Michigan 529 Plan Tax Deduction

Michigan 529 Plan Tax Deduction

Michigan 529 Basics

529 plan is a tax-advantaged savings/investment plan designed to encourage saving for the future expenses of a designated beneficiary (typically one’s child or grandchild). The plans are named after Section 529 of the Internal Revenue Code and are administered by state agencies and organizations.

Have a 529 Tax question and live in Michigan? Give ATS Advisors a call or send us an email!

Michigan 529 Plan Tax Deduction?

All 529 account investment earnings are exempt from state and federal taxes. Withdrawals made for qualified expenses — which now include both K-12 and college education costs — are not penalized by taxes.

Michigan law further provides a state tax deduction for contributions made to a Michigan Education Savings Program (529) account, up to $5,000 for individuals and $10,000 for joint filers. The Michigan 529 Plan Tax Deduction is available for the amount of contributions minus the amount of qualified withdrawals made within a given tax year.

Types of Section 529 College Savings Plans:

There are two types of 529 college savings plans: prepaid tuition plans and savings plans:

  • Prepaid Tuition Plans allow for the pre-purchase of tuition based on today’s rates and then paid out at the future cost when the beneficiary is in college. Performance is often based upon tuition inflation. Prepaid plans may be administered by states or higher education institutions.

– The Michigan Education Trust (MET) is Michigan’s 529 prepaid tuition plan.

  • Savings Plans are different in that your account earnings are based upon the market performance of the underlying investments, which typically consist of mutual funds. Savings plans may only be administered by states.

– The Michigan Education Savings Program (MESP) is Michigan’s direct sold 529 savings plan.

– The MI 529 Advisor Plan is Michigan’s advisor sold savings plan.

 

How do 529 accounts work?

529 accounts are education savings plans operated by a state or educational institution. They are named after Section 529 of the U.S. Internal Revenue Code that governs these types of savings plans. Contributions earn money from investments and are able to be used for an individual child’s educational expenses.

What kind of K-12 expenses can 529 dollars now be used for tax-free?

Changes made in 2017 to the federal tax code expand the definition of qualified expenses to include “tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school.” This does not include tuition for pre-kindergarten schools or programs.

Legislation currently being considered by Congress would further expand the definition to include homeschool expenses, as well as several types of expenses that could benefit children enrolled in public or private schools: curriculum or online educational materials; tutoring services; AP, SAT, ACT or standardized achievement tests; dual enrollment higher-education programs; or therapies to help students with disabilities or other special learning needs.

Are separate 529 accounts needed for a child’s K-12 expenses and college expenses?

No. Federal law expanded the definition of qualified expense to include tuition for elementary and secondary education. This is in effect for 2018. A single 529 account for each child (considered the “designated beneficiary”) now may be used to pay for either elementary and secondary tuition, higher education expenses or both.

Who can set up a 529 account?

Any person can set up a 529 account and name an individual child as a beneficiary. Individuals do not need to have set up a 529 account in order to make contributions. Per IRS guidance, anyone can set up a 529 and name anyone as a beneficiary — a relative, a friend, even themselves. Check out the case studies below to see sample scenarios that show how a 529 plan may benefit a family like yours.

Michigan law also enables any of the following to open and contribute specifically to MESP accounts: “A state or local government agency or instrumentality, an entity exempt from taxation under section 501(c)(3) of the internal revenue code, an estate or trust, or a corporation that enters into a Michigan education savings program agreement.”

Are there any limits on 529 accounts?

There is no limit on 529 withdrawals to pay for higher education, but federal law limits withdrawals for elementary and secondary education expenses to $10,000 per year. Different 529 plans have maximum allowable account balances. For example, the MESP limits the amount to $500,000.

Also, according to the website 529 K12 Facts: “You can donate up to $15,000 per year ($30,000 if married filing jointly) beginning in tax year 2018 without incurring federal gift tax. Contributions of up to $75,000 ($150,000 if married filing jointly) also can be treated as having been made over a five-year period, for federal gift tax purposes.”

 

529 Example:

Parents start saving in a 529 plan at their child’s birth, contributing $250/month for 14 years (equaling $42,000). The tax-

deferred growth in the 529 plan’s earnings means $10,000 more of their own funds are available than if

 they had invested in a standard taxable account. They decide to enroll their child in a private high school. Enough money is there to pay up to $10,000 for each year’s tuition, with remaining plan dollars free to help pay for higher education.

Michigan Personal Property Tax Exemption 2023

Michigan Personal Property Tax Exemption 2023

Questions about the Michigan Personal Property Tax Exemption 2023 ?

Contact Plymouth Michigans ATS Advisors!

The General Property Tax Act provides for exemptions for certain categories of personal property including: Small Business Taxpayer Exemption, Eligible Manufacturing Personal Property and Act 328 – New Personal Property. These links will provide information on each of these exemptions including determining eligibility and how to claim the exemption. Email us if you have questions at State-Tax-Commission@michigan.gov.

