Michigan House OKs city, state income tax return extensions

Beth LeBlanc
The Detroit News
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The Michigan House voted Tuesday to pass three bills that will extend state and city income tax deadlines through May 17, codifying extensions that had already been issued by the state and its biggest cities. 

In March, the Michigan Department of Treasury extended the state individual income tax deadline from Thursday, April 15, to May 17. Many cities levying income taxes gave similar extensions.

The delay brought the state in line with a similar delay issued by the Internal Revenue Service due to the "unusual circumstances related to the pandemic."

In this April 13, 2014 file photo, the Internal Revenue Service Headquarters (IRS) building is seen in Washington.

The three bills passed nearly unanimously Tuesday through the House. They essentially codify the delays and provided automatic extensions for state and city income tax returns should the IRS decide an additional delay is needed. The bills were sponsored by Rep. Matt Hall, R-Marshall; Rep. Tenisha Yancey, D-Harper Woods; and Rep. Andrew Beeler, R-Port Huron. 

In a meeting last month, Hall called the bills a "belt and suspenders approach" to back up the deadline extensions issued by Gov. Gretchen Whitmer and cities across the state, and ensure that future IRS extensions trigger automatic corresponding delays for state and city income taxes.

"After the federal government moved the date, I've been doing everything I can to move the legislation as fast as I can," Hall said, noting that five-day layover rules in the House and Senate have delayed the bills. 

Under the legislation, most city income tax filers whose return was due Thursday received an extension through May 17; and someone whose city income tax was due April 30 wouldn't have to file until June 1. 

The legislation also allowed corporate income tax filers an extension from April 30 to June 1.

"Many families are now being forced, through no fault of their own, to deal with unemployment benefits, multiple jobs, and various federal stimulus payments, which all complicate the filing of tax returns,” Beeler said in a Tuesday statement. “Extending the city income tax filing deadline is a commonsense way to provide flexibility for Michigan taxpayers.”

The legislative relief won't be ready in time for city income tax filers in Detroit, where filers still are required to file by Thursday because the state was unable to grant an interim waiver of the late penalties.

The state has processed Detroit's income tax returns since the 2015 tax year, but the Department of Treasury said in a March bulletin that it was limited by law in granting a waiver of interest on late taxes.

As a result, late city income tax filers in Detroit will pay interest on taxes owed but their late penalties will be waived. Any interest accrued on any Detroit income tax deficiencies would likely be "nominal," the state Treasury said, and even that will eventually be waived.

"Any interest that accrues on a tax deficiency will be waived, canceled or refunded in accordance with any legislation that is enacted," the state bulletin said.


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