You Could Lose Your Michigan Income Tax Refund
One thing perennial procrastinators know about taxes, is that you can file late without any penalty, as long as you have money coming back. Wait a minute. Not so with the State of Michigan.
Even though the State gave us an extra month to file this year, many still didn’t get it done. The state is offering help for those that owe, but also a caution for those who are pretty sure they have money coming back: “Taxpayers risk losing their state income tax refund if they don’t file a return within four years from the due date of the original return.”
Michigan taxpayers who missed the May 17 state individual income tax filing deadline have options for filing a late return, according to the Michigan Department of Treasury.
“Taxpayers who missed last week’s individual income tax filing deadline have options,” State Treasurer Rachael Eubanks said. “If you have an outstanding tax debt and cannot make full payment, we will work with you on payment options. Our goal is to help taxpayers limit interest charges and late payment penalties.”
Treasury recommends past-due tax filers to consider:
- Filing a return to claim an outstanding refund. Taxpayers risk losing their state income tax refund if they don’t file a return within four years from the due date of the original return. Go to michigan.gov/mifastfile to learn more about e-filing.
- Filing a return to avoid interest and penalties. File past due returns and pay now to limit interest charges and late payment penalties. Failure to pay could affect a taxpayer’s credit score and the ability to obtain loans.
- Paying as much tax as possible. If taxpayers owe outstanding taxes and can’t pay in full, they should pay as much as they can when they file their tax returns. Payments can be made using Michigan’s e-Payments service. When mailing checks, carefully follow tax form instructions. Treasury will work with taxpayers who cannot pay the full amount of tax they owe.
Taxpayers who receive a final tax bill and are unable to pay the entire amount owed can consider:
- Requesting a penalty waiver. Penalty may be waived on an assessment if a taxpayer can show reasonable cause for their failure to pay on time. Reasonable cause includes serious illness, a fire or natural disaster, or criminal acts against you. Documentation should be submitted to substantiate the reason for a penalty waiver request.
- Making monthly payments through an installment agreement. For Installment Agreements lasting for 48 months or less, taxpayers must complete, sign and return the Installment Agreement (Form 990). The agreement requires a proposed payment amount that will be reviewed for approval by Treasury.
- Filing an Offer in Compromise application. An Offer in Compromise is a request by a taxpayer for the Michigan Department of Treasury to compromise an assessed tax liability for less than the full amount. For more information or an application, visit michigan.gov/oic.
The last three options for final tax bills should be filed separately from the state income tax return.
Taxpayers with questions about their state income taxes are encouraged to use Treasury eServices. The online platform enables taxpayers to ask state income tax-related questions when convenient and avoids the extended wait times for calls this time of year.