Eligible Manufacturing Personal Property (EMPP) MCL 211.9m and MCL 211.9n Exemption

Beginning December 31, 2015, qualified new personal property and qualified previously existing personal property is exempt from taxation.

Qualified New Personal Property is defined as property that was initially placed in service in this state or outside of the state after December 31, 2012 or that was construction in progress on or after December 31, 2012 that had not been placed in service in this state or outside of this state before 2013 and is eligible manufacturing personal property (EMPP).

Qualified Previously Existing Personal Property means personal property that was first placed in service within this state or outside of this state more than 10 years before the current calendar year and is eligible manufacturing personal property (EMPP).

Bulletins

Small Business Taxpayer Exemption – MCL 211.9o

The small business taxpayer personal property exemption provides a complete exemption from personal property tax for industrial or commercial personal property when the combined true cash value of all industrial personal property and commercial personal property owned by, leased by or in the possession of the owner or a related entity claiming the exemption is less than $80,000 in the local tax collecting unit and the property is not leased to or used by a person that previously owned the property or a person that, directly or indirectly controls, is controlled by, or under common control with the person that previously owned the property. Form 5076 must be filed with the local tax collecting unit no later than February 20.

Statute

Assessor Guide to Small Business Taxpayer Exemption

Forms

Plymouth Michigan Property Tax

Plymouth Michigan Property Tax

Are you a new or existing Plymouth, MI resident? Wondering about Plymouth Michigan Property Tax or what taxes Plymouth has?

Give your trusted ATS Plymouth tax advisors a call!

 

Summer Taxes

Your summer tax bill includes the tax levies for:

  • City of Plymouth
  • Plymouth-Canton Schools
  • State Education Tax (SET)
  • Wayne County Regional Educational Service Agency(RESA)
  • Enhanced Wayne County Regional Educational Service Agency (ENH RESA)
  • Schoolcraft College
  • Wayne County Operating

Summer tax bills are due August 10 annually.

Summer Tax Bills are payable through August 10 without penalty. They may be paid at the City Hall counter, placed in the drop box next to the book return at the library,  or deposited in the drop box in the City Hall lobby if the counter is closed.

 

Winter Taxes

Your winter tax bill includes the tax levies for:

  • Wayne County Voted Millage
  • Wayne County Jail
  • Wayne County Parks
  • Plymouth District Library
  • Huron Clinton Metro Authority
  • Detroit Regional Zoo
  • Detroit Institute of Arts Museum

Winter tax bills are due February 28 each year.

Winter Tax Bills are payable through February 28 without penalty. They may be paid at the City Hall counter, placed in the drop box next to the book return at the library,  or deposited in the drop box in the City Hall lobby if the counter is closed. All tax payments placed in the drop boxes by December 31 will be receipted as paid in the current year. Additional information is provided on the back of your bill. Please review your tax bill to check the correctness of the information appearing on it. If you receive a bill in error, please return the tax bill to the City Treasurer’s Office. If you are the owner or agent of the property but the name or address information is incorrect, please correct it on the bill and mail it back with your payment. If you need additional information, please call the City Treasurer’s Office at 734- 453-1234, during regular business hours.

Here are the current millage rates.

In addition to paying your tax bill in person on via mail, there are several other options.

Online Payments

You can  pay your taxes online via a credit/debit card through the online property information site. There is a convenience fee associated with using this service.

Direct Payment
You may request that your payment be made automatically by completing Direct Payment Enrollment form.


Special Payment Deferments

The State of Michigan has a program that allows certain property owners to defer their tax payments.  Information on this program is available on the state’s website. The Step Forward Michigan program also provides property tax assistance.

Does Michigan Have a State Inheritance Tax?

Does Michigan Have a State Inheritance Tax?

Does Michigan Have a State Inheritance Tax?

Yes, the Inheritance Tax is still in effect, but only for those individuals who inherited from a person who died on or before September 30, 1993.

For heirs of individuals who passed after 1993, inheritances from a Michigan estate that includes only property located in Michigan will not be subject to inheritance tax. But, if the estate includes property located in other states, a beneficiary who inherits the property may be subject to tax in that state.

Although there is technically no longer a Michigan Inheritance Tax, as of 2023 six states still have one: Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. If you are the heir of a loved one who is a Michigan resident that passed away while owning property in one of these 6 states, you might still have to pay an inheritance tax on that property based on the state’s laws.

There are also certain situations with respect to “After Discovered Assets” where the Michigan Inheritance Tax may still be a problem. Continue reading to learn more…

Have a Question? Contact ATS Advisors

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What Does The Michigan Inheritance Tax Consider As An “After Discovered Asset”?

The Michigan Inheritance Tax considers something as an “After Discovered Asset” when an estate has been closed, but a new asset has been found that was not included in the original estate. If this situation applies to you, the Michigan Department of Treasury has instructions on what you should do in this situation.

What Is The Difference Between The Michigan Inheritance Tax And The Estate Tax?

The major difference between the Michigan Inheritance Tax and the Estate Tax is that the Estate Tax is a tax imposed on the estate itself, whereas the Inheritance Tax is a tax on the actual heir of the property.

