Michigan Form Mi-1040 Instructions
New for 2013
- Michigan Standard Deduction. Taxpayers who reach the age of 67 during 2013 may deduct $20,000 for single or married, filing separately, or $40,000 for joint filers against all income. If you qualify for the Michigan Standard Deduction, you are not eligible to deduct pension and retirement benefits on the Michigan Pension Schedule (Form 4884).
- Social Security Act (SSA) Exempt. Taxpayers receiving retirement benefits from employment with a government entity not covered under the SSA may take an increased deduction for retirement benefits. See page 13 for more information.
Self Service Options
The Michigan Department of Treasury (Treasury) offers a variety of services designed to assist you, and most are available 24 hours a day, seven days a week.
IMPORTANT: To obtain information about your account using the Internet and Telephone Options listed below, you will need the following information from your return:
- Social Security number (SSN) of the primary filer (the filer listed first on the return)
- Tax year of the return
- Adjusted gross income (AGI) or total household resources
- Filing status (single, married filing jointly, married filing separately).
Find the following information on this Web site:
- Current year forms and instructions
- Answers to many tax preparation questions
- Most commonly used tax forms
- Free assistance in preparing your return
- Retirement, Pension, Interest, Dividends, Capital Gain Estimator
- Other tax resources.
This secure Web site was designed specifically to protect your personal tax information. Use this Web site to:
- Check the status of your return
- Check estimated payments you made during the year
- Check the status of letters you have sent to Treasury
- Change your address
- Ask a specific question about your account.
Automated Information Service. With Treasury's automated phone system, you can:
- Request the status of your refund
- Check the status of letters you have sent to Treasury
- Request information on estimated payments
- Order current tax year forms.
While most questions can be answered by the Automated Information Service, customer service representatives are available from 8 a.m. to 4:45 p.m., Monday through Friday.
Assistance is available using TTY through the Michigan Relay Service by calling 1-800-649-3777 or 711. Printed material in an alternate format may be obtained by calling (517) 636-4486.
Find tax forms using the Internet and Telephone Options listed on this page. Commonly used forms are also available at Treasury offices (see back cover), most public libraries, Northern Michigan post offices, and Department of Human Services (DHS) county offices.
Adjusted Gross Income (AGI)
Throughout this booklet, Treasury refers to adjusted gross income as AGI. When AGI is asked for, copy your AGI directly from your U.S. Form 1040, U.S. Form 1040A, or U.S. Form 1040EZ.
Tax Rate, Exemption Allowances, and Deductionsfor Retirees and Seniors
The income tax rate for 2013 is 4.25 percent.
For tax year 2013, the personal exemption allowance is $3,950 and the special exemption allowance for deaf, blind, hemiplegic, paraplegic, quadriplegic, or totally and permanently disabled is $2,500. See page 9 for more information.
Retirement/pension benefits included in AGI from a pension or an Individual Retirement Account (IRA) may be deductible. See Form 4884 instructions beginning on page 14 for further details regarding retirement/pension benefit deductions based on year of birth and filing status.
Senior citizens born before 1946 may be able to deduct part of their interest, dividends, and capital gains that are included in AGI. For 2013, the deduction is limited to a maximum of $10,767 for single filers and $21,534 for joint filers. See Michigan Schedule 1 (Schedule 1) instructions beginning on page 11 for further details regarding dividend/interest/capital gains deductions.
Small Business Investment Tax Credit (Venture Investment Credit)
The Small Business Investment Tax Credit (Venture Investment Credit) provides Qualified Investors a 25 percent tax credit over a two year period on Qualified Investments in Qualified Businesses. To qualify, investments had to be made after December 31, 2010 and before January 1, 2012. Taxpayers eligible for this credit received a certificate from the Michigan Strategic Fund Board, Small Business Investment Tax Credit Program. The certificate must be attached to the taxpayer's return.
Filing Extension Granted for MilitaryPersonnel Serving in a Combat Zone
United States military personnel serving in a combat zone on April 15, 2014, will be given 180 days after leaving the combat zone to file their federal and State tax returns and will be exempt from penalties and interest. When e-filing, service men and women serving in combat zones should enter the words "Combat Zone" in the preparer notes. When filing a paper return, print "Combat Zone" in ink on the top of page 1 of the MI-1040.
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.
Choose e-file Instead of Paper Returns. Get Your Refund Fast!
