The Great Lakes State generates a lot of wealth and has a flat income tax rate, so filing your Michigan state tax return can be relatively easy. Let’s look at Michigan individual income tax and what you need to know to file your state income tax return.
- michigan state tax basics
- michigan deductions, exemptions and credits to know
- how to file your michigan state tax return
- if you owe and cannot pay
- follow up from your michigan tax refund
michigan state tax basics
if you are a michigan resident for all or part of the tax year and you file a federal income tax return, you must file a michigan state income tax return, even if you do not owe any state tax. If you don’t file a federal return, you may need to file a Michigan state return if your annual gross income exceeds your exemption allowance. And if you don’t live in Michigan but earn income there, you may need to file a Michigan state return and pay taxes on certain types of income earned.
if you live in another state and work in michigan, you must file a form mi-1040, the equivalent of the federal form 1040, showing your michigan earnings. But this does not apply if you are a resident of a reciprocal state (Illinois, Indiana, Kentucky, Minnesota, Ohio, or Wisconsin) and the employee’s compensation was your only income in Michigan. In that case, you would file a Michigan state return only if you wanted to claim a refund of any Michigan withholding tax.
here are a few things that might make the process easier.
tax agency
The Michigan Department of the Treasury administers the tax laws and collects taxes in Michigan. You can call the department with general tax inquiries at 1-517-636-4486 and check out other income tax resources online, including information on tax rates, forms and instructions, how to file your returns, and the status of your refund.
submission and payment deadline
For 2019 state taxes, the state has extended the filing and payment deadline. michigan residents now have until july 15, 2020 to file their state returns and pay any state taxes due for 2019. as with the federal deadline extension, michigan will not charge interest on unpaid balances between April and July 15, 2020.
You don’t need to do anything to get this extension. it’s automatic for all michigan taxpayers.
although this year is a little different, michigan tax day is generally april 15, the same annual deadline to file your federal income tax return with the irs. if the due date falls on a weekend or holiday, the due date will be moved to the next business day.
marital status
michigan offers only three filing statuses for individuals: single, married filing jointly, and married filing separately. If your federal return status is Married Filing Jointly, you must also choose the same state on your Michigan return. If you filed your federal return as head of household or qualifying widow(er), you must file as single.
michigan income tax rate(s)
When calculating your Michigan state income tax, you won’t have to mess around with income brackets and tax rates, as the state charges a flat personal income tax rate of 4.25% .
michigan deductions, exemptions and credits to know
personal exemptions
In 2018, the michigan legislature passed a law that retains and increases the state’s personal exemptions, which would have disappeared if the state had followed the federal tax cuts and jobs act of 2017. for 2019, the amount of the personal exemption is $4,400.
There are additional exemptions for the following:
- $400
standard deduction
Michigan’s standard deduction is only available if a taxpayer (or spouse if married filing jointly) was age 67 or older on or before December 30. January 31, 2019. Taxpayers who meet the age criteria can take a deduction of $20,000 if they file as single or married filing separately, or $40,000 if their filing status is married filing separately. joint. But they can’t deduct retirement and pension income on their Michigan state return if they qualify for the Michigan standard deduction.
michigan state tax deductions
When filing a Michigan state tax return, you may be able to claim deductions on the Michigan Schedule 1 form. available deductions include…
- renaissance zone deduction, if you meet income, residency, and other requirements
- charitable contributions made to the michigan education trust charitable tuition program during the tax year
- price paid during the fiscal year to purchase a michigan education trust 529 prepaid tuition contract
- qualified contributions made during the fiscal year to the michigan education savings program are subject to certain limitations and caps
michigan state tax credits
You may be eligible for tax credits at the state level. in 2017, available credits included…
- Family Property Tax Credit: This can help cover some of your property taxes if you are a qualified Michigan homeowner or renter and meet certain requirements. the amount of the credit is generally based on the household’s total resources. for 2019, the limit for household resources is $60,000 and the maximum credit amount is $1,500.
- earned income tax credit: if you qualify and receive The Federal Low Income Earned Income Tax Credit is also eligible for the Michigan Earned Income Credit. the state-level credit is worth 6% of the federal credit you received.
- credit for income tax paid to government units outside of michigan: this may include income tax rent paid to a non-reciprocal entity state, local government (including in a reciprocal state), the district of columbia or a Canadian province.
how to file your michigan state tax return
- You can file your michigan state tax return online using a paid tax professional or one of the software providers listed on the michigan treasury website. Some providers may charge fees, so review the terms, conditions, and costs before choosing an electronic file provider.
- You can submit a paper return. download tax forms, including mi-1040, from the treasury department website.
by mailing in your paper return and applicable tax forms:
- if you have a refund, credit, or zero returns, mail your return to the michigan treasury department, lansing, mi 48956.
- if a payment is due, mail your return to the department Treasure Michigan, Lansing, MI 48929.
online tax payment:
- Use a chargeable debit or credit card through the Treasury Department’s electronic payment system.
- Pay by electronic check, free of charge, if you filed an income statement Michigan tax return from the previous year and your current address is the same as before.
if you owe and cannot pay
You must pay your Michigan state taxes by the annual due date if you want to avoid a late payment penalty and interest charges on the amount due.
If you can’t pay what you owe, you should still file your Michigan state tax return before the due date, and then you can arrange to pay the amount you owe later. But you must wait until you receive a “tax due bill” notice from the Michigan Department of the Treasury to request an installment agreement. however, before you receive notice, you may pay any amount using the state’s electronic payment system.
track your michigan tax refund
michigan offers a where’s my refund? tool to help you track your state refund. Please allow two weeks on an electronically filed return or six to eight weeks on a paper return before checking the status of your refund.
end result
michigan has a flat tax rate rather than income-based tax brackets, so completing and filing your state income tax return is less of a hassle than in many other states. If you’re expecting a refund, you can sign up for direct deposit at the bottom of your tax return to eliminate the possibility of a lost or stolen refund check.
a senior specialist in credit karma products, janet murphy is a CPA with over a decade in the tax industry. She has worked as a tax analyst, tax product development manager, and tax accountant. She has accounting degrees and certifications from Clemson University and the United States. career institute you can find it on linkedin.