Does Michigan Have An Estate Tax?

There is no longer a Michigan Inheritance Tax. Additionally, the State of Michigan does not have an Estate Tax either. However, there is a Federal Estate Tax that your estate may be subject to.

What Is The Federal Estate Tax?

The Estate Tax, commonly referred to as the “Death Tax”, is a tax on your right to transfer property at your death. Proper Estate Planning done prior to death can help you reduce both Estate Taxes and Inheritance Taxes if you own property in a state that still has Inheritance Tax.

Does Michigan Have a State Inheritance Tax? – 2023

Is Michigan Tax Friendly For Retirees?

Is Michigan Tax Friendly For Retirees?

Michigan Retiree Tax Information

Is Michigan Tax Friendly For Retirees? In short, Michigan is a relatively tax-friendly destination for retirees. It does not tax Social Security and it provides a sizable deduction for seniors on other types of retirement income. Sales taxes are somewhat below average, while property taxes are above average. Michigan does not have an estate tax or an inheritance tax.

ATS Advisors is a family owned Michigan small business aimed at helping fellow Michiganders with all of their tax and financial situations. Contact ATS to talk to us!

Is Social Security taxable in Michigan?

Social Security payments are not taxed in Michigan. Any Social Security retirement income that is considered taxable on your federal income tax return can be subtracted from your Adjusted Gross Income (AGI) when filing your state taxes in Michigan.

Are other forms of retirement income taxable in Michigan?

Yes, but seniors can deduct most or all of this income. The deduction applies to income from retirement savings accounts and pensions. It varies depending on the age of the filer.

Taxpayers born before 1946 are eligible for a deduction against private pension income of $54,404 per person ($108,808 for joint filers) for tax year 2022. These taxpayers can also subtract interest, dividends and capital gains up to $12,127 for single filers and $24,254 for joint filers. Public pension income is completely exempt.

Taxpayers born between 1946 and 1952 can claim a deduction against all income of $20,000 ($40,000 for joint filers). For income from a government pension, that figure is $35,000 for single filers and $55,000 for joint filers ($70,000 for joint filers if each filer has such a pension). Taxpayers born after 1952 can claim the same deductions once they turn 67.

So, if you had $60,000 of 401(k) income and you were born in 1949, you would be able to deduct $20,000 of that income. The remaining $40,000 would be taxed at the Michigan flat income tax rate of 4.25%.

How high are property taxes in Michigan?

The average effective property tax rate in Michigan is 1.32%, which is pretty high. That adds up to about $1,320 for every $100,000 in home value. Of course, property taxes are higher in some areas than in others. In Wayne County the average effective rate is 2.16%. In Mackinac County, it is less than half that at 1.06%.

What is the Michigan homestead property tax credit?

The homestead property tax credit is available to homeowners in Michigan who meet certain eligibility requirements for income and property value. Homeowners who are eligible can claim a credit on all property taxes owed.

The credit application is filed with your annual income tax return. To be eligible, you must have household income of $60,600 or less and your home’s taxable value must be no more than $136,600. You also need to have owned or were contracted to pay rent while occupying a Michigan homestead for at least 6 months during the year where property taxes and/or service fees were imposed.

You are not eligible if 100% of your household resources were received from the Michigan Department of Health and Human services.

Another form of property tax relief available to homeowners in Michigan is the principal residence exemption, or PRE. This allows homeowners to exempt their primary residence from up to 18 mills of local school district operating taxes. (A mill is one tenth of a percent, so 18 mills is 1.8%, which applies to taxable value.)

How high are sales taxes in Michigan?

The state sales tax rate in Michigan is 6%, which is slightly above average. But because the state has no local sales taxes, its state and local combined rates are also below average.

What other Michigan taxes should I be concerned about?

If you plan on working during retirement, keep in mind that many Michigan cities collect their own income taxes in addition to the state income tax rate of 4.25%. In general, these city income taxes range from about 1% to 1.5%, but the Detroit city income tax is 2.4%. Those taxes do not apply to any form of retirement income, however.

Michigan does not have an estate tax or inheritance tax.

Tax Calculator Michigan Married

Tax Calculator Michigan Married

Tax Calculator Michigan Married – 2023

Welcome to ATS Advisors, your trusted Michigan Tax Experts. If you would like to file with us this year, contact us today!

Need to calculate your Michigan taxes? Click the link below!

MICHIGAN TAX CALCULATOR

What You Need To Know About Michigan State Taxes

The state of Michigan requires you to pay taxes if you’re a resident or nonresident that receives income from a Michigan source. The state income tax rate is 4.25%, and the sales tax rate is 6%.

Michigan Income Tax Brackets and Rates

Michigan has a flat tax rate of 4.25% for 2021, meaning everyone pays the same state income tax regardless of their income.

 

Income Tax Deductions for Michigan

Tier 1 Michigan Standard Deduction

Taxpayers born prior to 1946 may be eligible for the Tier 1 Michigan Standard Deduction, which is applicable to retirement and pension benefits of up to $54,404 for single filers and up to $108,808 for taxpayers filing jointly.

