LANSING, Mich — The Michigan Department of Treasury announced Wednesday that Michiganders who collected state unemployment benefits last year will not be required to pay penalty and interest related to underpaid estimated tax payments.
Under state law, taxpayers are required to pay quarterly estimated tax payments when the annual tax due is expected to exceed $500. Taxpayers who fail to pay an estimated quarterly tax payment are typically subject to penalties and interest.
However, effective immediately, the state Treasury Department has granted an automatic waiver of all penalties and interest related to underpaid estimated tax payment owed by those who received unemployment benefits in 2020. All taxpayers who received unemployment during the 2020 tax year will automatically receive the waiver.
“Unemployment benefits have been a lifeline for many families during this pandemic, helping them put food on the table and pay the bills,” Gov. Gretchen Whitmer said. “Some Michiganders could have faced income tax penalties on their unemployment benefits, and I’m glad we can take prompt action to provide much needed relief for Michigan households.”
Because the waiver is automatic, taxpayers don’t need to contact the state Treasury Department or provide additional documentation for a waiver to be applied.
“This is the right thing to do,” State Treasurer Rachael Eubanks said. “COVID has disrupted our lives in numerous ways – and many Michiganders are depending on unemployment benefits to get them by during this extraordinary time. Having to pay penalties and interest on unemployment benefits is the last thing individuals should be worried about when they go to pay their taxes.”
Michigan will begin processing state individual income tax returns on Feb. 12. Additional details related to the waiver can be found here.
Related video:
►Make it easy to keep up to date with more stories like this. Download the 13 ON YOUR SIDE app now.
Have a news tip? Email news@13onyourside.com, visit our Facebook page or Twitter. Subscribe to our YouTube channel.
