Why am I being charged MI-2210 penalty and interest?

‚ÄčMI-2210 penalty and interest is charged for the following reasons:

  • No estimated tax payments were received
  • Estimated tax payments were underpaid in one or more quarters
  • Estimated tax payments were received late
           Note: Payments received after the due date will be applied to the following
                    quarter
     

The Michigan Department of Treasury follows the Internal Revenue Service (IRS) guidelines for estimated tax requirements. Based on the IRS estimated income tax requirements, to avoid penalties for failure to make the required estimated tax payments, your total tax paid through credits and withholding must be:

  • 90% of your current year's tax liability or
  • 100% of your previous year's tax liability or
  • 110% of your previous year’s tax liability if your previous year’s adjusted gross income
    is more than $150,000 ($75,000 for married filing separate).

Generally, if you owe more than $500, you are required to make estimated payments. Taxpayers required to make estimated payments may owe penalty and interest for underpayment, late payment, or for failing to make estimated tax payments. Use the Michigan Underpayment of Estimated Income Tax (Form MI-2210) to compute penalty and interest. If you do not file an MI-2210, Treasury will compute your penalty and interest and send you a bill. If you annualize your income, you must complete and include an MI-2210. Enter the penalty and interest amounts on the lines provided.