Tier 2 Michigan Standard Deduction

Taxpayers born between 1946 and 1952 may be eligible for the Tier 2 Michigan Standard Deduction, which is worth $20,000 for single filers and up to $40,000 for taxpayers filing jointly.

Tier 3 Michigan Standard Deduction

Taxpayers born in 1953 and 1954 may be eligible for the Tier 3 Michigan Standard Deduction, which is worth $20,000 for single filers and up to $40,000 for taxpayers filing jointly.

Michigan 529 Contributions Deduction

Contributions to Michigan Education Savings Program (MSEP), MI 529 Advisor Plan (MAP), and Michigan Achieving a Better Life Experience Program (MiABLE) 529 accounts may be deducted. Deductions for these contributions are capped at $10,000 for single filers and $20,000 for joint filers. For the MESP and MAP accounts, the maximum deduction is $5,000 combined for a single taxpayer and $10,000 combined for couples filing jointly. The same cap applies to MiABLE accounts.

Michigan Education Trust Deduction

You can deduct contributions you made to a Michigan Education Trust (MET) 529 prepaid tuition contract, including charitable contributions to the MET’s Charitable Tuition Program.

Tax Calculator Michigan Married – 2023

Michigan State Income Tax Credits

Home Heating Tax Credit

Michigan residents who meet certain qualifications may request a credit to help cover heating expenses. Partial-year residents are eligible, but students who are being claimed as someone else’s dependent, residents of college or university-operated housing and those living in licensed care facilities are generally not eligible.

The standard credit has a maximum income ceiling of $39,157 and a maximum allowance of $1,371 (unless you qualify for certain exemptions). The alternate credit computation, which uses your heating costs to determine the amount of your credit, has an income ceiling of $27,700.

You must fill out the Home Heating Credit Claim MI-1040CR-7 form to determine your eligibility. The deadline for that submission is Sept. 30, 2022.

Michigan Earned Income Tax Credit (EITC)

If you claim an EITC on your federal tax return, you can claim one on your Michigan income tax return as well. The Michigan EITC is equal to 6% of your federal credit.

The federal EITC income cap ranges from $21,430 to $57,414 depending on how you file and how many children or relative dependents you claim. The maximum federal EITC amount you can claim on your 2021 tax return is $6,728.

For example, if you’re eligible for $3,000 federally, you can claim $180 through the Michigan EITC.

Do I Have to Pay Income Tax in Michigan?

You’re required to file a Michigan tax return if you have income from a Michigan source. This applies whether you are a full-time or part-time resident, or live elsewhere but earn income from a Michigan-based source.

Residency Status

You’re considered a resident if:

  • You reside in Michigan full time
  • You reside in Michigan for part of the year

Michigan residents who earn income in Illinois, Indiana, Kentucky, Minnesota, Ohio and Wisconsin need only pay Michigan income tax on that income.

 

Sales Tax and Sales Tax Rates

Michigan charges a sales tax of 6%. This is a statewide sales tax and Michigan doesn’t have separate rates by city or county.

 

Property Taxes and Property Tax Rates

Property taxes are determined locally.

Capital Gains Taxes

Michigan taxes capital gains at the same rate as other income, 4.25%.

Senior citizens born before 1946 can deduct interest, dividend and capital gains on their state income tax return. For 2021 taxes, the maximum deduction for single filers is $12,127, and the maximum deduction for joint filers is $24,254.

Inheritance and Estate Tax

Michigan doesn’t have an inheritance or estate tax.

Homestead Property Tax Credit

If you own property in Michigan and live in the state at least half the year, you may be eligible for the homestead property tax credit. The credit is available for taxpayers who have total household resources below $60,600.

Total household resources include income, capital gains, and other money you have received. See page 27 of the instructions for the Michigan 1040 form for a full list of what’s included in total household resources.

If the taxable value of your property exceeds $136,600, you’re not eligible to receive the credit.

Rent Credit

Michigan offers a tax credit for rent paid by residents. Twenty-three percent of the amount you paid for rent is considered property tax, and you can claim it on your state tax return. Your total household resources must be $60,600 or below to claim the credit.

An alternate credit is available for senior citizens age 65 and up who pay more than 40% of their total household resources in rent. The maximum credit for senior renters is $1,500.

Tax Calculator Michigan Married – 2023

Michigan Small Business Taxpayer Exemptions

Michigan Small Business Taxpayer Exemptions
Michigan Small Business Tax Exemptions

Michigan Small Business Tax Exemptions

Is your Michigan business exempt from Taxes? Here is a list of all exemptions. Continue reading to see if you are exempt.

Questions? Contact ATS Advisors of Michigan

Common Michigan Small Business Taxpayer Exemptions:

501(c)(3) and 501(c)(4) Organizations

501(c)(3) and 501(c)(4) organizations must provide proof that they are exempt under these codes by the Internal Revenue Service. In addition to this they must provide a certificate of exemption stating that the property will be used or consumed in carrying out the operations of the organization. Revenue Administrative Bulletin 1995-3 and 2002-15 has more information on this topic.