E-filing eliminates many of the errors that lengthen processing times. E-file returns are usually processed within 14 days. Tax preparers who complete 11 or more income tax returns are required to e-file all eligible returns. Visit www.MIfastfile.org for a list of e-file resources, how to find an e-file provider, and more information on free e-file services. When e-filing, do not mail a paper copy of your return.
Property Tax Credits/Refunds
A reminder from the Internal Revenue Service (IRS). Michigan homestead property tax credit and homestead exemption refunds received in 2013 may be taxable on your 2013 U.S. Form 1040. If you claimed an itemized deduction for property taxes on your 2012 U.S. Form 1040 and then received a refund in 2013 from the State or your local unit of government for a portion of those taxes, you must include that refund as income on your 2013 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 claimed itemized deductions on your 2012 federal income tax return and received a Michigan tax refund in 2013, you will be mailed a 2013 Michigan 1099-G in early 2014 that shows the amount of your 2012 refund that was issued in 2013. The refund amount will include any amounts credited forward to 2013 estimated tax, prior year refunds issued in 2013, 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, earned income tax credits, or other refundable tax credits claimed on your MI-1040. The 1099-G IS NOT A BILL. Visit www.michigan.gov/taxes for more information about your Michigan 1099-G.
A Note About Debts
By law, any money you owe to the state and other state 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.
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 $1,500 or less if single or married, filing separately or $3,000 or less if filing a joint return, you do not need to file a return unless you are claiming a refund of withholding.
Important: If your income subject to tax (MI-1040, line 14) is less than your personal exemption allowance (line 15) 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 and your spouse 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, 2014, to avoid penalty and interest. Payment must be included with your return. Make your check payable to "State of Michigan" and write your Social Security number(s) and "2013 income tax" on the front of the check.
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. This allows an extension of time to file, but not to pay. Payment is due no later than April 15, 2014, otherwise penalty and interest may apply. 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, 2014, is 4.25 percent. For interest rates after June 30, 2014, visit www.michigan.gov/taxes or call (517) 636-4486.
Certain Renaissance Zones, along with the tax benefits, will continue to phase out. See instructions for Schedule 1, line 15 on page 12.
How to Complete and File Paper Returns
Completing Michigan Forms
Treasury captures the information from paper income tax returns using an Intelligent Character Recognition (ICR) process. If completing a paper return, avoid unnecessary delays by following 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 (UPPER CASE). Capital letters are easier to recognize.
- Print numbers. Do not put a slash through the zero or seven.
- Fill check boxes with an [X]. Do not use a check mark.
- Leave lines/boxes blank if they do not apply or if the amount is zero unless otherwise directed.
- Do not write extra numbers, symbols, or notes on the return, such as cents, dashes, decimal points, commas, or dollar signs. Enclose any explanations on a separate sheet unless you are instructed to write explanations on the return.
- Stay within the lines when entering information in boxes.
- If a form is multiple pages, all pages must be filed.
- Report all amounts in whole dollars. Round down amounts of 49 cents or less. Round up amounts of 50 cents or more. If cents are entered on the form, they will be treated as whole dollar amounts.
When You Have Finished
If the tax 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. Check the box to indicate if Treasury may discuss your return with your tax preparer.
Assemble your returns and attachments and staple in the upper-left corner. Do not staple your check to your return. 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:
- Additions and Subtractions (Schedule 1)
- Nonresident and Part-Year Resident (Schedule NR)
- Farmland Preservation Tax Credit (MI-1040CR-5)
- Schedule of Taxes and Allocation to Each Agreement (Schedule CR-5)
- Property Tax Credit (MI-1040CR or MI-1040CR-2)
- Federal Schedules (see Table 3, page 59)
- Schedule of Apportionment (MI-1040H)
- Underpayment of Estimated Income Tax (MI-2210)
- Withholding Tax Schedule (Schedule W)
- Adjustments of Capital Gains and Losses (MI-1040D)
- Adjustments of Gains and Losses From Sales of Business Property (MI-4797)
- Voluntary Contributions Schedule (4642)
- Sales and Other Dispositions of Capital Assets (MI-8949)
- Pension Schedule (4884)
- Pension Continuation Schedule (4973).
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.
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 your check payable to "State of Michigan" and print your Social Security number and "2013 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 2013 return in the same envelope with areturn for years prior to 2013; mail your 2013 return in a separate envelope.
