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This article was fact-checked by our editors and CPA Janet Murphy, senior product specialist with Credit Karma Tax®. It has been updated for the 2019 tax year.
Michigan, the hub of the U.S. automobile industry, has been the home of Henry Ford, Madonna and Stevie Wonder.
The Great Lakes State generates a lot of wealth, and it has a flat income tax rate, so filing your Michigan state tax return can be relatively easy. Let’s look at Michigan’s individual income tax and what you need to know to file your state tax return.
- The basics of Michigan state tax
- Michigan deductions, exemptions and credits to know
- How to file your Michigan state tax return
- If you owe and can’t pay
- Tracking your Michigan tax refund
The basics of Michigan state tax
If you are a resident of Michigan 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 don’t owe any state tax. If you don’t file a federal return, you may still 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 Michigan state return and pay tax on certain types of earned income.
If you live in another state and work in Michigan, you must file an MI-1040 — the equivalent of the federal Form 1040 — showing your Michigan earnings. But this doesn’t apply if you’re a resident of a reciprocal state — Illinois, Indiana, Kentucky, Minnesota, Ohio or Wisconsin – and employee compensation was your only Michigan income. In that case, you’d file a Michigan state return only if you wanted to claim a refund of any Michigan withholding tax.
Here are a few things that could make the process easier.
The Michigan Department of Treasury administers 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 about tax rates, forms and instructions, filing your returns and the status of your refund.
Filing 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 tax they owe for 2019. As with the federal deadline extension, Michigan won’t charge interest on unpaid balances between April 15 and July 15, 2020.
You don’t need to do anything to get this extension. It’s automatic for all Michigan taxpayers.
While this year is a bit different, generally Michigan’s Tax Day is April 15 — the same as the annual deadline for filing your federal income tax return with the IRS. If the due date falls on a weekend or holiday, the deadline will be moved to the next business day.
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 status on your Michigan state 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, because the state charges a flat personal income tax rate of 4.25%.
Michigan deductions, exemptions and credits to know
In 2018, Michigan’s legislature passed a law that retains and increases the state’s personal exemptions, which would have gone away if the state had followed the federal Tax Cuts and Jobs Act of 2017. For 2019, the personal exemption amount is $4,400.
There are additional exemptions for the following:
- Those taxpayers who are deaf, blind, hemiplegic, paraplegic, quadriplegic, or totally and permanently disabled may be able to take an additional exemption of $2,700 per qualifying individual
- Qualified disabled veterans may take an additional $400 exemption
Michigan’s standard deduction is only available if a filer (or their spouse if married filing jointly) was 67 or older on or before Dec. 31, 2019. Filers who meet 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 jointly. 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
While filing a Michigan state tax return, you may be able to claim deductions on Michigan’s 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 tax year to buy a Michigan Education Trust 529 prepaid tuition contract
- Qualified contributions made during the tax year to the Michigan Education Savings Program subject to certain limitations and caps
Michigan state tax credits
You may be eligible for state-level tax credits. In 2017, available credits included …
- Homestead property tax credit: This can help cover part of your property taxes if you’re a qualified Michigan homeowner or renter and meet certain requirements. The amount of credit is typically based on total household 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 for and receive the federal earned income tax credit for lower-income earners, you are also eligible for the Michigan earned income credit. The state-level credit is worth 6% of the federal credit you received.
- Credit of income tax paid to government units outside Michigan: This can include income tax paid to a nonreciprocal state, local government (including in a reciprocal state), the District of Columbia or a Canadian province.
What is the federal earned income tax credit?
The federal earned income tax credit is designed to provide economic relief to lower-earning Americans. To qualify for this credit, you must have earned income and meet adjusted gross income limits that depend on your filing status and number of dependent children you claim.
How to file your Michigan state tax return
- You can file your Michigan state tax return online by using a paid tax professional or one of the software vendors listed on the Michigan Department of Treasury’s website, including Credit Karma Tax®, which is always free. Some providers may charge fees, so review terms, conditions and costs before choosing an e-file provider.
- You can mail a paper return. Download tax forms — including the MI-1040 — from the Department of Treasury website.
Mailing your paper return and relevant tax forms:
- If you have a refund, credit or zero returns, mail your return to Michigan Department of Treasury, Lansing, MI 48956.
- If a payment is due, send your return to Michigan Department of Treasury, Lansing, MI 48929.
Paying your tax online:
- Use a debit or credit card — for a fee — through the Department of Treasury’s e-Payments system.
- Pay by e-check — without a fee — if you filed a Michigan income tax return the previous year and your current address is the same as before.
If you owe and can’t pay
You should pay your Michigan state taxes by the annual deadline 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 still must file your Michigan state tax return by the due date and then you can arrange to pay the amount you owe later. But you must wait until you receive a “Bill for Taxes Due” notice from the Michigan Department of Treasury to request an installment agreement. Before getting the notice, however, you can pay any amount using the state’s e-Payments system.
Tracking your Michigan tax refund
Michigan offers a Where’s My Refund? tool to help you track your state refund. Wait two weeks on an e-filed return or six to eight weeks on a paper return before checking on your refund status.
Michigan has a flat tax rate instead of tax brackets based on income, so completing and filing your state income tax return is less complicated 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 chance of a lost or stolen refund check.
A senior product specialist with Credit Karma Tax®, Janet Murphy is a CPA with more than a decade in the tax industry. She’s worked as a tax analyst, tax product development manager and tax accountant. She has accounting degrees and certifications from Clemson University and the U.S. Career Institute. You can find her on LinkedIn.