New Developments for Tax Year 2017

 

Annual mailing of instruction booklets

The MI-1040, MI-1040CR-2, MI-1040CR-5 and MI-1040CR-7 instruction booklets will be mailed to taxpayers who paper filed their 2016 return on Michigan Department of Treasury forms. Taxpayers who e-filed or had a tax preparer complete their forms will not be mailed a booklet.

Forms and instructions may be viewed and/or downloaded from our Web site beginning in January 2018. In addition, commonly used forms will continue to be available at Michigan Department of Treasury offices, most public libraries, Northern Michigan post offices, and Michigan Department of Health and Human Services (MDHHS) county offices.

Note: Bulk forms are distributed to libraries and post offices throughout the state before they are available in Michigan Department of Treasury offices. Therefore forms may not be requested through the Michigan Department of Treasury Customer Contact Center until
mid-February.

Reminder: All pages of all forms must be completed and filed to be considered a complete return.

Collections accepts credit and debit card payments for past due debts

The Office of Collections accepts credit/debit card payments for online payments only. There is a processing fee of 2.48% for all transactions. You can use a valid Discover, MasterCard or Visa credit card or a valid MasterCard or VISA debit card to make payment. View more information.

IRS Refund Delays in 2018

The IRS will again hold refunds until mid-February 2018 for taxpayers claiming the Earned Income Tax Credit or the Additional Child Tax Credit.

In addition, identity theft and refund fraud safeguards put in place by the IRS may result in delayed processing of tax returns. This delay will not impact Michigan Department of Treasury’s processing of individual income tax returns.

Tax form information and changes for 2017
 

  • Exemption allowances and the tax rate remain the same as tax year 2016:
     
    • $4,000 for exemptions claimed on the federal return
    • $2,600 for special exemptions
    • $400 for qualified disabled veterans
    • 4.25% tax rate

 

  • Michigan Individual Income Tax Return (MI-1040):
     
    • Amended return check box added to page 1
    • Line 31 added for amended returns including check boxes

      Note:  MI-1040X-12 should only be used for tax years 2012 through 2016

 

  •  Michigan Amended Return Explanation of Change, Schedule AMD
     
    • This is a new form that willl replace the MI-1040X-12 starting with tax year 2017
    • This form must be completed and included when amending a 2017 MI-1040

      Note:  MI-1040X-12 should only be used for tax years 2012 through 2016
      ‚Äč
  • Schedule 1 Additions and Subtractions:
    • Line 24 - Michigan Standard Deduction. Taxpayers who were born during the period January 1, 1946 through January 1, 1951, that reached age 67 on or before December 31, 2017 may be eligible for a subtraction of $20,000 for single filers or $40,000 for joint filers against all income, rather than solely against pension and retirement income.
      Note: Filers who qualify for the Michigan Standard Deduction should not file Form 4884.
    • Line 26 - Dividend/interest/capital gains deduction for taxpayers 71 years and older. This deduction is limited to $11,259 for single or married filing separately filers or $22,518 for joint filers, less any deduction for retirement benefits. (See page 15 in the MI-1040 Instruction Booklet)                         

      Dividends/Interest/Capital Gain Deduction Estimator 
       
  • Homestead Property Tax Credit Claim (MI-1040CR):
     
    • Amended return check box added to page 1
    • If you are a resident of a special housing facility (Nursing Home, Home for the Aged and Adult Foster Care), base your claim on rent only. Do not include other services. If you pay rent with other services and you are unable to determine the portion that constitutes rent only, you may determine your portion of the property taxes that can be claimed for credit based on square footage, or, divide the taxes by the number of residents for whom the home is licensed to care.  This information may be obtained from your housing facility.
       
  • Michigan Voluntary Contributions Schedule (Form 4642)
     
    • Charitable Funds available for tax year 2017
      • American Red Cross Michigan Fund
      • Animal Welfare Fund
      • Children’s Trust Fund – Supporting and Strengthening Families in Michigan
      • Michigan Junior Achievement Fund
      • Military Family Relief Fund
      • United Way Fund
         
  • Pension Schedule (Form 4884):
     
    • Taxpayers born before 1946 may subtract private pensions up to $50,509 for single or married filing separately filers and $101,019 for joint filers.
    • Taxpayers born during the period January 1, 1946 through January 1, 1951 should not file form 4884. A single filer may subtract $20,000 against all income and joint filers may subtract $40,000 against all income as the Michigan Standard Deduction on Schedule 1, line 24.
    • Taxpayers born during the period January 2, 1951 through December 31, 1952 may subtract retirement and pension benefits of $20,000 for single filers and $40,000 for married filing jointly
    • Taxpayers born after 1952, may not deduct pension benefits unless the older of you or your spouse (if married filing jointly) meets all of the following conditions:
      • Was born during the period January 1, 1953 through January 2, 1956
      • Has reached age 62
      • Receives Social Security exempt retirement benefits due to employment with a governmental agency.

