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State of Michigan Extends Deadlines For Income Tax Filings and Payments During COVID-19 Emergency

 

On March 10th, 2020, the State of Michigan identified the first two presumptive-positive cases of the novel coronavirus (COVID-19) in its borders.  That same day, Governor Gretchen Whitmer issued an executive order declaring a state of emergency based on her authority under Art. 5, Sec. 1 of the Michigan Constitution of 1963, the Emergency Management Act (MCL 30.401 through 30.421) and the Emergency Powers of the Governor Act (MCL 10.31 through 10.33).  “The governor shall, by executive order or proclamation, declare a state of emergency if he or she finds that an emergency has occurred or that the threat of an emergency exists.”  MCL 30.403(4).  “After making the proclamation or declaration, the governor may promulgate reasonable orders, rules, and regulations as he or she considers necessary to protect life and property or to bring the emergency situation within the affected area under control.”  MCL 10.31(1).  In addition, the Emergency Management Act provides a catch-all where the governor can “direct all other actions which are necessary and appropriate under the circumstances.”  MCL 30.405(1)(j). 

As a result of the COVID-19 crisis, the governor issued Executive Order 2020-26 to relax several deadlines on state and local taxes that would be due for tax year 2019.  This ensures that residents are observing the stay-at-home orders by not having to visit their tax preparer or accountant.  The extension of several deadlines by three months is consistent with the extension of the federal tax deadlines by the Internal Revenue Service.  These extensions include all of the following:

  • “An annual state income tax return otherwise due on April 15, 2020 will instead be due on July 15, 2020.”
  • “An annual state income tax return otherwise due on April 30, 2020 will instead be due on July 31, 2020.”
  • “A state income tax payment otherwise due on April 15, 2020 will instead be due on July 15, 2020.”
  • “A state income tax payment otherwise due on April 30, 2020 will instead be due on July 31, 2020.”
  • “The deadline for all taxpayers required to pay estimated state income taxes that would otherwise be due on April 15, 2020” is extended to July 15, 2020.
  • “Any applicable penalties and interest will not begin to accrue until July 16, 2020 for any remaining unpaid balances due on July 15, 2020, and will not begin to accrue until August 1, 2020 for any remaining unpaid balances due on July 31, 2020.”
  • Interest “will be added to a refund for amounts paid for tax year 2019 beginning 45 days after the claim for the refund is filed or 45 days after the date by which a return must be filed under [the extended deadlines], whichever is later. Additional interest… shall not apply to a 2019 income tax return for which the filing deadline was extended.”
  • “An annual city income tax return otherwise due on April 15, 2020, and any accompanying city income tax payment due with the return, will instead be due on July 15, 2020.”
  • “An annual city income tax return otherwise due on April 30, 2020, and any accompanying city income tax payment due with the return, will instead be due on July 31, 2020.”
  • “An estimated city income tax extension payment otherwise due on April 15, 2020 will instead be due on July 15, 2020.”
  • “An estimated city income tax extension payment otherwise due on April 30, 2020 will instead be due on July 31, 2020.”
  • “An estimated city income tax payment otherwise due on April 15, 2020 will instead be due on July 15, 2020.”
  • “An estimated city income tax payment otherwise due on April 30, 2020 will instead be due on July 31, 2020.”
  • Regarding any failure to file a city income tax return or any failure to pay city income taxes consistent with the extensions, “[a]ny applicable penalties and interest will not begin to accrue until July 16, 2020 for any remaining unpaid balances due on July 15, 2020, and will not begin to accrue until August 1, 2020 for any remaining unpaid balances due on July 31, 2020.”
  • Regarding city income taxes, interest “will be added to a refund for an overpayment of taxes for tax year 2019 beginning 45 days after the claim for the refund is filed or 45 days after the date by which a return must be filed under [the extended deadlines], whichever is later.”
  • All of these extensions are automatic and the taxpayer does not have to file any forms with the Michigan Department of Treasury or the local taxing authority to qualify.

This deadline extension applies to all taxpayers including individuals, trusts, estates, corporations, pass-through entities and self-employed individuals.  However, Executive Order 2020-26 does not affect any of the following:

  • Any penalties and interest for unpaid taxes that were NOT due on April 15, 2020 or April 30, 2020 (e.g. unpaid taxes from tax year 2018) will continue to accrue.
  • The executive order extends the deadline for paying Quarter 1 estimated taxes from April 15, 2020 to July 15, 2020, but does NOT affect the deadline for paying Quarter 2 estimated taxes by June 15, 2020.
  • The executive order does not apply to any withholding taxes.

Despite the extended deadlines, taxpayers who are entitled to a refund will receive it earlier if they file their taxes earlier.  If you need to get your Michigan tax returns filed right away, the tax professionals at Kershaw, Vititoe & Jedinak PLC can help.  Our tax attorneys are available to assist you during the current COVID-19 state of emergency to get you results quickly.  If you have questions about Executive Order 2020-26 or any other aspect of Michigan law, then do not hesitate to contact our office today for assistance.

 

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