2019 TAX TEXT

2018

Tax

Text

Michigan Department of Treasury

2018 TAX TEXT

TABLE OF CONTENTS

ADMINISTRATIVE INFORMATION

Page

Overview ............................................................................................................................. 1 Administrative Information ................................................................................................. 1

Web Services ............................................................................................................ 1 Individual Income Tax (IIT) Web-Services.............................................................. 2 IIT Terms .................................................................................................................. 2 Why Web Services Might Indicate Treasury Has Not Received an Income Tax

Return .................................................................................................................... 3 Business Taxes Web Services................................................................................... 3 E-Registration for Michigan Taxes .......................................................................... 4 Michigan Treasury Online Services ......................................................................... 4 Online Filing and Payment Options in 2018 ............................................................ 5 Disclosure Guidelines .......................................................................................................... 5 Identity Theft ....................................................................................................................... 6 Taxpayer Rights and Responsibilities ................................................................................. 7 The Billing Process................................................................................................... 7 Payment of the Additional Tax ................................................................................. 8 Jeopardy Assessments for Extreme Cases ................................................................ 8 Refunds ..................................................................................................................... 9 Refund Denied or Different Than Expected ............................................................. 9 The Appeals Process................................................................................................. 9 Informal Conference ................................................................................................. 9 Michigan Tax Tribunal (MTT) ................................................................................. 10 Court of Claims......................................................................................................... 10 Offer-In Compromise Program............................................................................................ 13 Alternative Dispute ................................................................................................... 13 Office of Taxpayer Advocate .............................................................................................. 14 Forms .................................................................................................................................. 15 Availability of Tax Forms......................................................................................... 15 Penalty and Interest ............................................................................................................. 15 Interest ...................................................................................................................... 16 Waiver of Penalty ..................................................................................................... 17 Intercepting Refunds............................................................................................................ 17 Web Site .............................................................................................................................. 17 Contact Numbers ................................................................................................................. 17 Contact Information Online ...................................................................................... 18 Protect Taxpayer's Privacy....................................................................................... 18 Helpful Information ............................................................................................................. 18 Calling ...................................................................................................................... 18 Writing ...................................................................................................................... 18 Making a Payment .................................................................................................... 19 Treasury Letters ........................................................................................................ 19 E-mail LISTSERV for Tax Professionals................................................................. 19

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Page Summary of Unclaimed Property Law ................................................................................ 20

Who Must Report ..................................................................................................... 20 What Must Be Reported ........................................................................................... 20 Reporting Due Date and Penalty for Noncompliance .............................................. 20 How to Report .......................................................................................................... 20 Noncompliance With Unclaimed Property Reporting Requirements ....................... 21 Voluntary Disclosure Program ................................................................................. 21 How Owners Locate Unclaimed Property Reported to the State of Michigan ......... 21

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ELECTRONIC FILING PROGRAMS

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Individual Income Tax (IIT) ................................................................................................ 22 How Fed/State (Linked) Electronic Filing Works .................................................... 23 How State Unlinked Electronic Filing Works ......................................................... 24 Who May Participate ................................................................................................ 24 Application and Acceptance Process ........................................................................ 24 Electronic Michigan Returns .................................................................................... 25 Nonelectronic Portion of Michigan Returns ............................................................. 29 Michigan E-file Signature Process ........................................................................... 30 For Tax Preparers ..................................................................................................... 30 Volunteer Groups ..................................................................................................... 30

Fiduciary Income Tax.......................................................................................................... 31 How Fed/State (Linked) Electronic Filing Works .................................................... 31 How State Unlinked Electronic Filing Works .......................................................... 31 Who May Participate ................................................................................................ 32 Application and Acceptance Process ........................................................................ 32 Electronic Michigan Return...................................................................................... 33 For Fed/State Returns ............................................................................................... 34 For State Unlinked Returns ...................................................................................... 34 For Tax Preparers ..................................................................................................... 34

Corporate (CIT) and Michigan Business Tax (MBT) ......................................................... 34 General Information.................................................................................................. 34 CIT Forms and Schedules......................................................................................... 36 MBT Forms and Schedules....................................................................................... 37 Attachments to CIT and MBT Returns ..................................................................... 37 CIT and MBT Fed/State E-file Programs ................................................................. 38 How Fed/State (Linked) E-file Works...................................................................... 38 How State Standalone (Unlinked) E-file Works....................................................... 38 Application Process .................................................................................................. 39 Acceptance Process .................................................................................................. 39 Signature Process For Fed/State (Linked) Returns................................................... 40 Signature Process For State Standalone (Unlinked) Returns.................................... 40 For More Information ............................................................................................... 40 City of Detroit Corporate Income Tax...................................................................... 40

Sales, Use and Withholding................................................................................................. 40 How SUW Electronic Filing Works ......................................................................... 41 Applications and Acceptance Process ...................................................................... 42 Type of Filings Accepted.......................................................................................... 42 Exclusions from E-file .............................................................................................. 43 E-file Signature Process............................................................................................ 43 Payments Method ..................................................................................................... 43 Refunds ..................................................................................................................... 44 City of Detroit Income Tax Withholding ................................................................. 44

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INDIVIDUAL INCOME TAX

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What's New ......................................................................................................................... 45 Revenue Administrative Bulletins (RAB) and Directives ........................................ 45 Tax Cuts and Jobs Act of 2017................................................................................. 45 Net Operating Loss ................................................................................................... 45 Homestead Property Tax Credit ............................................................................... 45

Forms .................................................................................................................................. 46 Individual Income Tax Forms................................................................................... 46 Mailing Addresses .................................................................................................... 46 Substitute Forms Must Be Approved........................................................................ 47

Tax Refund and Payment Information................................................................................. 47 State Tax Returns Claiming Refunds........................................................................ 47 State Tax Returns With Tax Due .............................................................................. 47 City Tax Returns Claiming Refunds......................................................................... 48 City Tax Returns With Tax Due ............................................................................... 48

Post-Filing Information ....................................................................................................... 49 Mailing Addresses .................................................................................................... 49 Amended Michigan Income Tax Return (Schedule AMD) ...................................... 50

Summary of Changes for 2018 ............................................................................................ 51 Summary of Changes for Prior Years.................................................................................. 52 Filing Requirements............................................................................................................. 52

Filing an MI-1040 Return ......................................................................................... 52 Factors to Determine Domicile ................................................................................. 53 Nonresident Aliens ................................................................................................... 53 Taxability of Income Derived Within Indian Country ............................................. 53 Estimated Income Tax .............................................................................................. 54 e-Payments................................................................................................................ 56 Seafarers, Farmers, and Commercial Fishermen ...................................................... 56 Exemptions .......................................................................................................................... 56 Definitions of Michigan Special Exemptions ........................................................... 57 Qualified Disabled Veteran Exemption .................................................................... 57 Part-Year and Nonresident ....................................................................................... 57 Claimed as a Dependent ........................................................................................... 57 Michigan Income Tax Treatment of Child's Unearned Income .......................................... 58 Additions/Deductions .......................................................................................................... 58 Eliminating Income and Expenses of Producing Oil and Gas .................................. 58 Renaissance Zones.................................................................................................... 58 Retirement and Pension Benefits .............................................................................. 59 Employer Plans ......................................................................................................... 59 Individual Plans ........................................................................................................ 60 Pension Limitations Based on Date of Birth............................................................. 61 Income Tax For Retirement Benefits Effective For Tax Year 2018......................... 63 Unlimited Public Pension Subtraction ..................................................................... 64 Private Pensions........................................................................................................ 65 Railroad Pension Benefits......................................................................................... 65

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