Michigan Tax Form MI-1040 - Individual Income Tax Return Instructions
Important News for 2008
Earned Income Tax Credit (EITC)-For tax year 2008, a taxpayer may claim a Michigan EITC equal to 10 percent of the federal EITC for which the taxpayer is eligible. If you are not eligible for a federal credit, you are not eligible for a Michigan credit. Enter your federal EITC on MI-1040, line 31a, and 10 percent of line 31a on line 31b.
Use Tax-Every state that has a sales tax has a companion tax for purchases made outside that state, by catalog, or over the Internet. In Michigan, that companion tax is called the “use tax,” but might be described more accurately as a remote sales tax because it is a 6 percent tax owed on purchases made outside of Michigan. See page 9 for more information on use tax.
Tax Rate, Exemption Allowances, and Pension and Interest Deductions-The income tax rate for 2008 is 4.35 percent.
For tax year 2008, the personal exemption allowance increased to $3,500 and the special exemptions allowance remained at $2,200. See page 10 for more information.
For tax year 2008, pension benefits included in AGI from a private pension system or an Individual Retirement Account (IRA) are deductible to a maximum of $43,440 for a single filer or $86,880 for joint filers.
Senior citizens age 65 or older may be able to deduct part of their interest, dividends, and capital gains that are included in AGI. For 2008, the deduction is limited to a maximum of $9,690 for single filers and $ 9,380 for joint filers. See Schedule instructions beginning on page 2 for further details regarding pension benefits and senior citizen interest deductions.
New Exemption for Qualified Disabled Veterans-Taxpayers who either have a service-connected disability or have a dependent with a service-connected disability may be eligible to claim a $250 exemption for tax year 2008. See the instructions for line 9e on page 10.
New Voluntary Contributions Schedule-Michigan taxpayers can contribute $5, $10, or more to any of the following funds on Form 4642, Voluntary Contributions Schedule:
Amanda’s Fund for Breast Cancer Prevention and Treatment-Contributions to Amanda’s Fund for Breast Cancer Prevention and Treatment will be an additional source of funding to provide breast cancer screening, follow-up care, and treatment to an expanded number of low income women served through the Michigan Breast and Cervical Cancer Control Program. Your contribution will increase your tax due or reduce your refund. See page .
Animal Welfare Fund-Contributions to the Animal Welfare Fund will go to Michigan animal shelters and nonprofit organizations in the form of grants to help finance the spaying and neutering of homeless pets, promote the importance of spaying and neutering animals to the community, educate the public on the proper care of animals, and finance the costs of caring for and protecting animals involved in neglect or cruelty cases. Your contribution will increase your tax due or reduce your refund. See page .
Michigan Housing and Community Development Fund-Michigan income taxpayers can now voluntarily contribute $5 or more to the Housing and Community Development Fund. The fund’s purpose is to transform Michigan’s economy by improving the quality of life through affordable housing and economic development. Creating strong communities where families can prosper and businesses can grow will attract and keep our workers and our jobs here in Michigan. Your contribution will increase your tax due or reduce your refund. See page .
Prostate Cancer Research Fund-Contributions to the Prostate Cancer Research Fund will be used to fund prostate cancer research in Michigan. Your contribution will increase your tax due or reduce your refund. See page .
Michigan Law Enforcement Officers MemorialMonument Fund-Contributions to the Michigan Law Enforcement Officers Memorial Monument Fund will provide the additional monies needed to complete this memorial monument to the more than 500 law enforcement officers from across Michigan who died in the line of duty in service to their communities. Your contribution will increase your tax due or reduce your refund. See page .
Filing Extension Granted for MilitaryPersonnel Serving in a Combat Zone-United States military personnel serving in a combat zone on April 15, 2009, will be given 80 days after leaving the combat zone to file their federal and state tax returns and will be exempt from penalties and interest. Service men and women serving in combat zones must print “Combat Zone” in ink on the top of page of their MI-1040. Visit Treasury’s Web site at www.michigan.gov/taxes for more information.
Pension Interest/Dividends/Capital Gain Estimator-Certain amounts of pension interest/dividends/capital gains and pension distributions are subtractable from taxable income. A new online estimator is available to assist taxpayers in determining what amounts can be subtracted. Visit Treasury’s Web site at www.michigan.gov/taxes and select Pension Estimator from the Quick List, Services dropdown menu.
Mailing of Preprinted MI-1040ES Forms-Effective January 2009, Treasury will not mail preprinted Michigan Estimated Income Tax Voucher (MI-1040ES) forms to taxpayers who used tax preparers to complete and file their 2007 tax returns.