 

  For more information, see page 17 in the MI-1040 Instruction Booklet

  Pension Deduction Estimator

  • Home Heating Credit (MI-1040CR-7):
     
    • Amended return check box added to page 1

            Standard Allowances and Income Ceilings for 2017 (See Tables A and B below). 
            Note: The last day to file a 2017 Home Heating Credit is September 30, 2018. No filing extensions are allowed.
 

TABLE A: 2017 Home Heating Credit (MI-1040CR-7) Standard Allowance

    NOTE: If you lived in your homestead for less than 12 months, you must prorate your standard allowance
    (see instructions in the MI-1040CR-7 booklet).

 

EXEMPTIONS

STANDARD ALLOWANCE

INCOME CEILING

0-1

$465

$13,271

2

$626

$17,871

3

$787

$22,471

4

$948

$27,071

5

$1,109

$31,671

6

$1,270

$36,271

 

+ $161 for each
exemption over 6

+ $4,600 for each
exemption over 6


TABLE B: 2017 Home Heating Credit (MI-1040CR-7) Alternate Credit Computation

EXEMPTIONS

MAXIMUM INCOME

0-1

$14,111

2

$18,989

3

$23,872

4

$24,882

 

Additional Information

 

Direct Debit

        Taxpayers may elect to use direct debit when e-filing their 2016 or 2017 tax due returns.  A direct debit is a tax payment that 
        Michigan Department of Treasury electronically withdraws from the taxpayer’s bank account using the bank information provided on
        the electronically filed return. Submitting the electronic return with the direct debit information provided authorizes the
        Michigan Department of Treasury to withdraw the funds from their bank account.
Direct debit is available for both the Michigan
        and City of Detroit returns.
        
        Note:  In the event the payment is returned as unpaid, the Michigan Department of Treasury may charge a return item fee, up to the 
        maximum amount allowed by law. Penalty and interest will accrue on any tax due that has not been paid by the original due date of
        the return.

e-Payments

Individual Income Tax (IIT) filers have the option of making payments electronically using the Michigan Department of Treasury’s e-Payments system. Payments can be made by using, electronic payment (eCheck), credit card or debit card.


Free E-file
 

E-file lets you submit your Michigan, City of Detroit and federal individual income tax returns using a computer instead of mailing paper returns. You can e-file your Michigan and/or City of Detroit return separately from your federal return (State Standalone e-file). If you choose to e-file your Michigan tax return, visit Treasury’s Web site at MIfastfile.org for a list of e-file resources, how to find an e-file provider, and more information on free e-file services.

There are many free tax preparation services available. To find out if you qualify and/or to locate a free preparation site near you, visit the following sites:

o  Free tax preparation assistance offered by IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the elderly programs. Enter your zip code to locate a site near you. http://irs.treasury.gov/freetaxprep/

o  You may be eligible to prepare and e-file your federal return for free with Free File through the IRS Web site.
 

Treasury Offset Program (TOP)
 

Michigan Department of Treasury has entered into an agreement with the Internal Revenue Service to intercept, or offset, federal tax refunds and federal payments for delinquent Michigan Department of Treasury income tax debts.

View more TOP information
 

Pension Estimator and Dividend/ Interest/Capital Gain Estimator
 

Certain amounts of pension distributions and dividend/interest/capital gains can be subtracted from Michigan taxable income. An estimator is available on Treasury's Web site to assist taxpayers in determining what amounts can be subtracted and to assist in making income tax return preparation easier.

 

Property Tax Credits / Refunds
 

Michigan homestead property tax credit and State refunds from Michigan Department of Treasury received in 2017 may be taxable on your 2017 U.S. 1040. If you have questions about the taxability (for federal tax purposes) of your refunds, call the IRS at 800-829-1040.


Filing Extension Granted for Military Personnel Serving in a Combat Zone
 

United States military personnel serving in a combat zone on April 15, 2018, 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. View More Information for Members of the Military


MI-1040ES Forms No Longer Mailed to Taxpayers Using Preparers
 

Treasury does not mail preprinted Estimated Individual Income Tax Vouchers to taxpayers who use tax preparers to complete and file their income tax returns.


Statute of Limitations for Prior Year Returns and Credits
 

A taxpayer must file to claim a refund with the Michigan Department of Treasury within four years from the date set for the filing of the original return. For example: You must file a 2013 Michigan Individual Income Tax Return (MI-1040/MI-1040X-12) and/or a Homestead Property Tax Credit (MI-1040CR/MI-1040CR-2) on or before April 15, 2018.