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What should I do if I cannot pay my debt in full?

What should I do if I cannot pay my debt in full?

Making payments BEFORE a "Bill for Taxes Due" is issued:

At this time you are not eligible for an Installment Agreement/payment plan. There are 2 ways payments can be made prior to receiving a Notice of Intent/Final Bill for Taxes Due:

  1. You may submit payment by check or money order. Use the Michigan Individual Income Tax Payment Voucher MI-1040-V, include your Social Security number and tax year on the check or money order, and submit them to the following address:

    2. Michigan Department of Treasury
    P.O. Box 30774
    Lansing, MI 48909

  2. Use the Michigan Individual Income Tax e-Payments system and select the 2024 MI-1040 payment type

    Note: e-Payment system is only available for current tax year payments. You can make a payment with checking/savings with no fee or by credit/debit card with a convenience fee by selecting the e-Payment button above.             

Making payments AFTER a "Bill for Taxes Due" is issued:

After you receive a "Bill for Taxes Due" (Form 168, Intent to Assess) or "Final Bill for Taxes Due" (Form 169, Final Assessment) the Michigan Department of Treasury may consider an installment agreement if your situation meets certain criteria.

Applying for an Installment Agreement 

For installment agreements for 48 months or less, the taxpayer must sign and return the installment agreement (Form 990). The agreement requires a proposed payment amount that will be reviewed for approval by the Michigan Department of Treasury. All highlighted areas of the form are required and must be filled in completely before your request for an installment agreement will be considered for approval. Failure to complete the required areas will result in a delay of processing and expose the taxpayer to continued collection efforts.

For installment agreements longer than 48 months, the taxpayer must complete a Collection Information Statement, listing their income, expenses, assets and liabilities. Contact Collection Services Bureau to request the form and additional information at 517-636-5265.

Mail to:

Michigan Department of Treasury
Collection Services Bureau
P.O. Box 30199
Lansing, MI 48909

Installment agreements are subject to review and approval. Upon approval you will receive a confirmation letter indicating your monthly payment amount, the due date as well as pre-identified payment coupons to use for directing payments to the Collection Services Bureau. Payments must be made as proposed during the time that your installment agreement request is under review.

If your installment agreement is denied, you will receive instructions from the Collection Services Bureau on how to proceed.

Note: The Collection Services Bureau files liens on real and personal property to protect the State's interest as a creditor. Liens will be filed even when a taxpayer has made payment arrangements and is current with all payments.

Caution!
It is important that the tax liability is resolved as quickly as possible before filing a lien becomes necessary.

A tax lien:

  • will have a negative effect on your credit rating and in most cases, property (e.g. house, car) cannot be sold or transferred until the past-due tax is paid
  • is filed at a county Register of Deeds becomes a public record
  • is filed against an individual or business obtained by a credit reporting agency
  • will remain part of their credit history for the next seven to ten years

Payments will be applied to the taxpayer's liability at the discretion of the Michigan Department of Treasury.