Postal Changes-Effective May 2007, the U.S. Post Office calculates postage based on the weight, size, and thickness of an envelope. Consult with the Post Office before mailing to avoid delays in delivery; items with insufficient postage will be returned to the sender by the Post Office.
Federal Economic Stimulus Payments-Federal economic stimulus payments (rebates) issued by the Internal Revenue Service (IRS) in 2008 are not taxable in Michigan. These rebates should not be included in adjusted gross income or household income for the 2008 tax year, and do not impact any calculations on the Michigan return.
Appeals of Adjusted Refunds or Credits-Taxpayers have 60 days from the issuance of refund denials, refund adjustments, or Treasury decisions (other than final assessment), that may be appealed under Section 22 of the Revenue Act, to request informal conferences.
Renaissance Zones-Certain Renaissance Zones, along with the tax benefits, will continue to phase out. See instructions for Schedule , line 5, on page 4.
Property Tax Credits/Refunds-A reminder from the IRS. Michigan homestead property tax credit and homestead exemption refunds received in 2008 may be taxable on your 2008 U.S. Form 1040. If you claimed an itemized deduction for property taxes on your 2008 U.S. Form 1040 and then received a refund in 2008 from the State or your local unit of government for a portion of those taxes, you must include that refund as income on your 2008 U.S. Form 1040. If you have questions about the taxability (for federal tax purposes) of the refunds, call the IRS at 1-800-829-1040.
What You Should Know About Your Michigan 1099-G-If you itemized deductions on your 2007 federal income tax return and received a Michigan tax refund in 2008, you will be mailed a 2008 Michigan 1099-G in early 2009 that shows the amount of your 2007 refund that was issued in 2008. The refund amount will include any amounts credited forward to 2008 estimated tax, prior year refunds issued in 2008, refund amounts intercepted for back tax assessments or other debts (such as child support or court ordered garnishments), and any portion of a refund assigned to pay use tax or any amount you contributed as a voluntary contribution. The refund amount will not include homestead property tax credits, adoption credits, or other refundable tax credits claimed on the MI-1040. The 1099-G IS NOT A BILL. Visit www.michigan.gov/taxesfor more information about your Michigan 1099-G.
A Note About Debts-By law, any money you owe to the State and other agencies must be deducted from your refund or credit before it is issued. Debts include money you owe for past-due taxes, student loans, child support due the Friend of the Court, an IRS levy, money due a State agency, a court-ordered garnishment, or other court orders. Taxpayers who are married, filing jointly, may receive an Income Allocation to Non-Obligated Spouse (Form 743) after the return is filed. Completing and filing this form may limit the portion of the refund that can be applied to a debt. If Treasury applies all or part of your refund to any of these debts, you will receive a letter of explanation.
Adjusted Gross Income (AGI)-Throughout this booklet, we refer to adjusted gross income as AGI. Copy your AGI directly from your U.S. Form 1040 line 37, or U.S. Form 1040A, line 2 .
Easy to Use Direct Deposit-For more information, see page 11.
Who Must File a Return-File a return if you owe tax, are due a refund, or your AGI exceeds your exemption allowance. You should also file a Michigan return if you file a federal return, even if you do not owe Michigan tax. This will eliminate unnecessary correspondence from Treasury.
- If your parents (or someone else) can claim you as a dependent on their return and your AGI is $ ,500 or less if single or married filing separately, you do not need to file a return unless you are claiming a refund of withholding.
- If single or married filing separately and your AGI is over $1,500 or if married filing jointly and your AGI is over $3,000, you must file a return. See instructions on page 10.
Important: If your income subject to tax (MI-1040, line 4) is less than your personal exemption allowance (line 5) and Michigan income tax was withheld from your earnings, you must file a return to claim a refund of the tax withheld.
Who Must File a Joint Return-File a joint Michigan return if you filed a joint federal return. If you filed separate federal returns, you may file separate or joint Michigan returns. You may file a joint return only with your spouse.
When to File Your Return-Always complete your federal tax return before your Michigan return. You may file a Michigan return even if you are not required to file a federal return.
Your return must be postmarked no later than April 15, 2009, to be considered timely. Payment must be included with your return. Make your check payable to “State of Michigan” and write your Social Security number(s) and “2008 income tax” on the front of the check. To avoid penalty and interest, if you owe tax, postmark no later than April 15, 2009.
If you cannot file before the due date and you owe tax, you may file an Application for Extension of Time to File Michigan Tax Returns (Form 4) with your payment. See page 6. If you are due a refund, you must file a return within four years of the due date to obtain the refund. Keep a copy of your return and all supporting schedules for six years.