- Missing pages. The MI-1040, MI-1040CR, MI-1040CR-2, MI-1040CR-7, MI-1040X-12 and MI-1040X are multiple- page forms. All pages must be completed and submitted for Treasury to process the form timely.
- Using correct tax year forms. Appropriate tax year forms must be filed (e.g., do not use a 2012 form to file your 2013 return).
Schedules received alone.
If the following forms are filed, all pages must be submitted with a completed MI-1040:
- Additions and Subtractions (Schedule 1)
- Nonresident and Part-Year Resident (Schedule NR)
- Withholding Tax Schedule (Schedule W) - attach a copy if reporting Michigan withholding
- Adjustments of Capital Gains and Losses (MI-1040D)
- Adjustments of Gains and Losses from Sales of Business Property (MI-4797)
- Voluntary Contributions Schedule (4642)
- Sales and Other Dispositions of Capital Assets (MI-8949)
- Historic Preservation Credit (3581)
- Pension Schedule (4884)
- Pension Continuation Schedule (4973).
- Missing, incomplete, or applied for Social Security number. If you don't have an SSN or an Individual Taxpayer Identification Number (ITIN), apply for one through the IRS. Do not file your Michigan return until you have received your SSN or ITIN.
(MI-1040CR-7), do not staple it to your return; fold it and leave it loose in the envelope.
To request more time to file your Michigan tax return, send a payment of your estimated tax to Treasury with a copy of your 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 1 percent above the prime rate and is adjusted on July 1 and January 1.
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, include on line 30 the amount of tax you paid with your extension request. Attach a copy of your federal or state extension to your return.
2014 Estimated Payments
Usually, you must make estimated income tax payments if you expect to owe more than $500 when you file your 2014 MI-1040. This is after crediting the property tax, farmland, any other refundable or nonrefundable credits, and amounts you paid through withholding.
Common income sources which make estimated payments necessary are self-employment income, salary, wages, or retirement benefits 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), business income 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, 2014; June 16, 2014; September 15, 2014; and January 15, 2015. 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 2013, Treasury will send you personalized forms for 2014, unless you used a tax preparer. Do not use forms intended for another taxpayer. If you do not receive personalized forms, use a tax preparer, or use tax preparation software to complete your return, you can obtain a Michigan Estimated Individual Income Tax Voucher (MI-1040ES) from Treasury's Web site.
Exceptions. If you expect to owe more than $500, you may not have to make estimated payments if you expect your 2014 withholding to be at least:
- 90 percent of your total 2014 tax, or
- 100 percent of your total 2013 tax.
Total 2013 tax is the amount on your 2013 MI-1040, line 21, less the amount on lines 25, 26, 27b and 28.
NOTE: 2014 estimates for taxpayers with 2013 AGI of $150,000 or more for joint or single filers ($75,000 or more for married, filing separately) must equal 90 percent of the current year's liability or 110 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 2014 quarterly installment (MI-1040ES) until as late as January 15, 2015, and pay the entire amount of your 2014 estimated tax due, or
- File your 2014 MI-1040 return and pay the entire amount of tax due on or before March 1, 2015.
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 one percent above the prime rate and is computed monthly. The rate is adjusted on July 1 and January 1.
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 MI-1040, line 18 and the example on page 10.
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 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 25).
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 nonresidents.
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.
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 may file a withholding form with an employer in a reciprocal state to claim exemption from that state's income tax withholding. The out-ofstate income may 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 along with an MI-1040.
A personal representative for the estate of a taxpayer who died in 2013 (or 2014 before filing a 2013 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 2013 MI-1040.
Use the decedent's Social Security number and your address. If the taxpayer died after December 31, 2012, enter the date of death in the "Deceased Taxpayer" box on page 2 on the 2013 MI-1040.
The surviving spouse is considered married for the year in which the deceased spouse died and may file a joint return for that year. Write your name and the decedent's name and both Social Security numbers on the MI-1040. Write "DECD" after the decedent's last name. You must report the decedent's income. Sign the return. In the deceased's signature line, write "Filing as surviving spouse." If the taxpayer died after December 31, 2012, enter the date of death in the "Deceased Taxpayer" box on page 2 of the MI-1040. See "Deceased Taxpayer Chart of Examples" on page 59, 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 U.S. Form 1310 or Michigan Claim for Refund Due a Deceased Taxpayer (MI-1310). Enter the decedent's name in the Filer's Name lines and the representative's or claimant's name, title, and address in the Home Address line. See "Deceased Taxpayer Chart of Examples" on page 59, 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 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 lines and the representative's or claimant's name, title, and address in the Home Address line. See "Deceased Taxpayer Chart of Examples" on page 59, example D or E.
