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New Developments for Tax Year 2013

Annual mailing of instruction booklets – The MI-1040, MI-1040CR-2, MI-1040CR-5 and MI-1040CR-7 instruction booklets have been mailed to taxpayers who filed their 2012 return on Treasury forms. However, taxpayers who e-filed or had a tax preparer complete their forms will not be mailed a booklet.

All forms and instructions may be viewed and/or downloaded from our Web site beginning in January 2014. In addition, commonly used forms will continue to be available at Treasury offices, most public libraries, Northern Michigan post offices, and Department of Human Services (DHS) county offices.

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

Reminder: All pages of all forms must be completed and filed to be processed.

Tax form changes for 2013:

No new forms have been added, however changes have been made to several forms.

MI-1040 Michigan Individual Income Tax Changes:

  • Line 6 - Retirees no longer need to check this box
  • Line 9a - Exemption allowance changed to $3,950
  • Line 9b - Special exemption allowance changed to $2,500
  • Line 17 - Income tax rate changed to 4.25%

Schedule 1 Additions and Subtractions Changes:

Additions - Two new lines have been added

  • Line 6 - Oil and Gas expenses deducted to arrive at Adjusted Gross Income (AGI)
  • Line 7 - Federal Net Operating Loss deduction

Subtractions

  • Line 11 - Now includes taxable railroad retirement benefits. No longer includes military pay.
  • Line 14 - Now includes military pay. No longer includes taxable railroad retirement benefits.
  • Line 19 (New) - Oil and Gas Gross Income included in Adjusted Gross Income (AGI)
  • Line 20 (New) - Tribal Member Income exempt under a State/Tribal tax agreement
  • Line 23 (New) - Complete this section if you are claiming a subtraction on lines 24, 25 and/or 26 (see MI-1040 instruction booklet, page 13)
  • Line 24 (New) - Michigan Standard Deduction. This should only be completed if the older of you or your spouse was born in 1946. If you qualify for the Michigan Standard Deduction, you do not fill out form 4884 and do not qualify for a dividend/interest/capital gains deduction
  • Line 26 - Dividend/interest/capital gains deduction is available for seniors who are 68 years and older. This subtraction is limited to $10,767 for single or married filing separately filers or $21,534 for joint filers. The maximum deduction must be reduced by the pension subtraction claimed on line 25.

Amended Returns:

  • Must use form MI-1040X-12 for 2012 and future year amended returns
  • Must use form MI-1040X for 2011 and prior year amended returns

Voluntary Contributions Schedule (form 4642) additions:

  • ALS of Michigan (“Lou Gehrig’s Disease”) Fund
  • Alzheimer’s Association of Michigan
  • AMBER Alert Fund of Michigan
  • Special Olympics Michigan

New Information:

Important Information

  • Free E-file is Available. Do You Qualify? — E-file lets you submit your Michigan and federal individual income tax returns using a computer instead of mailing paper returns. You can e-file your Michigan return separately from your federal return (State Standalone e-file). If you choose to e-file only your Michigan tax return, be sure to calculate your federal return first before completing and e-filing your Michigan return. www.MIfastfile.org
  • IRS has announced that they will begin accepting and processing 2013 income tax returns on January 31, 2014.
  • 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:
  • Pension and Interest Deduction – Beginning in 2013, pensions and retirement benefits will be taxed differently depending on the birth year of the recipient. Any taxpayer taking a subtraction for pension MUST complete the Michigan Pension Schedule (Form 4884). Senior citizens age 68 or older may be able to deduct part or all 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 or $21,534 for joint filers.
  • Pension Interest/Dividends/Capital Gain Estimator – Certain amounts of pension interest/dividends/capital gains and pension distributions are subtractable from taxable income. An estimator is available on Treasury's Web site to assist taxpayers in determining what amounts can be subtracted and to make income tax return preparation easier.
  • Total Household Resources will still be in effect for Tax Year 2013 which excludes net losses from business (including farm), rental and royalties and also excludes net operating losses. View more information
  • Homestead Property Tax Credit (MI-1040CR) – All three pages must be completed and filed or the credit cannot be processed. Homesteads with a taxable value over $135,000 are not eligible for this credit.
  • Homestead Property Tax Credit Claim for Veterans and Blind People (MI-1040CR-2) All three pages must be completed and filed or the credit cannot be processed.
  • Property Tax Credits / Refunds – Michigan homestead property tax credit and State or local refunds received in 2013 may be taxable on your 2013 U.S. 1040. If you claimed an itemized deduction for property or Michigan income taxes on your 2012 U.S. 1040 and 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. 1040. If you have questions about the taxability (for federal tax purposes) of the refunds, call the IRS at 1-800-829-1040.
  • Filing Extension Granted for Military Personnel Serving in a Combat Zone – United States military personnel serving in a combat zone on April 15, 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. 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.
  • Renaissance Zones – Certain Renaissance Zones, along with the tax benefits, will continue to be phased out. See instructions for Schedule 1, line 15, on page 12 of the MI-1040 instruction booklet.
  • Statute of Limitations for Prior Year Returns and Credits A taxpayer may file and claim a refund to the Department within four years from the date set for the filing of the original return. For example: You must file a 2009 Michigan Individual Income Tax Return (MI-1040/MI-1040X) and/or a Homestead Property Tax Credit (MI-1040CR/ MI-1040CR-2) on or before April 15, 2014.
  • Home Heating Credit Standard Allowances and Income Ceilings for 2013 (See Tables A and B below) Note: The last day to file a 2013 Home Heating Credit is September 30, 2014. No filing extensions are allowed.

TABLE A
Standard Allowance for the Standard Credit Computation
Your Exemptions
(from line 13h)
Standard
Allowance
Income
Ceiling
0 or 1 $443 $12,642
2 $598 $17,071
3 $753 $21,500
4 $908 $25,929
5 $1,062 $30,328
6 $1,217 $34,757
  +155 for each
exemption over 6
+4,429 for each
exemption over 6

TABLE B
Exemptions and Maximum Income for the Alternate Credit Computation
Your Exemptions
(from line 13h)
Maximum
Income
0 or 1 $13,576
2 $18,269
3 $22,967
4 or more $24,018