Penalty and Interest Added for Filing and Paying Late-If you file and pay late, Treasury will add a penalty of 5 percent of the tax due. After the second month, penalty will increase by an additional 5 percent per month, or fraction thereof, up to a maximum of 25 percent of the tax due. If you pay late, you must add penalty and interest to the amount due. The interest rate through June 30, 2009, is 6.0 percent. For interest rates after June 30, 2009, visit Treasury’s Web site at www.michigan.gov/taxes or call 1-800-827-4000.
Choose e-file Instead of Paper Returns.Get Your Refund Fast! - E-filing eliminates many of the errors that lengthen processing times. Tax preparers who complete more than 200 income tax returns are required to e-file all eligible returns. Visit Treasury’s Web site at www.MIfastfile.orgto find an authorized e-file provider near you, a list of resources offering this service, and information on free e-file services.
How to Complete and File Paper Returns
Completing Your Forms
Treasury uses scanning equipment to capture the information from paper income tax returns. To avoid unnecessary delays caused by manual processing, follow
the guidelines below so your return is processed quickly and accurately.
- USE BLACK OR BLUE INK. Do not use pencil, red ink, or felt tip pens. Do not highlight information.
- PRINT USING CAPITAL LETTERS (UPPERCASE). Capital letters are easier to recognize.
- PRINT NUMBERS LIKE THIS: 0123456789 Do not put a slash through the zero or seven .
- LEAVE LINES/BOXES BLANK if they do not apply to you or if the amount is zero (unless otherwise directed).
- DO NOT WRITE EXTRA NUMBERS, SYMBOLS, OR NOTES on your return, such as cents, dashes, decimal points, or dollar signs. Enclose any explanations on a separate sheet unless you are instructed to write explanations on your return.
- STAY WITHIN THE LINES when entering information in boxes.
- USE WHOLE DOLLARS. Round down amounts less than 50 cents. Round up amounts of 50 cents through 99 cents. Do not enter cents. For example: 129.49 becomes 29, and 29.50 becomes 30.
When You Have Finished
If the preparer is someone other than the taxpayer, he or she must enter the business name and address of the firm he or she represents and Preparer Tax Identification Number (PTIN), Federal Employer Identification Number (FEIN), or Social Security number (SSN). Check the box to indicate if Treasury may discuss your claim with your preparer.
Assemble your returns and attachments and staple in the upper-left corner. (Do not staple your check to your return.) If an Individual Income Tax Barcode Datasheet (Form 4220) is part of your filing, it must be the first item in the sequence followed by MI-1040. A sequence number is printed in the upper-right corner of the following Michigan forms to help you assemble them in the correct order behind your MI-1040:
- Schedule and Schedule 2
- Nonresident and Part-year Resident (Schedule NR)
- Farmland Credit (MI-1040CR-5)
- Schedule CR-5
- Property Tax Credit (MI-1040CR or MI-1040CR-2)
- College Tuition Credit (Schedule CT)
- Federal schedules (see Table 2, page 2)
- Schedule of Apportionment (MI-1040H)
- Qualified Adoption Expenses (MI-8839)
- Underpayment of Estimated Income Tax (MI-2210)
- Schedule of Withholding (Schedule W)
- Adjustments of Capital Gains and Losses (MI-1040D)
- Adjustments of Gains and Losses From Sales of Business Property (MI-4797)
- Voluntary Contribution Schedule (4642)
- Farmland Preservation Tax Credit (4594, formerly C-8022)
If you are also filing a Home Heating Credit Claim (MI-1040CR-7) do not staple it to your return; fold it and leave it loose in the envelope.
Important Reminder: If you do not include all the required attachments with your return, your refund may be reduced, denied, or delayed. Send original forms. Do not send photocopies.
Do not staple multiple prior year returns together.
Mailing Labels
Review the label on the back cover of this booklet. If your name and address are correct and your filing status is the same as last year (single, married filing jointly, or married filing separately), place the label on the top of page of your tax return. It is important that you place your label in the space provided.
If the information on your label is not correct, do not use the label. Enter the correct information on your return.
Where to Mail Your Return
Mail refund, credit, or zero due returns to:
Michigan Department of Treasury
Lansing, MI 48956
If you owe tax, mail your return to:
Michigan Department of Treasury
Lansing, MI 48929
Make check payable to “State of Michigan” and print your Social Security number and “2008 income tax” on the front of your check. To ensure accurate processing of your return, send one check for each return type. Do not staple your check to your return.
Do not mail your 2008 return in the same envelope with a return for years prior to 2008; mail your 2008 return in a separate envelope.
Special Situations
Extensions
To request more time to file your Michigan tax return, send a payment of your estimated tax to Treasury with a copy of your approved federal extension (U.S. Form 4868) on or before the original due date of your return. Treasury will extend the due date to your new federal due date. If you do not have a federal extension, file an Application for Extension of Time to File Michigan Tax Returns (Form 4) with your payment. Treasury will not notify you of approval. Do not file an extension if you will be claiming a refund.