Churches

Sales to organized churches or houses of religious worship are exempt from sales tax. These exempt sales must not involve property used in commercial enterprises. Vans or buses may be purchased exempt if the manufacturer’s rated seating capacity is 10 or more and it is used primarily for transportation of persons for religious purposes. Churches may not purchase any other type of vehicle exempt. Anyone who is directly engaged in the business of constructing, altering, repairing, or improving real estate for a church or a house of religious worship is liable for the sales tax on the inventory value of the materials affixed to the property, even if the church purchases the materials. Revenue Administrative Bulletin 1995-3 and 2002-15 has more information on this topic.

Government

Sales to the United States government, the State of Michigan and its political subdivisions, departments and institutions are not subject to tax, if the sales are ordered on the government form or purchase order and are paid for directly to the seller by warrant on government funds. Sales to the American Red Cross, and its chapters and branches are exempt. All sales to other states or countries are subject to Michigan sales tax. Sales to employees of the government for their own use are subject to tax. The exemption certificate is 3372 Michigan Sales and Use Tax Certificate of Exemption.

Hospitals

Sales to hospitals are exempt from sales tax when the organization is not operated for profit. The income or benefit from the operation must not inure to any individual or private shareholder, directly or indirectly. Revenue Administrative Bulletin 1995-3 and 2002-15 has more information on this topic.

Industrial Processors

An industrial processing exemption is allowed for property which is used or consumed in transforming, altering, or modifying tangible personal property by changing the form, composition, or character of the property for ultimate sale at retail or for sale to another processor for further processing and ultimate sale at retail. The industrial processing exemption does not include property which is or becomes affixed to real estate, office supplies, administrative office equipment, or vehicles licensed for public highway use, except when the vehicle is used to mix and agitate materials added at the plant or job site in the concrete manufacturing process. Industrial processing also does not include the receipt or storage of raw materials extracted by the user or consumer or the preparation of food or beverages by a retailer for retail sale. The exemption certificate is 3372 Michigan Sales and Use Tax Certificate of Exemption .

Retailers

Retailers purchasing for resale should provide a signed exemption certificate by completing form 3372 Michigan Sales and Use Tax Certificate of Exemption and check box 1. For Resale at Retail in Section 3, Basis for Exemption Claim. Their sales tax license number must be included in the blank provided on the exemption claim. However, a seller should not accept the sales tax license number alone as a claim of exemption. The department does not issue tax-exempt numbers.

Schools

Sales to schools and parent cooperative preschools are exempt from sales tax when the organization is not operated for profit. The income or benefit from the operation must not inure to any individual or private shareholder, directly or indirectly. PTA, PTO, and all other groups and organizations must qualify separately for exemption when making purchases for their organizations. Sales to teachers are subject to tax. Revenue Administrative Bulletin 1995-3 and 2002-15 has more information on this topic.

Wholesalers

Wholesalers purchasing for resale should provide the seller with a completed form 3372 Michigan Sales and Use Tax Certificate of Exemption and check the box for Resale at Wholesale. Sales tax licenses are not issued to wholesalers.
-Michigan Small Business Taxpayer Exemptions-

Additional Exemptions and Deductions

Third-Party Lenders – Bad Debt Deductions

Effective October 1, 2009, a bad debt deduction may be claimed by a third-party lender or a retailer, provided that the retailer who reported the tax and the third-party lender financing the sale execute and maintain a written election designating which party is entitled to claim the deduction. There is no Treasury form to make this election.  However, the election must be written, must be signed by both parties, and must clearly and unequivocally state which party is entitled to the deduction; the mere assignment of the right to the debt alone does not satisfy the written election requirement.  The election must be executed before the bad debt is incurred.

The written election must be retained by the parties and made available to the Department upon request or audit.  In addition to the written election, the following conditions must also be met:

  • No deduction or refund was previously claimed or allowed on any portion of the account receivable.
  • The account receivable has been found worthless and written off by the seller that made the sale or by the lender on or after September 30, 2009.
  • The bad debt is eligible to be claimed, in accordance with the taxpayer’s accounting method, as a deduction under Section 166 of the Internal Revenue Code, 26 USC 166, or would be recognized as a bad debt if the claimant were a corporation.

A party making a refund claim must provide the written election to the Department with its refund request. A request for a refund based on bad debt incurred from the sale of motor vehicle must include a copy of the RD-108 for that vehicle.

For purposes of this deduction, “lender” includes any of the following:

  • A person that holds or held an account receivable that was purchased directly from the taxpayer that reported the tax.
  • Any person that holds or held an account receivable pursuant to that person’s contract directly with the taxpayer that reported the tax.
  • The issuer of a private label credit card that may only be used to make purchases from the vendor whose name or logo appears on the card or instrument.

