Withholding Tax

Every employer in Michigan who is required to withhold federal income tax under the Internal Revenue Code must also withhold Michigan income tax.

Who is required to register for 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.

Where can I get information on the withholding tax rate and personal exemption rate?

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 employees?

Yes. Nexus (a physical presence for the company) would be created for the out-of-state company. Employers would be required to register with the Michigan Department of Treasury to withhold Michigan income tax.

My company is located out of state and has no nexus in Michigan. We have employees who are Michigan residents working in an out-of-state location. Which state's withholding tax would apply?

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. A voluntary registration with the Michigan Department of Treasury to withhold Michigan income tax may be obtained or the employee must make estimated income tax payments directly to Michigan. Employers in all other states should withhold their state's withholding tax.

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.

Where do businesses send copies of their 1099 forms?

Business are not required to submit copies of 1099 forms to the State of Michigan unless Michigan income tax was withheld with the exception of 1099-MISC forms for services performed in Michigan. Submit the 1099 forms that include Michigan withholding and the 1099-MISC forms with Form 165, Annual Return for Sales, Use and Withholding Taxes.

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Public Act 211 of 2003 requires payors who issue form 1099-MISC to file a copy with the Michigan Department of Treasury. Prior to this amendment, Treasury did not require payors to file a 1099-MISC unless Michigan tax was withheld from the payments reported on the 1099.

Do I send 1099's and 1099-MISC with another form?

Any 1099 forms must be submitted when Michigan income tax is withheld. All 1099-MISC's for services performed in Michigan must be filed with the State of Michigan for tax years beginning after December 31, 2002. Please submit these forms with Form 165, Annual Return for Sales, Use, and Withholding Taxes.

What is the address to submit/file 1099-MISC to the State of Michigan?

Send the 1099-MISC forms to the Michigan Department of Treasury, Lansing, MI 48930. Include your:
    - company name
    - address
    - Social Security number or Federal Employer's Identification Number (FEIN)

What is the due date for filing 1099-MISC forms with Treasury?

Submissions must be postmarked by February 28. If the due date falls on a weekend or State holiday, the due date is the next business day.

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Can I file 1099-MISC by Magnetic Media?

Yes.

Where do I mail my magnetic media information for W-2 and 1099-MISC?

Send the magnetic media along with a copy of Form 447, Transmittal for Magnetic Media Reporting of W-2s, W-2Gs, and 1099s to:

Magnetic Media Unit - SUW
Return Processing Division
Michigan Department of Treasury
430 W. Allegan
Lansing, MI 48922

Mail Form 165, Annual Return for Sales, Use and Withholding Taxes separately to the address on back of the annual return.

Are electronic copies of W-2's and 1099's permitted?

No. Michigan cannot accept electronic copies of W-2's or 1099's at this time.

We are eliminating our tape drives; what magnetic media format can I use?

You may use floppy disks, or 3480 or 3490 tape cartridges.

What cities impose an income tax?

Albion, Battle Creek, Big Rapids, Detroit, Flint, Grand Rapids, Grayling, Hamtramck, Highland Park, Hudson, Ionia, Jackson, Lansing, Lapeer, Muskegon, Muskegon Heights, Pontiac, Port Huron, Portland, Saginaw, Springfield and Walker.

Where can I find the addresses and filing formats for cities that impose an income tax?

See City Tax Forms (Provided by the Michigan Department of History, Arts and Libraries).

Who do I call if I have additional questions about magnetic media filing?

Contact the Magnetic Media Unit at (517) 636-4456.

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