An extension of time to file is NOT an extension of time to pay. If you do not pay enough with your extension request, you must pay interest on the unpaid amount. Compute interest from the original due date of the return. Interest is percent above the prime rate and is adjusted on July and January .
You may be charged a penalty of 10 percent or more if the balance due is not paid with your extension request.
When you file your MI-1040 return, include on line 33 the amount of tax you paid with your extension request. Attach a copy of your federal or State extension to your return.
2009 Estimated Payments
Usually, you must make estimated income tax payments if you expect to owe more than $500 when you file your 2009 MI-1040. This is after crediting your property tax and farmland preservation credits and amounts you paid through withholding.
Common income sources which make estimated payments necessary are self-employment income, salary and wages if you do not have enough tax withheld, tips, lump sum payments, unemployment benefits, dividend and interest income, income from the sale of property (capital gains), and rental income.
You may ask your employer to increase your withholding to cover the taxes on other types of income.
Estimated payments are due April 15, 2009; June 15, 2009; September 15, 2009; and January 15, 2010. If you are a fiscal year filer, the due dates are the same as your federal estimated payment due dates.
If you filed estimates for 2008, Treasury will send you personalized forms for 2009, unless you used a tax preparer (see page 3). Otherwise, request Michigan Estimated Income Tax Voucher (MI-1040ES).
Exceptions. If you owe more than $500, you may not have to make estimated payments if you expect your 2009 withholding and credits to be at least:
- 90 percent of your total 2009 tax, or
- 100 percent of your total 2008 tax.
Total 2008 tax is the amount on your 2008 MI-1040, line 20, less the amount on lines 27, 28, 29, 30, and 31.
Note: 2009 estimates for taxpayers with 2008 AGI of $ 50,000 or more for joint or single filers ($75,000 or more for married filing separate) must equal 90 percent of the current year’s liability or 10 percent of the previous year’s liability.
Farmers, fishermen, or seafarers may have to pay estimates, but have different filing options. If at least two-thirds of your gross income is from farming, fishing, or seafaring, you may:
- Delay paying your first 2009 quarterly installment (with MI-1040ES) until as late as January 15, 2010, and pay the entire amount of your 2009 estimated tax due, or
- File your 2009 MI-1040 return and pay the entire amount of tax due on or before March 1, 2010.
You are considered a farmer or fisherman if you file U.S. Schedule F or Schedule C. Wages earned as a farm employee or from a corporate farm do not qualify you for this exception. You are considered a seafarer if your wages are exempt from income tax withholding under Title 46, Shipping, USC, Sec.11108.
Failure to make payments or underpayment of estimates. If you fail to make required estimated payments, pay late, or underpay in any quarter, Treasury may charge penalty and interest. Penalty is 25 percent of the tax due (with a minimum of $25) for failing to file estimate payments or 10 percent (with a minimum of $ 10) for failing to pay enough with your estimates or paying estimates late. Interest is percent above the prime rate and is computed monthly. The rate is adjusted on July and January .
Residency
Resident. You are a Michigan resident if Michigan is your permanent home. Your permanent home is the place you intend to return to whenever you go away. A temporary absence from Michigan, such as spending the winter in a southern state, does not make you a part-year resident.
Income earned by a Michigan resident in a nonreciprocal state (see “Reciprocal States” on page 7) or Canadian province is taxed by Michigan, and may also be taxed by the other jurisdiction. If you pay tax to both, you can claim a credit on your Michigan return. See instructions for line 5 of Schedule 2 and the example on page 6.
Part-year resident. You are a part- year resident if, during the year, you move your permanent home into or out of Michigan. You must pay Michigan income tax on income you earned, received, or accrued while living in Michigan.
Use Michigan Nonresident and Part-year Resident Schedule (Schedule NR) and the following guidelines to help you figure your tax:
- Allocate your income from the date you moved into or out of Michigan.
- Bonus pay, severance pay, deferred income, and any other amount accrued while a Michigan resident are subject to Michigan tax no matter where you lived when you received it.
- Deferred compensation reported to you on U.S. Form 1099-R and dividend and interest income are allocated to the state of residence when received.
- Part-year residents who lived in Michigan at least six months of the tax year may qualify for a homestead property tax credit (see page 9).
Note: Out-of-state students who live in Michigan while they are attending school are not considered Michigan residents or part-year residents and should file as a nonresident.
