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Withholding Tax FAQs
- General Payroll Withholding
- Pension Withholding for Pension Administrators
- Income Record Forms (W-2s and 1099s)
- Filing Requirements and Filing Deadlines
Withholding Tax - Payroll
Every employer in Michigan who is required to withhold federal income tax under the Internal Revenue Code, must also be registered for and withhold Michigan income tax.
Withholding Tax - General Information
Who is required to remit payroll 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 Michigan’s 2021 payroll withholding tax rate?
The tax rate for 2021 is 4.25%.
What is Michigan’s 2021 personal exemption amount?
The personal exemption amount for 2021 is $4,900.
Where can I get more information about Michigan income tax?
Form 446, Income Tax Withholding Guide.
I have Michigan employees but my company is located in another state. Am I still required to withhold Michigan tax from the Michigan employees?
Yes, if the out-of-state company has created nexus (a physical presence) within Michigan the employer would be required to register with the Michigan Department of Treasury to withhold Michigan income tax.
Exception: If the employee working in Michigan is a resident of reciprocal state (i.e., Wisconsin, Indiana, Kentucky, Illinois, Ohio or Minnesota) do not withhold Michigan tax.
My company is located out-of-state with no nexus in Michigan. We have employees who are Michigan residents working in Michigan and out-of-state. Which state's withholding tax would apply?
Employers have the option to voluntarily register with the Michigan Department of Treasury to withhold Michigan income tax or the employee must make estimated income tax payments directly to Michigan.
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.
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.
When should a household employer be registered for withholding tax?
If the federal government requires a household payer to withhold federal taxes, then Michigan would require Michigan withholding. If the federal government does not require withholding, Michigan withholding would not require Michigan withholding. However, the household payer can always withhold voluntarily when not required.
|Filing Frequency||Due Date for Return and Payment|
|Monthly||On or before the 20th day of the following month|
|Quarterly||On or before the 20th day of the month following the quarter end.|
|Annual||Due February 28th of the year following the tax year reported.|
|Withholding Accelerated Electronic Funds Transfer (EFT)||
Taxpayers who have an annual Withholding liability of ≥ $480,000 in the preceding calendar year.
According to PA 82 and 83 of 1991, an Accelerated Withholding Tax filer is required to remit withholding taxes the same day as federal payments regardless of the amount due.
|2014 & Prior
|2015 & Beyond
|Form Title||Additional Information|
|160||5080||Sales, Use and Withholding Taxes Monthly/Quarterly Return|
|5092||Sales, Use and Withholding Taxes Amended Monthly/Quarterly Return|
|165||5081||Sales, Use and Withholding Taxes Annual Return|
|N/A||5082||Sales, Use and Withholding Amended Annual Return|
|429||5083||Fuel Supplier and Wholesaler Prepaid Sales Tax Schedule||This is now a schedule to be e-filed in connection with your 5080 or 5092 through MTO.
Note: Prepaid Sales Tax on gasoline or diesel fuel are no longer allowable deductions from gross sales. When completed, this schedule reduces sales tax due by the prepaid amount.
|430||5084||Fuel Advance Credit Repayment|
|2189||5085||Fuel Retailer Supplemental Schedule||
This is now a schedule to be e-filed in connection with your 5080 or 5092 through MTO.
|92||5086||Vehicle Dealer Supplemental Schedule||This is now a schedule to be e-filed in connection with your 5080 or 5092 through MTO.
Note: Prepaid Sales Tax to the Secretary of State is no longer an allowable deductions from gross sales. When completed, this schedule reduces sales tax due by the prepaid amount.
|48||5087||Purchasers Use Tax Return||Keep a copy for your records.|
|388||5088||Seller’s Use Tax Return||Keep a copy for your records.|
|2271||5089||Concessionaire’s Sales Tax Return and Payment|
|4601||5091||Sales, Use and Withholding Taxes 4% and 6% Annual Return||This form must be submitted electronically through MTO.|
|N/A||5093||Sales, Use and Withholding Taxes Amended 4% and 6% Annual Return||This form must be submitted electronically through MTO.|
|N/A||5094||Sales, Use and Withholding Taxes Payment Voucher||This form is used to remit a payment separate from a return. This form does not replace a return.|
|3862||5095||Sales, Use and Withholding Monthly/Quarterly and Amended Monthly/Quarterly Worksheet||This form is not sent to the Department of Treasury; it is designed as a tool to assist in preparing returns.|
|151||151||Authorized Representative Declaration (Power of Attorney)||This form can be electronically submitted through MTO.|
|163||163||Notice of Change or Discontinuance||This form can be electronically submitted through MTO.|
Do I have to file a return? What if I do not owe any tax?
If you are registered to pay a tax, you must file a return within your established filing frequency, even if no tax is due.
What is the definition of a tax year?
A tax year for Sales, Use and Withholding tax is defined as a calendar year: January 1st – December 31st.
How often do I need to file a tax return for Sales, Use and Withholding taxes?
Initially, Treasury determines your filing frequency based on your estimated monthly payment for each tax that you registered on your registration application.
Because Sales, Use and Withholding Taxes are reported together they will have the same filing frequency.
Subsequently, your filing frequency is reviewed by Treasury annually for update. If your filing frequency is changed you will be notified in writing. Because Sales, Use and Withholding Taxes are reported together they will have the same filing frequency.
For more information, See Table 1: Filing Frequencies & Due Dates.
For more information, See Table 2: Tax Return Form Number by Tax Year.
I did not file my monthly/quarterly returns. Can I just file the annual return?
No, the purpose of the annual return is to reconcile, balance, and close the tax year – it does not replace monthly/quarterly returns.
When filing my monthly/quarterly return, it is asking me for “gross sales”. Is this correct? Does this mean only taxable sales or all sales?
Gross sales are required to be reported on monthly/quarterly returns for tax years 2015 and beyond. Gross sales is defined as all sales. To obtain your taxable sales figure, subtract any allowable deductions from gross sales. Allowable deductions and calculation of tax due from taxable sales are not delineated on the monthly/quarterly return.
Refer to Form 5095, Sales, Use and Withholding Monthly/Quarterly and Amended Monthly/Quarterly Worksheet, for assistance in completing the monthly/quarterly return.
I need to amend my Sales, Use and Withholding tax return. What is the process?
For 2015 and forward tax years, complete Form 5092, Sales, Use and Withholding Taxes Monthly/Quarterly Amended Return with the correct figures. This form can be electronically submitted through MTO or mailed.
For 2015 and forward tax years, complete Form 5082, Sales, Use and Withholding Taxes Amended Annual Return, with the correct figures. This form can be electronically submitted through MTO or mailed.
I requested a credit forward on my Annual Return for Sales, Use and Withholding. When am I able to use this credit?
Treasury will notify taxpayers in writing when their annual returns are processed and a determination has been made regarding requested credit forwards. Taxpayers should not use credits until they have received this written correspondence from Treasury.