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Michigan Department of Treasury Further Extends State Income Tax Relief

April 23, 2020

tax payer

On Friday, April 17, 2020, The Michigan Department of Treasury issued two departmental notices; a Notice of Automatic Extension of State and Income Tax Filing Deadlines (the “Notice of Automatic Extension”) and a Notice Regarding Electronic Requests for Informal Conferences. The Notice of Automatic Extension provides taxpayers additional extensions to file Michigan income tax returns and remit tax and waive penalties previously provided under the guidance of Executive Order 2020-26 and U.S. Department of Treasury Notice 2020-23. The Notice Regarding Electronic Requests for Informal Conferences provides taxpayers who have been denied a claimed refund or had a claimed refund adjusted the opportunity to request an informal conference via email.

Notice of Automatic Extension of State and Income Tax Filing Deadlines

Executive Order 2020-26

Effective March 27, 2020, Governor Whitmer issued Executive Order 2020-26 (the “Order”), which automatically extended taxpayer’s deadlines for income tax returns and state and city tax due dates. The Order provides an extension for state and city income taxes originally due April 15, 2020, or April 30, 2020, and also postpones the filing deadlines for such tax returns without accrual of penalty and interest (for more information, see our e-alert “Michigan Income Tax Deadlines Postponed by Governor Whitmer’s Executive Order 2020-26”). The state and city income tax payments were postponed three months to July 15, 2020, and July 31, 2020, as applicable. Further, the Order extended first quarter tax payments, which would otherwise be due in April, to July.

U.S. Department of Treasury Notice 2020-23

On April 9, 2020, the U.S. Department of Treasury issued Notice 2020-23 (the “Treasury Notice”), expanding on the previous relief provided to millions of taxpayers under Notices 2020-18 and 2020-20, which postponed deadlines for income tax returns to July 15, 2020, for income tax returns due after April 15, 2020, and before July 15, 2020 (for more information, see our e-alert “Treasury Further Expands Relief for Taxpayers in Notice 2020-23”). 

Michigan Income Tax Extensions

The Order and the Treasury Notice generally provide an extension for income tax returns and payments due between April 15, 2020, and July 30, 2020, including without limitation any quarterly estimated payments otherwise due during that period. The Michigan Department of Treasury, under the Notice of Automatic Extension, has now further extended the due dates for the filing and payment of Michigan annual returns, the application and tax payment for any extension of time to file a Michigan annual return, and payment for first and second quarter tax payments. The extensions provided under the Notice of Automatic Extension are automatic, and taxpayers do not need to file any supporting documentation for such extensions. The due date for filing of the annual income tax return and income tax payment for taxes has been automatically extended as follows:

  • State Individuals, Fiduciaries, and Composite Filers: For calendar and fiscal year individuals, fiduciaries, or composite filers that file state returns that would otherwise be due after April 15, 2020, but before July 15, 2020, the return and payment of tax has been extended to July 15, 2020.
  • State Corporate Filers: For calendar and fiscal year corporate filers that file state returns that would otherwise be due after April 30, 2020, but before July 31, 2020, the return and payment of tax has been extended to July 30, 2020.

The Notice of Automatic Extension is only applicable to income tax returns and income tax payments under the Michigan Income Tax Act. The Notice of Automatic Extension does not apply to city income taxes, which will remain extended as provided by Governor Whitmer’s Executive Order 2020-26.

Application and Payment for Extension Requests

Individuals and corporations may continue to request an extension to file the annual return provided that the tax due is paid by the date of the original return as amended by the Order or the Notice of Automatic Extension. Taxpayers who request an extension of time to file the annual return must file the extension and pay the tax associated with the return by July 15, 2020, or July 31, 2020, as applicable. However, if a taxpayer requests an extension, the extended due date of the annual return will not be changed by the Order or the Treasury Notice.

Calculation of Interest and Penalties and Accrual of Unpaid Refund Delays

For amounts deferable under the Order and the Notice of Automatic Extension, penalty and interest for late filing of return will not accrue between April 15, 2020, and July 15, 2020, for individuals and fiduciaries, and April 30, 2020, and July 31, 2020, for most corporations. However, the suspension of penalty and interest is only applicable to the extensions authorized by the Order and the Notice of Automatic Extension. The Order and the Notice of Automatic Extension further suspend the calculation of interest on any refund for Michigan state and city income taxes for the 2019 tax year. Interest will not begin to accrue until 45 days after the claim for refund is filed, or 45 days after the extended due date of the filing, whichever is later. 

Notice Regarding Electronic Requests for Informal Conferences

The Michigan Department of Treasury issued a second departmental notice on April 17, 2020, due to Governor Whitmer’s stay at home order. Michigan taxpayers who received a tax notice of refund adjustment or tax refund denial now have the option to request an informal conference via email to the Hearings Division of the Michigan Department of Treasury (Treas-Hearing@Michigan.gov). The Notice Regarding Election Requests for Informal Conferences cautions taxpayers that the submissions via email are not encrypted, and the taxpayer should take precautions to encrypt sensitive data contained in all emails prior to submission. The Michigan Department of Treasury has also provided taxpayers with a new form, Form 5713, to accompany a request for hearing or informal conference, which can be found on the Treasury Hearings and Appeals website. Although Form 5713 is not mandatory, it is highly recommended to help expedite any request for an informal conference.

If you have any questions about the information in this alert, please contact Michael Cumming (248-203-0740 or MCumming@dykema.com), Tony Frasca (734-214-7614 or AFrasca@dykema.com), Marie Deveney (734-214-7662 or MDeveney@dykema.com), Rob Tiplady (734-214-7644 or RTiplady@dykema.com), Scott Kocienski (248-203-0868 or SKocienski@dykema.com), Nardeen Dalli (248-203-0793 or NDalli@dykema.com), or your Dykema relationship attorney.

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