Treasury is reviewing the recently enacted tax law changes, including the new Marijuana Wholesale Tax. Developing clear and accurate information for tax stakeholders is our top priority. This guidance will be posted to our website in the coming weeks.
Are estimated tax payments necessary for estates or trusts?
In general, a fiduciary for an estate or trust must file quarterly estimated payments if the estate or trust is expected to owe more than $500 for the current year return after crediting amounts paid through withholding and all other credits. If the estate or trust owes more than $500, estimated payments may not have to be made if the estate or trust expects the withholding to be at least:
- 90 percent of your current year's tax liability
- 100 percent of the previous year’s tax liability, or
- 110 percent of the previous year's tax liability if the estate’s or trust’s previous year’s taxable income is more than $150,000.
If estimated payments are required, use the Estimated Income Tax Voucher for Fiduciary and Composite Filers (Form MI-1041ES). Filing instructions are with the form. Do not use MI-1040ES to make estimated payments for an estate or trust. If an estate owes more than $500, estimated payments are not required if the decedent died within the last two years. If a fiduciary fails to make required estimated payments, pays late, or underpays, Treasury may charge penalty and interest. Penalty is 25 percent of the tax due (with a minimum of $25) for failing to file estimated payments, or 10 percent (with a minimum of $10) for underpaying estimated payments. Interest is 1 percent above the prime rate and is computed monthly. The rate is adjusted on July 1 and January 1.