For information about filing a credit claim, see "Deceased Claimant's Credit" on page 25.
If you need to make a correction to your 2012 or 2013 return, file a Michigan Amended Individual Income Tax Return (MI-1040X-12). If you need to make a correction to your 2011 or prior year return, file a Michigan Amended 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.
Once you file a joint return, you cannot choose to file separate returns for that year after the due date of the return.
If a change on your federal return affects Michigan taxable income, you must file an MI-1040X-12 or MI-1040X within 120 days of the change. Include payment of any tax and interest due.
To amend only a homestead property tax or home heating credit, file a revised claim form and print "Amended" on the top of page 1. Do not file an MI-1040X-12 or MI-1040X.
Net Operating Losses (NOL)
If you have a federal NOL deduction, you must remove the federal deduction to the extent included in federal AGI. Residents accomplish this through an addition on Schedule 1, line 7. Nonresidents accomplish this by allocating the entire NOL deduction to Column C on Michigan Schedule NR, no matter where earned.
A Michigan NOL deduction in a carryforward year may be claimed on the Schedule 1, line 21.
Part 1 of Application for Michigan Net Operating Loss Refund (Form MI-1045) is used to calculate the Michigan NOL for the loss year and a copy must be attached to returns to which the loss is carried forward. A separate worksheet showing how the loss has been used in years previous to and succeeding the loss year should always be submitted to verify the claimed carryforward. If carrying the loss back, Part 2 of Form MI-1045 must be filed.
Repayments of Income Reported in a Prior Year
If you had to repay money in 2013 that you claimed as income in a previous year (e.g., unemployment benefits), you may be entitled to a credit on your 2013 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, a credit will be allowed on the Michigan return.
To compute your Michigan credit, multiply the amount you repaid in 2013 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 29. Write "Claim of Right/Repayment" next to line 29.
Attach a schedule showing the computation of the credit, proof of the repayment, and pages 1 and 2 of your U.S. Form 1040 and Schedule A, if applicable.
Every state that has a sales tax has a companion tax for purchases made outside that state by catalog, telephone, or Internet. In Michigan, that companion tax is called "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 catalog, telephone, or Internet purchases made from out-of-state sellers as well as purchases while traveling in foreign countries when the items are to be brought into Michigan. Use tax must be paid on the total price (including shipping and handling charges).
How to Report Use Tax
Use Worksheet 1 below to calculate your use tax and enter the amount of use tax due on MI-1040, line 23.
Line 1: For purchases of $0 to $1,000, multiply your total purchases times 6 percent (0.06) and enter the amount on Line 1, or,
If you have incomplete or inaccurate receipts to calculate your purchases, you may use "Table 1 - Use Tax" to estimate your taxes (see the following example).
Line 1 should contain a number unless you made no purchases under $1,000 subject to the use tax. If Treasury later determines 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: Jacob ordered a computer from a catalog retailer in New York for $1,437.50. Jacob 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. Jacob's AGI is $46,500. Jacob would complete Worksheet 1 as follows:
Line1: Jacob selects $36 from
the table based on his AGI ...... $36
Line2: Jacob enters
$1,437.50 x 6 percent......... $86.25
Line3: Total use tax due .... $122.25
Jacob would enter $122 (no cents) on his 2013 MI-1040, line 23.
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 also owed on purchases made in a foreign country.
For more information, visit www.michigan.gov/taxes . Line-by-Line Instructions for Individual Income Tax Return (MI-1040)
Lines not listed are explained on the form.
Line 1: Only married filers may file joint returns. Include name and address.
Lines 2 and 3: Print your Social Security number(s).
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. Checking the box will not raise your tax or reduce your refund.
Line 6: 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, 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 generally 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 your status is married, filing separately (box c), print your spouse's full name in the space provided and be sure to print 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 your Michigan return as single.