The following amounts shall not be included as bad debt:

  • Interest or finance charges.
  • Sales or use tax charged or collected on the original sale.
  • Uncollectible amounts on property that remains in possession of the seller until the full purchase price is paid, e.g., property placed on layaway.
  • Expenses incurred in attempting to collect any account receivable or any portion of an account that is subsequently recovered.
  • Sales tax charged on property that is subsequently repossessed.
  • Any debt or account receivable that was sold, assigned, or transferred to, and remains in the possession of, a third party for collection.
  • A sale where the tax was remitted to the Department after the expiration of the applicable statute of limitations.

Source MCL 205.54iMCL 205.99.

Interstate (Fleet) Motor Carriers Exemption

Michigan provides a sales and use tax exemption to interstate (fleet) motor carriers for rolling stock and parts affixed to rolling stock that are purchased, rented or leased by an interstate (fleet) motor carrier and used in interstate commerce. The exemption is for the purchase or use of qualified trucks and trailers (and parts affixed to them) that are purchased, leased, or rented after April 30, 1999. For additional information please refer to Internal Policy Directive 2003-1 and Internal Policy Directive 2010-1.

Interstate (fleet) motor carriers who qualify for exemption may claim exemption from sales or use tax by providing the seller or lessor with the prescribed Michigan Sales and Use Tax Certificate of Exemption, form 3372. The buyer or lessee would check the box “Rolling Stock purchased by an Interstate Motor Carrier”.

Use Tax Exemption on Vehicle Title Transfers

Michigan grants an exemption from use tax when the buyer and seller have a qualifying family relationship.

Read the brochure for details

– Michigan Small Business Taxpayer Exemptions –

Common Questions and Answers:

Can a customer instruct a seller not to charge sales or use tax because they will pay it directly to Michigan?

Yes, if the customer is authorized by Treasury and has a “direct pay permit” that covers the property purchased or leased.  The customer must provide to the seller a completed Form 3372, Michigan Sales and Use Tax Certificate of Exemption, or the required information in another acceptable format.  See Revenue Administrative Bulletin (RAB) 2016-14.  When stating its basis for claiming an exemption, the customer should state, “Authorized to pay sales or use taxes on purchases of tangible personal property directly to the State of Michigan” and must include its account number.

Does Michigan issue tax exempt numbers? If not, how do I claim an exemption from sales or use tax?

The Michigan Department of Treasury does not issue tax exempt numbers. In order to claim an exemption from sales or use tax, a purchaser must provide a valid claim of exemption to the vendor by completing one of the following:

  • Michigan Sales and Use Tax Certificate of Exemption (Form 3372)
  • Multistate Tax Commission’s Uniform Sales and Use Tax Certificate
  • Streamlined Sales and Use Tax Agreement Certificate or the same information in another format.

Note: A seller should not solely accept an FEIN as evidence of exemption from sales and use taxes.

How do I claim a valid exemption with my supplier?

To claim exemption, a purchaser must provide the supplier with one of the following:

  • Michigan Sales and Use Tax Certificate of Exemption (Form 3372)
  • Multistate Tax Commission’s Uniform Sales and Use Tax Certificate
  • Streamlined Sales and Use Tax Agreement Certificate or the same information in another format

Is manufacturing equipment tax exempt?

Michigan provides an exemption from sales or use tax on machinery or equipment used in industrial processing and in their repair and maintenance. The exemption does not include tangible personal property affixed to and becoming a structural part of real estate.

For further information on exemptions refer to Revenue Administrative Bulletin 2000-4.

Are purchases made for agricultural production tax exempt?

Michigan provides an exemption from sales or use tax on tangible personal property used in tilling, planting, caring for or harvesting things of the soil, in the breeding, raising or caring of livestock poultry or horticultural products for further growth. The exemption does not include tangible personal property affixed to and becoming a structural part of real estate.

For further information on exemptions refer to Qualified Agricultural Property Exemption Guidelines.

Is my purchase of a truck or trailer considered “rolling stock” and exempt from tax?

NOTE: Your first tractor/trailer lease/purchase IS NOT EXEMPT from Michigan sales or use tax.

In order to be exempt from Michigan sales or use tax certain criteria must be met. Exemption is allowed in Michigan on the sale of rolling stock purchased by an interstate motor carrier or for the rental or lease of rolling stock to an interstate motor carrier and used in interstate commerce.

According to MCL 205.54r,

  • Rolling stock means a qualified truck, a trailer designed to be drawn behind a qualified truck, and parts affixed to either a qualified truck or a trailer designed to be drawn behind a qualified truck.
  • Interstate motor carrier means a person engaged in the business of carrying persons or property, other than themselves, their employees, or their own property, for hire across state lines, whose fleet mileage was driven at least 10% outside of this state in the immediately preceding tax year.
  • Qualified truck means a commercial motor vehicle power unit that has 2 axles and a gross vehicle weight rating in excess of 10,000 pounds or a commercial motor vehicle power unit that has 3 or more axles.