Nonresident. Use Schedule NR to figure your Michigan taxable income. You must pay Michigan income tax on the following types of income:
- Salary, wages, and other employee compensation for work performed in Michigan, unless you live in a state covered by a reciprocal agreement (see “Reciprocal States” below)
- Net rents and royalties from real and tangible personal property in Michigan
- Capital gains from the sale or exchange of real property located in Michigan, or of tangible personal property located in Michigan
- Patent or copyright royalties if the patent or copyright is used in Michigan or if you have a commercial domicile in Michigan
- Income (including dividend and interest income) from an S corporation, partnership or an unincorporated business, or other business activity in Michigan
- Lottery winnings
- Prizes won from casinos or licensed horse tracks located in Michigan. Nonresidents from reciprocal states must also declare these prizes as taxable.
Reciprocal States
Illinois, Indiana, Kentucky, Minnesota, Ohio, and Wisconsin have reciprocal agreements with Michigan. Michigan residents pay only Michigan income tax on their salaries and wages earned in any of these states. A Michigan resident can file a withholding form with an employer in a reciprocal state to claim exemption from that state’s income tax withholding. The out-of-state income might make Michigan income tax estimate payments necessary. Residents of reciprocal states working in Michigan do not have to pay Michigan tax on salaries or wages earned in Michigan but do have to pay Michigan tax on business income earned from business activity in Michigan. A resident of a reciprocal state who claims a refund of Michigan withholding tax must file a Schedule NR.
Deceased Taxpayers
A personal representative for the estate of a taxpayer who died in 2008 (or 2009 before filing a 2008 return) must file if the taxpayer owes tax or is due a refund. A full-year exemption is allowed for a deceased taxpayer on the 2008 MI-1040.
Use the deceased’s Social Security number and your address. If the taxpayer died after December 31, 2007, check the appropriate box(es) in the “Deceased Taxpayers” section on the bottom of page 2 on MI-1040.
The surviving spouse may file a joint return for 2008. Write your name and the deceased’s name and both Social Security numbers on MI-1040. Write “DECD” after the deceased’s last name. You must report the deceased’s income. Sign the return. In the deceased’s signature block, write “Filing as surviving spouse.” If the taxpayer died after December 31, 2007, check the appropriate box(es) on page 2 of the MI-1040. See “Deceased Taxpayer Chart of Examples” on page 47, example A.
If filing as a personal representative or claimant and you are claiming a refund for a single deceased taxpayer, you must attach a Statement of Person Claiming Refund Due a Deceased Taxpayer (U.S. Form 1310) or Michigan Claim for Refund Due a Deceased Taxpayer (MI-1310). Enter the deceased’s name in the Filer’s Name fields and the representative’s or claimant’s name in the Spouse’s Name fields. See “Deceased Taxpayer Chart of Examples” on page 47, example B or C.
If filing as a personal representative or claimant of a deceased taxpayer(s) for a jointly filed return, you must attach a Statement of Person Claiming Refund Due Deceased Taxpayer (U.S. Form 1310) or Michigan Claim for a Refund Due a Deceased Taxpayer (MI-1310). Enter the names of the deceased persons in the Filer’s and Spouse’s Name fields and the representative’s or claimant’s name, title, and address in the Home Address field. See “Deceased Taxpayer Chart of Examples” on page 47, example D or E.
For information about filing a credit claim, see “Deceased Claimant’s Credit” on page 19.
Amended Returns
If you need to make a correction to your return, file an Amended Michigan Individual Income Tax Return (MI-1040X). If you are due a refund on your amended return, you must file it within four years of the due date of the original return.
If a change on your federal return affects Michigan taxable income, you must file MI-1040X within 20 days of the change. Include payment of any tax and interest due.
You can amend a homestead property tax credit claim by filing a revised claim form clearly marked “Amended.”
Net Operating Losses (NOL)
If you have a federal NOL deduction, you must add back the federal deduction on your Michigan Schedule , line 5, to the extent included in federal AGI. A subtraction for a Michigan NOL deduction may be claimed on Schedule , line 20, and is calculated on page of Application for Michigan Net Operating Loss Refund (MI-1045). Compute your Michigan NOL and Michigan NOL deduction by completing the MI-1045. File MI-1045 to claim a refund for a carryback deduction. Returns for tax years affected by carryforward deductions must have MI-1045 attached to substantiate the deduction.
Repayments of Income Reported in a Prior Year
If you had to repay an amount of money in 2008 which you claimed as income in a previous year (e.g., unemployment benefits), you may be entitled to a credit on your 2008 return for the tax paid in an earlier year.
If you subtracted the repayment in arriving at AGI, no additional credit is allowed on the Michigan return because your income for the year has been reduced by the repayment amount. If the amount of the repayment was deducted on U.S. Schedule A or a credit was claimed on U.S. Form 1040, line 68, a credit will be allowed on the Michigan return. To compute your Michigan credit, multiply the amount you repaid in 2008 by the tax rate which was in effect the year you paid the tax. Then add the amount of the credit to the Michigan tax withheld on MI-1040, line 32. Write “Claim of Right/ Repayment” next to line 32.
