • Money received from a government unit to repair or improve your homestead
  • Surplus food or food assistance program benefits
  • State and city income tax refunds and homestead property tax credits
  • Chore service payments (these payments are income to the provider of the service)
  • The first $300 from gambling, bingo, lottery, awards, or prizes
  • The first $300 in gifts of cash or merchandise received, or expenses paid on your behalf (rent, taxes, utilities, food, medical care, etc.) by parents, relatives or friends
  • The amount of financial support received as a dependent on someone else's return
  • Amounts deducted from Social Security or Railroad Retirement benefits for Medicare premiums
  • Life, health, and accident insurance premiums paid by your employer
  • Loan proceeds
  • Inheritance from a spouse
  • Life insurance benefits from a spouse
  • Payments from a long-term care policy made to a nursing home or other care facility.
  • Most payments from The Step Forward Michigan program

Note: if you're claimed as a dependent on someone else's return, Michigan considers that more than 50% of your support during the year was provided by that person. You need to include that support as other nontaxable income.

For more information on Total Michigan Household Resources, visit the Michigan Department of Treasury Website. 

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