Motor carriers who qualify may claim exemption from sales or use tax by providing the seller or lessor with the prescribed Form 3372, Michigan Sales and Use Tax Certificate of Exemption. The buyer or lessee would check the box “Rolling Stock purchased by an Interstate Motor Carrier”.

Is a vehicle purchased by a church tax exempt?

ONLY vans or buses may be purchased exempt if the manufacturer’s rated seating capacity is 10 or more and it is used primarily for transportation of persons for religious purposes.

I am a 501(c)(3)/501(c)(4) Organization, how do I claim exemption from Michigan Sales and Use Tax?

Organizations exempted by statute, organizations granted exemption from federal income tax under Internal Revenue Code Section 501(c)(3) or 501(c)(4), or organizations that had received an exemption letter from the Michigan Department of Treasury prior to June 1994 are entitled to sales and use tax exemption in the State of Michigan.

Please refer to Revenue Administrative Bulletin (RAB) 1995-3 for more information on the exemption from Michigan sales and use tax as it relates to nonprofit entities.

In order to claim exemption, the nonprofit organization must provide the seller with both:

  • A completed Form 3372, Michigan Sales and Use Tax Certificate of Exemption
  • Evidence of nonprofit eligibility:
    • Either the letter issued by the Department of Treasury (prior to June 1994),or
    • Your federal determination as a 501(c)(3) or 501(c)(4) organization.

How do I obtain a tax exempt number to claim an exemption from Sales or Use Tax?

The Michigan Department of Treasury does not issue “tax exempt numbers”.

Form 3372, Michigan Sales and Use Tax Certificate of Exemption, is used to claim exemption from Michigan Sales and Use Tax.  The buyer must present the seller with a completed form at the time of purchase.  For more information on exemption requirements and the procedures to claim an exemption see Revenue Administrative Bulletin 2002-15.

A customer is providing me with their tax exempt number as proof that they do not have to pay sales tax on their purchase; is this correct/valid?

The Department of Treasury does not issue or accept tax exempt numbers. Sellers should not accept a tax exempt number as evidence of exemption from sales and use tax.

To claim exemption for purchases, the buyer must present the seller with a completed Form 3372, Michigan Sales and Use Tax Certificate of Exemption. The seller will retain the certificate in their records.

I am a retailer, how do I claim a resale exemption with my supplier?

To claim exemption, a retailer must provide the supplier with a completed Form 3372, Michigan Sales and Use Tax Certificate of Exemption, indicating that the purchase is for “Resale at Retail”. Their sales tax license number must be included in the space provided.

NOTE:  A seller should not accept a FEIN as evidence of exemption from sales and use taxes without Form 3372.

Michigan Small Business Taxpayer Exemptions

Step by Step Michigan Unemployment Tax Form 2022

Step by Step Michigan Unemployment Tax Form 2022

LEO Dec.2022 – Michigan Unemployment Tax Form 2022

Claimants have until Jan. 2 2023, to select electronic delivery option

As tax season approaches, the Michigan Unemployment Insurance Agency (UIA) reminds those who were paid jobless benefits this year to choose one of two options for getting a copy of their 1099-G tax form. You can receive an electronic copy accessible online or a paper copy sent by mail to the address on file with UIA.

Unemployment benefits are taxable, so payments received in 2022 must be reported on state and federal tax returns. Anyone who received jobless benefits this year will receive Form 1099-G Certain Government Payments as proof of income and how much income tax was withheld this year.

Claimants have until Jan. 2, 2023, to request to that an electronic version of their 1099-G be posted to their Michigan Web Account Manager (MiWAM) account. To change your preference:

  • Log into your MiWAM account at MiLogin.Michigan.gov.
  • Under the Account Alerts tab, click on “Request a delivery preference for Form 1099-G.”
  • If your Account Alerts tab doesn’t have a 1099-G link, click on the Claimant Services tab; then select “Delivery Preference for Form 1099-G.”

Statements will be available to view or download by the end of January 2023. Here’s how to access it online:

  • Go to the “I Want To” heading in MiWAM.
  • Click on the “1099-G” link.
  • Click on the 1099-G letter for the 2022 tax year.

Those who do not request an electronic 1099-G form will have a paper copy sent to them at the end of January through the U.S. postal mail to the address listed on their MiWAM account. If you moved in the past year, be sure to update your mailing address in MiWAM to receive your tax form at the correct address.

UIA’s Your 1099-G Tax Form webpage answers key questions claimants may have.

If the 1099-G that you receive lists an incorrect amount in “total payment” or “tax withheld,” you can request a revised form by downloading and completing Form UIA 1920, Request to Correct Form 1099-G. Then, mail the form to:

Unemployment Insurance Agency, 1099-G

P.O. Box 169

Grand Rapids, MI 49501-0169.

Or Fax it to 1-517-636-0427.