Attach a schedule showing the computation of the credit, proof of the repayment, and pages and 2 of your U.S. Form 1040 and Schedule A if applicable.
Use Tax
Every state that has a sales tax has a companion tax for purchases made outside that state, by catalog or over the Internet. In Michigan, that companion tax is called the “use tax,” but might be described more accurately as a remote sales tax because it is a 6 percent tax owed on purchases made outside of Michigan.
Use tax is due on mail order and Internet purchases made from out-of-state sellers as well as purchases while traveling in foreign countries when the items are to be brought in to Michigan. Use tax must be paid on the total price (including shipping and handling charges).
How to Pay Use Tax.Use Worksheet below to calculate your tax and enter the amount of tax due on line 25 of MI-1040.
Worksheet Calculation.
Line 1: For purchases of $0 - $ 1,000, if you know the amount, multiply your total purchases times 6 percent (0.06) and enter the amount on Line , or For purchases under $ 1,000, if you have incomplete or inaccurate receipts to calculate your purchases, you may use Table -Use Tax to estimate your taxes. (See the example below.)
Line should contain a number unless you made no purchases under $ 1,000 subject to the use tax. If we later determine that you owe use tax, you may be subject to penalty and interest.
Line 2: In all cases, if a single purchase is $ 1,000 or more, you must pay 6 percent use tax on those purchases.
Example: Kurt ordered a computer from a catalog retailer in New York for $ ,437.50. Kurt also purchased items over the Internet for less than $1,000 during the year, but lost his receipts. He is sure he did not pay Michigan sales tax. Kurt’s AGI is $46,500. Kurt would complete Worksheet as follows:
Line 1: Kurt selects $23 from the table based on his AGI ...$23.00
Line 2: Kurt enters $1,437.50 x 6 percent........... $86.25
Line 3: Total use tax due ..$109.25
Kurt would enter $109 (no cents) on his 2008 MI-1040, line 25.
WORKSHEET 1 - USE TAX
| Line 1: Itemized purchases of $0 to $ 1,000 x 6 percent (0.06) OR Use Tax table amount ....... | $ ______ |
| Line 2: Single purchases $ 1,000 or more x 6 percent (0.06)... | $ ______ |
| Line 3: Total Use Tax Due (total of Lines 1 and 2).... | $ ______ |
| Enter amount from Line 3 above on your 2008 MI-1040, Line 25. If the amount on Line 3 is 0, enter “0” on your 2008 MI-1040, Line 25. | |
Estimating your taxes does not preclude Treasury from auditing your account. If additional tax is due, you may receive an assessment for the amount of the tax owed, plus applicable penalty and interest.
Use Tax on the Difference. If you paid at least 6 percent to another state on your purchase, you do not owe use tax to Michigan. If you paid less than 6 percent, you owe the difference.
Note: The full 6 percent use tax is owed on purchases made in a foreign country.
Line-by-Line Instructions for MI-1040
Lines not listed are explained on the form.
Line 1
Only married filers may file joint returns. Include name and address unless you use the label supplied with your instruction booklet.
Lines 2 and 3
Write your Social Security number(s) here even if you use a label.
Line 5: State Campaign Fund
These funds are disbursed only to candidates for governor, regardless of political party, who agree to limit campaign spending and meet the campaign fund requirements. Choosing “Yes” will not raise your tax or reduce your refund.
Line 6
Only farmers, fishermen, and seafarers should check this box. (For estimate filing information, see page 6.)
Line 7: Filing Status
Check the box to identify your filing status. If you file a joint federal return, you must file a joint Michigan return and you cannot be claimed as a dependent on another person’s tax return. Married couples who file separate federal returns may file a separate or joint Michigan return. If you are claiming a homestead property tax credit or other tax credits, it may be easier to file a joint Michigan return because total (joint) household income is the basis for computing these credits. If your status is married filing separately (box c), write your spouse’s full name in the space provided and be sure to write his or her Social Security number on line 3. If you filed your federal return as head of household or qualifying widow(er), you must file the Michigan return as single.
Line 8: Residency
Check the box that describes your Michigan residency for 2008. If you and your spouse had a different residency status during the year, check a box for each of you. Both part-year residents and nonresidents must file Schedule NR. (For definition of residency, see page 6.)
Line 9: Exemptions
Use this line to compute your Michigan exemption amount plus your Michigan special exemptions.
- Enter the number of exemptions you claimed on your U.S. Form 1040 or 1040A, line 6d. These exemptions are for you, your spouse (if filing jointly), and your dependents.