NOTE: If you are claiming a homestead property tax credit or home heating credit and you lived with your spouse, it may be easier to file a joint Michigan return because joint total household resources are the basis for computing these credits.
Same-Sex Couples Filing a Joint Federal Return. Same- sex couples who file a joint federal income tax return must continue to file separate income tax returns for Michigan with each individual using the single filing status. Michigan has defined marriage in the Michigan Constitution as a union of one man and one woman.
Each individual who has income attributable to Michigan and who has filed a joint return with the IRS as a same-sex couple should separately report adjusted gross income (AGI) for Michigan income tax as a single filer. Each individual should recalculate their federal adjusted gross income as if they had filed a single federal return, and be aware that filing as single may affect the filer's eligibility for Michigan tax credits as well. Additional information can be found on Treasury's Web site.
Line 8: Residency. Check the box that describes your Michigan residency for 2013. 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 Nonresident and Part-Year Resident Schedule (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.
Line 9a: Enter the number of exemptions you claimed on your U.S. Form 1040 or 1040A. These exemptions are for you, your spouse (if filing jointly), and your dependents.
Multiply the number of exemptions by your exemption allowance of $3,950 and enter that amount in the box.
Michigan Special Exemptions. Complete the lines that apply to you, your spouse, or dependents as of December 31, 2013. If your dependent files a separate return, you and your dependent may not both claim the special exemption.
Line 9b: Deaf, Blind, or Certain Disabilities. 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 (e.g., 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 416. If you are age 66 or older, you may not claim an exemption as totally and permanently disabled.
You may claim only one exemption per person in this category.
Line 9c: Qualified Disabled Veterans. A taxpayer may claim an exemption of $300 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.
Line 9d: If someone else can claim you as a dependent, check the box, enter 0 on line 9a and enter $1,500 on line 9d. If your AGI is less than $1,500 and you had no Michigan income tax withheld from your wages, you do not need to file this form.
Line 10: Adjusted Gross Income. Enter your AGI from your federal return. This is the amount from your U.S. Form 1040, U.S. Form 1040A, or U.S. Form 1040EZ. You must attach copies of federal schedules that apply to you (see Table 3, page 59). For Michigan adjustments to AGI, see Schedule 1, page 37. Instructions for completing Schedule 1 begin on page 11.
Line 17: Tax. Multiply the amount on line 16 by 4.25 percent (0.0425).
Line 18: Income Tax Imposed by Government Units Outside Michigan. Include the amount of income tax paid to:
- A nonreciprocal state (see page 7)
- A local government unit outside Michigan, including tax paid to local units located in reciprocal states
- The District of Columbia
- A Canadian province.
Include only income tax paid to another government unit(s) on income earned while you were a Michigan resident and taxed by Michigan.
For assistance with calculating this credit, an estimator can be found at www.michigan.gov/incometax .
Attach a copy of the return filed with the other government unit(s) to yourMI-1040.
Do not include taxes paid on income you subtracted on lines 10 through 26 of Schedule 1 (e.g., rental or business income from another state, part-year resident wages, etc.). If you claim credit for Canadian provincial tax, you must file a Michigan Resident Credit for Tax Imposed by a Canadian Province (Form 777). Attach copies of your Canadian Federal Individual Tax Return (Form T-1), Canadian Statement of Remuneration Paid (Form T-4), U.S. Form 1116, and U.S. Form 1040. Your credit is limited to the portion of your Canadian provincial tax not used as a credit on your U.S. Form 1040.
Line 18a: Enter the total income tax paid to other government units. If you paid tax to more than one unit, attach a schedule showing the tax paid to each government unit. Also attach a copy of the return(s).
Line 18b: Credit amount. If more than one government unit is involved, compute the credit amount for each government unit separately. Then add the individual credit amounts and enter the total on line 18b. Compute your allowable credit as follows:
Step 1: Divide your non-Michigan income subject to tax by both states by your total income subject to Michigan tax (MI-1040, line 14); then
Step 2: Multiply the amount of tax shown on MI-1040, line 17, by the resulting percentage.
Your credit cannot exceed the smaller of: (1) the amount of tax imposed by another government; or (2) the amount of Michigan tax due on salaries, wages, and other personal compensation earned in another state. See the example below.
Example: Computing Michigan resident's credit for tax imposed by anotherstate.
