Withholding Tax FAQs

Withholding Tax FAQ Index

Withholding Tax - General Information

Who is required to register for withholding tax?

Every Michigan employer who is required to withhold federal income tax under the Internal Revenue Code must be registered for and withhold Michigan income tax.

What is the 2016 Michigan withholding tax rate and personal exemption allowance?

For calendar year 2016, the Withholding Rate is 4.25% and the Personal Exemption is $4,000. See the 2016 Michigan Income Tax Tables.

I have Michigan employees but my company is located in another state. Am I still required to withhold Michigan tax from employees?

Yes. Nexus (a physical presence for the company) would be created for the out-of-state company. Employers would be required to register with the Michigan Department of Treasury to withhold Michigan income tax.

My company is located out of state and has no nexus in Michigan. We have employees who are Michigan residents working in an out-of-state location. Which state's withholding tax would apply?

Michigan has a reciprocal agreement with Wisconsin, Indiana, Kentucky Illinois, Ohio and Minnesota. Employers in these states should not withhold their state's income tax from Michigan residents who work in their states. A voluntary registration with the Michigan Department of Treasury to withhold Michigan income tax may be obtained or the employee must make estimated income tax payments directly to Michigan. Employers in all other states should withhold their state's withholding tax.

Are nonprofit organizations required to withhold tax from their employees?

Yes. Nonprofit organizations, such as charitable, religious and governmental organizations, are required to withhold Michigan Income Tax.

Where do businesses send copies of their 1099 forms?

Michigan participates in the combined federal/state 1099 filing program. The IRS will share this information with Michigan. If there is no Michigan withholding and the 1099s were filed using this program, this would satisfy the statutory requirement for reporting non-employee compensation.
If there was Michigan income tax withheld on the 1099 or 1099-MISC, you are required to submit copies with the Annual Return for Sales, Use and Withholding Taxes for the applicable tax year.

What cities impose an income tax?

Albion, Battle Creek, Big Rapids, Detroit, Flint, Grand Rapids, Grayling, Hamtramck, Highland Park, Hudson, Ionia, Jackson, Lansing, Lapeer, Muskegon, Muskegon Heights, Pontiac, Port Huron, Portland, Saginaw, Springfield and Walker. Find links to the city forms.

Where can I find the addresses and filing formats for cities that impose an income tax?

See City Tax Forms

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1099-MISC Filing Requirements

Do I send1099's and 1099-MISC with another form?

If there was Michigan income tax withheld on the 1099 or 1099-MISC, you are required to submit copies with the Annual Return for Sales, Use and Withholding Taxes for the applicable tax year.

What is the address to submit/file 1099-MISC to the State of Michigan?

Send the 1099-MISC forms to the Michigan Department of Treasury, Lansing, MI 48930. Include your:
– company name
– address
– Social Security number or Federal Employer's Identification Number (FEIN)

What is the due date for filing 1099-MISC forms with Treasury?

Submissions must be postmarked by February 28. If the due date falls on a weekend or State holiday, the due date is the next business day.

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Magnetic Media

Can I file 1099-MISC by Magnetic Media?

Yes.

Where do I mail my magnetic media information for W-2 and 1099-MISC?

Send the magnetic media along with a copy of Form 447, Transmittal for Magnetic Media Reporting of W-2s, W-2Gs, and 1099s to:
Return Processing Division
Magnetic Media Unit – SUW
Michigan Department of Treasury
Lansing, MI 48930

Courier Deliveries:
Michigan Department of Treasury
Magnetic Media Unit – SUW
7285 Parsons Dr.
Dimondale, MI 48821
Mail the Annual Return for Sales, Use and Withholding Taxes separately to the address on the back of the annual return.

Are electronic copies of W-2's and 1099's permitted?

No. Michigan cannot accept electronic copies of W-2's or 1099's at this time.

We are eliminating our tape drives; what magnetic media format can I use?

You may use CD-ROM, or 3480 or 3490 tape cartridges.

Who do I call if I have additional questions about magnetic media filing?

Contact the Magnetic Media Unit at 517-636-6925.

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