Instructions For Form Mi-2210 - Underpayment Of Estimated Income Tax

2006 MI-2210, Page 4

FISCAL-YEAR FILERS: Change due dates and interest

for any payment period was not paid off with one payment,

rates to correspond with your tax year.

you may need to do several calculations in each column.

PART 1: FIGURING THE UNDERPAYMENT

Example: Your tax due each period is $2,000. You have

an underpayment of $1,000 for the first period (due

Line 5: Figure your 2005 tax from your 2005 return. On

April 15). On June 10 you send $2,000 to pay the second

the MI-1040 form, subtract the sum of lines 33, 34 and 35

installment. But, $1,000 of this payment goes toward your

from line 28 and enter here. This amount must equal at

$1,000 underpayment first. Interest is computed on $1,000

least 100 percent of the tax shown on your 2005 tax

from April 15 to June 10 (56 days). The remaining $1,000

return, or 110 percent of the tax shown on your 2005

is applied to your second installment payment, creating a

return if AGI was $150,000 or more for joint or single

second period underpayment of $1,000.

filers or $75,000 or more for married filing separately.

Fiduciaries, enter the amount from MI-1041, line 22.

Interest will continue to accrue on this $1,000 until another

payment is received.

Line 6: Figure your 2006 tax. On the MI-1040 form,

subtract the total of lines 34, 35, 36 and 37 from line 28

Interest rates are set by Treasury twice each year for six-

and enter here. Fiduciaries, enter the amount from MI-

month periods starting January 1 and July 1. The rate is

1041, line 22.

1 percent above the prime rate in Michigan. For example,

if the Michigan prime rate is 10.2 percent, your interest

Line 10: If you did not receive your income evenly

rate for completing the MI-2210 is 11.2 percent for that

throughout the year, you may annualize your income. See

six-month period. For current interest rates, visit our Web

the instructions and worksheet on this form.

site at for a copy of Revenue

Line 11: Enter the estimated tax payments you made plus

Administrative Bulletin 2006-4.

any withholding. Note the following:

PART 3: FIGURING THE PENALTY

• One-fourth of your total withholding is considered paid

Penalty is 25 percent of the tax due (minimum $25), for

on each due date unless you can document the dates the

failing to file estimated payments or 10 percent (minimum

tax was withheld.

$10) for failing to pay enough with your estimates or paying

• An overpayment from 2005 that has been credited

late.

forward to 2006 will be applied to the first installment.

Line 24: The underpayment for the penalty charge is

• Do not enter extension payments on this form.

figured the same way as the underpayment for interest.

In column A, enter the estimated tax payments made by

Exceptions:

April 17, 2006, that were for the 2006 tax year. In column B,

• Payments are applied in the quarter they are received.

enter payments made after April 17 and through June 15,

2006. In column C, enter payments made after June 15

• If an overpayment occurs in any quarter, the

and through September 15, 2006. In column D, enter

overpayment amount is carried forward to the next

payments made after September 15, 2006, and through

quarter and applied as a timely payment.

January 16, 2007. Extension payments or other payments

• Payments are not carried back to offset underpayments

received after January 16 are not considered estimated tax

in previous quarters.

payments for tax year 2006.

The amount on line 24 cannot be less than zero (0).

PART 2: FIGURING THE INTEREST

Line 25: Enter 25 percent if estimated tax payments were

The MI-2210 computes interest to April 17, 2007, or the

not made for 2006. Enter 10 percent if estimated tax

date of payment, whichever is earlier. This part of the

payments were made for 2006.

form breaks down underpayments to the payment period

Example: In the example in Part 2, the $2,000 payment

they are due, then gives the interest rate for that period.

received on June 10 is applied to the $2,000 required

Interest is figured for the number of days the installment

payment in the second quarter. The penalty in the first

remained unpaid. All payments are applied to any

quarter is $100 (10 percent of the $1,000 underpayment in

underpayment first, regardless of when the payment is

the first quarter). The penalty in the second quarter would

received. The balance (if any) is applied to the next period.

be zero (0).

Note: Complete lines 11-23 for column A before going to

column B, etc. You need only complete each column to

the date the payment was made. If the total underpayment

Instructions For Form Mi-2210 - Underpayment Of Estimated Income Tax - 2006 Page 2

Related Articles

Related forms

Related Categories