Estimated Payments
1. Do I need to make estimated payments?

The City Tax Act requires that a person must make quarterly estimated payments if the person's income tax liability, after credits, will be $100 or more for the year.

2. When are estimated tax payments due?

Quarterly tax payments are due April 15, 2016, June 15, 2016, September 15, 2016 and January 15, 2017.

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?

The City Income Tax Administration follows the City Tax Act guidelines for estimated tax requirements. Based on the 2015 estimated income tax requirements, to avoid penalties for failure to make estimated tax payments in 2016, your total tax paid through credits and withholding must be:

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