Sue a Wilks v. Department of Treasury
Key claim: Homeowners who first filed a Michigan income-tax return as nonresidents can still get the principal residence property-tax exemption if they later amend the return to show Michigan residency.
Abstract
Michigan Court of Appeals opinion decided 2026-08-14. If this opinion indicates that it is “FOR PUBLICATION,” it is subject to revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
SUE A. WILKS and MATTHEW W. WILKS, FOR PUBLICATION August 14, 2026 Petitioners-Appellees, 2:35 PM
v No. 375272 Tax Tribunal DEPARTMENT OF TREASURY, LC No. 24-000806
Respondent-Appellant.
Before: KOROBKIN, P.J., and RIORDAN and MARIANI, JJ.
KOROBKIN, P.J.
In this case under the General Property Tax Act, MCL 211.1 et seq., respondent, the
Department of Treasury, appeals by right the judgment of the Michigan Tax Tribunal granting a principal residence exemption (PRE) to petitioners, Sue Anne and Matthew Wilks.1 Under MCL 211.7cc(3)©, a property owner generally may not qualify for an exemption if they have “filed a nonresident Michigan income tax return.” We consider as a matter of first impression whether a property owner may claim a PRE when they initially filed a nonresident tax return but later filed an amended resident tax return. We conclude that the statute allows property owners to do so. Accordingly, the Tax Tribunal did not err by allowing petitioners to claim the exemption, and we therefore affirm.
I. BACKGROUND AND FACTS
In 2019, petitioners purchased property in Sault Sainte Marie, Michigan (the Michigan
property). Petitioners resided together in the State of Washington until the beginning of the COVID-19 pandemic in April 2020 when Sue Anne moved into the Michigan property to care for her elderly parents. Matthew remained in Washington. Shortly after Sue Anne was able to obtain a Michigan driver’s license in September 2020, petitioners claimed a PRE for the Michigan
1 Because petitioners share the same last name, we will refer to them individually by their first names.
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property on the basis of Sue Anne’s residency. Sue Anne continued to live at the Michigan property and petitioners claimed a PRE for 2020, 2021, 2022, and 2023.
Respondent sent a letter in October 2024 retroactively denying petitioners’ PRE claims for
2020 through 2023. Petitioners appealed this denial. Following an informal conference, respondent issued a decision and order of determination upholding the PRE denial on the grounds that petitioners did not submit sufficient evidence to prove that the property was Sue Anne’s principal residence during the tax years at issue and that petitioners filed a nonresident tax return in 2021.
Petitioners filed a petition in the Tax Tribunal contesting respondent’s denial of their
claimed PRE. At the hearing, petitioners explained that they did not file a tax return in 2020 and that they filed joint tax returns in 2021, 2022, and 2023. Initially, petitioners mistakenly filed a nonresident income tax return in 2021 and did not realize their mistake until after the previous hearing with respondent. That is, petitioners had correctly indicated that Matthew was a nonresident but forgot to check the box to indicate that Sue Anne was a Michigan resident.2 Petitioners later amended their 2021 income tax return to reflect that Sue Anne was a Michigan resident and that Matthew was a nonresident. Additionally, petitioners noted that they did not file a tax return in Washington, which does not have a state income tax, or receive a tax exemption similar to a PRE there.
In response, respondent conceded that the PRE should have been granted in 2022 and 2023
because the original issues related to occupancy had been resolved. Respondent also conceded that there was “no issue with ownership or occupancy in 2020 and 2021,” but respondent argued that the Tax Tribunal should uphold the denial for 2020 and 2021 because petitioners filed a nonresident tax return in Michigan in 2021.3
In an opinion and judgment issued February 6, 2025, the Tax Tribunal reversed
respondent’s denial of petitioners’ PRE claim, finding that the property was entitled to a PRE of 100% for tax years 2020 to 2023. The Tax Tribunal explained its reasoning as follows:
Petitioners contend that [Sue Anne] qualifies for the exemption. In the brief
supporting the answer, Respondent alleges three reasons to uphold the PRE denial.
One reason, involving [Sue Anne] purportedly living in Leavenworth, Washington,
2 Spouses who file joint income tax returns but have different residency statuses are instructed to check a residency status for each spouse. See Michigan Department of Treasury, 2021 Michigan MI-1040 Individual Income Tax Forms and Instructions (accessed June 5, 2026), p 9 (“Line 8: Residency. Check the box that describes your Michigan residency . . . . If you and your spouse had a different residency status during the year, check a box for each of you.”) 3 Respondent also alleged that petitioners filed an income tax return as Washington residents in 2020, but the Tax Tribunal determined that petitioners did not file a 2020 income tax return in any state.
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and not at the subject property, was waived at hearing. A second reason was that Petitioners purportedly filed an income tax return in a state other than Michigan, and that state was Washington. However, as indicated by Petitioners in unrebutted testimony at the hearing, there is no income tax in the State of Washington.
The third reason for denial was Respondent’s contention that Petitioners
filed a nonresident Michigan income tax return for tax year 2021. Respondent’s
evidence shows that the original 2021 return shows non-resident status, contrary to
statute. However, Petitioners filed an amended return. The amended return splits
residency status, indicating that Sue Ann[e] was a resident and Matthew was a non-
resident. The amended return is supported by substantial evidence filed by
Petitioners to demonstrate Sue Ann[e]’s occupancy of the subject property in 2021,
including driver’s license, voter registration, and many personal documents.
Regarding the amended tax return, the Tribunal finds it is not prohibited. The
Legislature presumably sought to permit a party to amend the residency status of
their tax return. MCL 211.7cc(3)(a), by contrast, prohibits amending the status of
a substantially similar property tax credit in another state. The amended tax return
was timely filed and presumed to have been accepted.
All other elements of the exemption are shown to be met or not contested
by Respondent. Petitioners credibly testified that no 2020 income tax return was
filed. Given the above, Petitioners have demonstrated entitlement to the PRE for
each tax year at issue.
Respondent subsequently moved for reconsideration, arguing that the Tax Tribunal erred
by granting the PRE because petitioners had filed a nonresident tax return in 2021 in violation of MCL 211.7cc(3). The Tax Tribunal denied the motion for reconsideration, concluding that respondent had raised the same arguments previously presented.
This appeal followed.
II. STANDARD OF REVIEW
An appellate court’s “review of Michigan Tax Tribunal decisions is limited.” Campbell v
Dep’t of Treasury, 509 Mich 230, 237; 984 NW2d 13 (2022). “In the
Why this matters
The PRE removes 18 mills of local school operating tax from an owner’s primary home, so eligibility disputes carry meaningful annual savings for homeowners and revenue implications for local school districts. This ruling clarifies that Treasury cannot rely solely on an original nonresident income-tax filing to deny the exemption when the taxpayer later amends to claim Michigan residency, giving PRE claimants a documented path to cure filing mistakes.