Timely access to tax forms is a tenet of UIA Director Julia Dale’s wide-ranging reform of the agency, including providing exemplary customer service, fighting fraud, and instilling a human-centered approach to interactions with workers and employers. Since Dale was named director in October 2021, she has:

  • Announced a replacement for the agency’s decade-old computer system with a user-friendly, state-of-the-art interface for claimants and businesses. A new system will allow for quick analysis of data that is currently not possible and timely program adjustments as economic conditions change.
  • Approved more than 76,000 overpayment waivers this year of state and federal benefits paid out during the pandemic to Michigan workers and totaling more than $555 million.
  • Obtained two federal approvals for a pause on certain collections for those facing overpayments.
  • Secured a $6.8 million equity grant from the U.S. Department of Labor (DOL) to make it easier for workers in underserved communities to access jobless benefits.
  • Reassigned staff and resources to address the largest categories of claims that are contributing to the agency’s case backlog.
  • Implemented new ethics and security clearance policies for employees and contractors.
  • Redesigned the agency’s public website at Michigan.gov/UIA for easier use on mobile phones and tablets.
  • Rebuilt to nearly $1.8 billion (and growing) the UI Trust Fund from which weekly benefits are paid to workers who lose their job through no fault of their own.
  • Worked to simplify its correspondence using a human-centered approach to make letters easier to understand for claimants and employers.

Questions? Contact ATS Advisors

Contact ATS

3 Things To Know About Michigan Estate Tax

3 Things To Know About Michigan Estate Tax

Is There a Michigan Estate Tax?

There is no estate tax in Michigan. Michigan is one of 38 states that have no estate tax. No matter the size of your estate, you won’t owe money to the Wolverine State. You might owe taxes to the federal government through the federal estate tax, depending on the size of your estate.

Even though there is no Michigan estate tax, you might still owe the federal estate tax. The exemption for that tax is $11.70 million in 2021 and $12.06 million in 2022. This tax is portable for married couples, meaning that with the right legal moves a married couple can protect up to $24.12 million when both spouses have died.

What Is The Estate Tax?

The estate tax is applied to the estate of a recently deceased person after they die but before the money is passed on to their heirs. It is sometimes referred to as the “death tax.”

The estate tax is not to be confused with the inheritance tax. That tax is applied to a person’s heirs after they have already received their inheritance.

Does Michigan Have an Inheritance Tax and Gift Tax?

Like the majority of states, Michigan does not have an inheritance tax. If you stand to inherit money in Michigan, you should still make sure to check the laws in the state where the person you are inheriting from lives. In Pennsylvania, for example, the inheritance tax can apply to heirs who live out of state if the descendant lives in the state.

Michigan also has no gift tax. The federal gift tax exemption is $15,000 per recipient per year in 2021 and $16,000 in 2022

 

TIPS:

  • Estate planning, in Michigan or elsewhere, takes time and knowledge. If you need some help, you should consider reaching out to ATS Advisors. We are professionals in this matter and are here to help!

Plymouth Township Summer Taxes & Winter Taxes

Plymouth Township Summer Taxes & Winter Taxes

Plymouth Township Summer Taxes & Winter Taxes

Any Questions? Contact ATS Advisors Plymouth

Your summer tax bill includes the tax levies for:

  • City of Plymouth
  • Plymouth-Canton Schools
  • State Education Tax (SET)
  • Wayne County Regional Educational Service Agency(RESA)
  • Enhanced Wayne County Regional Educational Service Agency (ENH RESA)
  • Schoolcraft College
  • Wayne County Operating

Summer tax bills are due August 10 annually.

Summer Tax Bills are payable through August 10 without penalty. They may be paid at the City Hall counter, placed in the drop box next to the book return at the library,  or deposited in the drop box in the City Hall lobby if the counter is closed.

 

Winter Taxes

Your winter tax bill includes the tax levies for:

  • Wayne County Voted Millage
  • Wayne County Jail
  • Wayne County Parks
  • Plymouth District Library
  • Huron Clinton Metro Authority
  • Detroit Regional Zoo
  • Detroit Institute of Arts Museum

Winter tax bills are due February 28 each year.

Winter Tax Bills are payable through February 28 without penalty. They may be paid at the City Hall counter, placed in the drop box next to the book return at the library,  or deposited in the drop box in the City Hall lobby if the counter is closed. All tax payments placed in the drop boxes by December 31 will be receipted as paid in the current year.

Additional information is provided on the back of your bill. Please review your tax bill to check the correctness of the information appearing on it. If you receive a bill in error, please return the tax bill to the City Treasurer’s Office. If you are the owner or agent of the property but the name or address information is incorrect, please correct it on the bill and mail it back with your payment. If you need additional information, please call the City Treasurer’s Office at 734- 453-1234, during regular business hours.

Here are the current millage rates.

In addition to paying your tax bill in person on via mail, there are several other options.

Online Payments

You can  pay your taxes online via a credit/debit card through the online property information site. There is a convenience fee associated with using this service.

Direct Payment
You may request that your payment be made automatically by completing Direct Payment Enrollment form.


Special Payment Deferments

The State of Michigan has a program that allows certain property owners to defer their tax payments.  Information on this program is available on the state’s website. The Step Forward Michigan program also provides property tax assistance.