Multiply the number of exemptions by your exemption allowance of $3,500 and enter that amount in the box.
Exemptions. Complete the lines that apply to you, your spouse, or dependents as of December 31, 2008. If your dependent files an annual return, you and your dependent may not both claim the special exemption.
- Age 65 or older. You are considered age 65 the day before your 65th birthday. If you claim this exemption, you may not claim an exemption as totally and permanently disabled.
- Deaf, Blind, or Disabled. You qualify for this exemption if you are deaf, blind, hemiplegic, paraplegic, quadriplegic, or totally and permanently disabled. Deaf means the primary way you receive messages is through a sense other than hearing, for example, lip reading or sign language. Blind means your better eye permanently has 20/200 vision or less with corrective lenses, or your peripheral field of vision is 20 degrees or less. Totally and permanently disabled means disabled as defined under Social Security Guidelines 42 USC 4 6. If you are age 65 or older, you may not claim an exemption as totally and permanently disabled. You may claim only one exemption per person in this category.
- Child 18 and Under. Enter $600 for each child 18 and under as of December 31, 2008, whom you claim as a dependent.
- Qualified Disabled Veterans. A taxpayer may claim an exemption of $250 in addition to the taxpayer’s other exemptions if (a) the taxpayer or spouse is a qualified disabled veteran, or (b) a dependent of the taxpayer is a qualified disabled veteran. To be eligible for the additional exemption an individual must be a veteran of the active military, naval, marine, coast guard, or air service who received an honorable or general discharge and has a disability incurred or aggravated in the line of duty as described in 38 USC 101 (16). This additional exemption may not be claimed on more than one tax return.
- Unemployment compensation. Check this box if 50 percent or more of your combined AGI (MI-1040, line 10) is from unemployment compensation. If you checked the box, enter $2,200 in the space provided.
- If someone else can claim you as a dependent, check the box, complete Worksheet 2 below, and enter the amount from the worksheet in the space provided on line 9g.
WORKSHEET 2 Is your AGI (from your federal return) over $1,500 if single or married filing separately? YES. If single or married filing separately, enter “0” on line 9a and $1,500 on line 9g. Do not continue the rest of this worksheet. OR NO. Then was Michigan income tax withheld from your wages? Continue with the following two questions.
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Line 10: Adjusted Gross Income
Enter your AGI from your federal return. This is the amount from your U.S. Form 1040, line 37, or U.S. Form 1040A, line 21. You must attach copies of federal schedules that apply to you (see Table 2 on page 12). For Michigan adjustments to AGI, see Schedule 1, page 31. Instructions for completing Schedule 1begin on page 12.
Line 17: Tax
Multiply the amount on line 16 by 4.35 percent (0.0435). Enter here and on line 18.
Line 19: Nonrefundable Credits
Enter the total amount of nonrefundable credits from Schedule 2, line 9.
Line 21: Military Family Relief Fund
You may contribute to the Military Family Relief Fund by entering your contribution amount ($ minimum) here. This fund provides assistance to qualifying families of military members in either the Michigan National Guard who are serving in the U.S. Armed Forces or those reserve forces called to active duty by the federal government. Your contribution will increase your tax due or reduce your refund.
Line 22: Children’s Trust Fund
Help keep kids safe by preventing child abuse! You may contribute to the Children’s Trust Fund by entering your contribution amount ($5 or more) here. These contributions are returned to local communities in the form of grants to county- based prevention councils and direct service programs benefitting children and parents. Programs and services funded by these monies include parent education and support groups, newborn support services, local training, and public education and outreach. Your contribution will increase your tax due or reduce your refund.
Line 23: Children of Veterans Tuition Grant Program
Help send the child of a Michigan veteran to a Michigan college or university! Michigan income taxpayers can voluntarily contribute $2 or more to the Children of Veterans Tuition Grant Program by entering a contribution amount here. Contributions will be a key source of funding for the undergraduate tuition expenses of children of certain deceased or disabled veterans. Your contribution will increase your tax due or reduce your refund.
Line 24: Additional Voluntary Contributions
Taxpayers may designate contribution amounts to the following funds on Form 4642:
- Amanda’s Fund for Breast Cancer Prevention and Treatment
- Animal Welfare Fund
- Michigan Housing and Community Development Fund
- Prostate Cancer Research Fund
- Michigan Law Enforcement Officers Memorial Monument Fund
Attach Form 4642 to ensure your contributions are applied to the fund(s) of your choice. Contributions will increase your tax due or reduce your refund.
Line 25: Use Tax
Enter use tax due from Worksheet , line 3, on page 9.
Line 27
Property tax credit information begins on page 17.