Hunter is a Michigan resident and has $40,000 of Michigan wages, $10,000 of wages earned in another state, and $3,000 in interest and dividends. Hunter's federal AGI is $53,000. He has no Michigan adjustments (additions or subtractions) to AGI. After subtracting his $3,950 exemption from $53,000 income subject to tax, Hunter's taxable income is $49,050 (MI-1040, line 16). This results in a tax of $2,085 ($49,050 x 0.0425) that is reported on MI-1040, line 17. The other state imposed $700 tax on the $10,000 Hunter earned in that state. To compute the credit, determine the following:
Step 1: Calculate the percentage of non-Michigan income to total income subject to tax ($10,000/$53,000) = 19%
Step 2: Multiply Michigan tax of $2,085 by 19% = $396
Step 3: On MI-1040, line 18a, enter $700, the tax imposed by the other state. On MI-1040, line 18b, enter $396 (the credit is the lesser of $700 or $396).
Line 19: Michigan Historic Preservation Tax Credit. Taxpayers eligible for this credit will have received a certificate from the State Historic Preservation Office indicating their eligibility. To claim this credit you must submit all of the supporting documentation. For a list of required forms see the instructions on the back of Form 3581.
Line 19a: Enter the amount from your 2013 Form 3581, line 9.
Line19b: Enter the amount from your 2013 Form 3581, line 14.
Line 19: Small Business Investment Tax (Venture Investment) Credit. See page 3 for additional information regarding this credit.
Line 19a: Enter the contribution amount or investment amount from the required certificate.
Line 19b: Enter the income tax credit amount from the required certificate.
Line 20: IncomeTax.Carry this amount to line 21.
Line 22: Voluntary Contributions. Contributions can be made on the Voluntary Contribution Schedule (Form 4642). 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 23: Use Tax. Enter use tax due from Worksheet 1, line 3, on page 8.
Line 25: Property tax credit information begins on page 23.
Line 26: Farmland preservation credit applies to farmers only. See MI-1040CR-5 instructions for additional information.
Line 27: 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 6 percent of the taxpayer's federal credit. To claim the Michigan credit, enter your federal EITC amount on line 27a and six percent of line 27a on line 27b.
Line 28: Michigan Historic Preservation Tax Credit. Enter the amount from your 2013 Historic Preservation Tax Credit (Form 3581), line 16a or 16b, whichever applies. Attach a completed Form 3581 and U.S. Form 3581, if applicable.
Line 29: 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 8.
Line 30: Enter the total estimated tax paid with your 2013 MI-1040ES, the amount paid with a Form 4, and the amount of your 2012 credit forward (2012 MI-1040, line 34) to this year's tax. Do not include prior year's refund amount.
Line 32: You Owe. If line 31 is less than line 24, enter the difference. This is the tax you owe with your return.
You will owe penalty and interest for late payment of tax if you pay after the due date. 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 $125 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 32. Generally, if you owe more than $500, you are required to make estimated payments. See special note on the following page and information about estimated payments. 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 the Michigan Underpayment of Estimated Income Tax (Form MI-2210) to compute penalty and interest. If you do not file an MI-2210, Treasury will compute your penalty and interest and send you a bill. If you annualize your income, you must complete and attach an MI-2210. Enter the penalty and interest amounts on the lines provided.
Line 35: 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 your MI-1040.
First check with your financial institution to (1) make sure it will accept Direct Deposit, (2) obtain the correct Routing Transit Number (RTN) and account number, and (3) if applicable, verify that your financial institution will allow a joint refund to be deposited into an individual account.
Direct Deposit requests associated with a foreign bank account are classified as International ACH Transactions (IAT). If your income tax refund Direct Deposit is forwarded or transferred to a bank account in a foreign country your Direct Deposit will be returned to Treasury. If this occurs, your refund will be converted to a check (warrant) and mailed to the address on your tax return. Contact your financial institution for questions regarding the status of your account.
- 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.
- Account Number. Enter your financial institution account number up to 17 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. Do not include the check number.
- Type of Account. Check the box for checking or savings.
When You Are Finished
Sign Your Return. Each spouse must sign a joint return. If the tax 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 3 on page 59).
If you owe tax. Make your check payable to "State of Michigan." Print your Social Security number and "2013 income tax" on the front of your check. If paying on behalf of another taxpayer, write the taxpayer's name and Social Security number on the check. 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 2013 is April 17, 2018.