- 1. Do I need to make estimated payments?
- 2. When are estimated tax payments due?
- 3. What happens if I fail to file and make the required estimated tax payments?
Failure to file and make the required estimated tax payments may result in an assessment issued by the City Income Tax Administration for penalty and interest.
Penalty is 10 percent of underpaid tax per quarter or 25 percent for failing to file estimated payments. Interest is 1 percent above the prime rate.
- 4. Why am I being charged penalty and interest?
70 percent of your total 2016 tax or 70 percent of your total 2015 tax.
Penalty is 25 percent of the tax due for failing to file estimated payments or 10 percent for failing to pay enough with your estimates, or paying late.
Interest is 1 percent above the adjusted prime rate and is adjusted on January 1 and July 1 each year. The interest rate through June 30, 2016 is 4.25 percent annually (.0001161 daily rate).
- 5. How do I submit my estimated tax payments?
Complete a City Estimated Individual Income Tax Voucher (Form 5123). Mail this voucher with payment to:
Michigan Department of Treasury
City Tax Administration
P.O. Box 30738
Lansing, MI 48909