Line 28
Farmland preservation credit applies to farmers only. See page 18.
Line 29: Qualified Adoption Expenses
Enter the amount from your Michigan Qualified Adoption Expenses (MI-8839), line 0. Attach a completed Qualified Adoption Expenses (U.S. Form 8839) and a completed MI-8839.
Line 30: Stillbirth Credit
If you are the mother of a stillborn delivered during 2008 and have been issued a Certificate of Stillbirth from the Michigan Department of Community Health, attach a copy of the certificate to MI-1040 and complete Worksheet 3.
If you do not have a certificate, contact the Michigan Department of Community Health at (517) 335-8666 for an application or information on obtaining the certificate. You should not file for the credit until you have the certificate. You can amend your 2008 return at a later date should you get the certificate after you file the original return.
WORKSHEET 3 - STILLBIRTH CREDIT |
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| A. Enter number of Certificates of Stillbirth for 2008 (see line 30 instructions below for qualifications) ......... | _________ |
| B. Multiply line A by $160. Enter here and carry amount to your MI-1040, line 30 .... | _________ |
Line 31. Michigan Earned Income Tax Credit (EITC)
Taxpayers who are eligible to claim an EITC on their federal return may claim a Michigan EITC equal to 10 percent of the taxpayer’s federal credit. To claim the Michigan credit, enter your federal EITC amount on line 31a and 10 percent of line 31a on line 31b.
Line 32
Enter the total Michigan tax withheld (from your Schedule W). If applicable, include any credit for repayments under the “Claim of Right.” See “Repayments of Income Reported in a Prior Year” on page 7.
Line 33
Enter the total estimated tax paid with your 2008 MI-1040ES, the amount paid with a Form 4, and the amount of your 2007 overpayment applied to this year’s tax (2007 MI-1040, line 35).
Line 35: Tax Due
If line 34 is less than line 26, enter the difference. This is the tax you owe with your return.
You will owe penalty and interest for late payment of tax. Penalty accrues monthly at 5 percent of the tax due, and increases by an additional 5 percent per month, or fraction thereof, after the second month, up to a maximum of 25 percent of the tax due (e.g. penalty on a $500 tax due will be $ 25 if the tax is unpaid for six months). See “Penalty and Interest Added for Filing and Paying Late” on page 4. Add penalty and interest to your tax due and enter the total on line 35. Generally, if you owe more than $500, you are required to make estimated payments. See special note below and information about estimated payments on page 6. If the balance due is less than $1 , no payment is required, but you must still file your return. See “Pay” address on page 2 of your MI-1040.
Special note for people required to file estimates. You may owe penalty and interest for underpayment, late payment, or for failing to make estimated tax payments. Use theUnderpayment of Estimated Income Tax (MI-22 0), to compute penalty and interest. If you do not file an MI-22 0, Treasury will compute your penalty and interest and send you a bill. If you annualize your income, you must complete and attach MI-22 0. Enter the penalty and interest amounts on the lines provided.
Line 38: Your Refund
This includes any tax you overpaid and any credits due you. The State does not refund amounts less than $1. Mail your return to the “Refund, credit, or zero returns” address on page 2 of MI-1040.
Direct Deposit
First check with your financial institution to:
- Ensure it will accept Direct Deposit;
- Obtain the correct Routing Transit Number and Account Number; and
- If applicable, verify that it will allow a joint refund to be deposited into an individual account.
If Treasury is unable to honor your request for Direct Deposit, you will be sent a check.
a. Routing Transit Number (RTN). Enter the nine-digit RTN. The RTN is usually found between the symbols |: and |: on the bottom of your check. The first two digits must be “01” through “12” or “21” through “32”.
b. Type of Account. Check the box for checking or savings.
c. Account Number. Enter your bank account number up to 7 characters (both numbers and letters). The account number is usually found immediately to the right of the RTN on the bottom of your check. Include hyphens but omit spaces and special symbols. Enter the number from left to right and leave unused boxes blank. Do not include the check number.
When You Are Finished
Sign Your Return. Each spouse must sign a joint return. If the preparer is someone other than the taxpayer, he or she must include the name and address of the firm he or she represents and preparer tax identification or federal employer identification number. Check the box to indicate if Treasury may discuss your return with your preparer.
Signing a child’s return. If a return is prepared for a child who is too young to sign it, a parent or guardian should sign the child’s name, then add “by (your name) parent (or guardian) for minor child.”
Attachments. Attach all your credit claims and required Michigan and federal schedules (see Table 2 above).
If you owe tax. Enclose your payment but do not staple it to the return. Checks stapled to the back of the return may not be seen and may result in improper processing.
The filing deadline to receive a refund for tax year 2008 is April 15, 2013.
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