Form 4924 - Withholding Certificate For Michigan Pension Or Annuity Payments Page 2
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2Form 4924, Page 2
Instructions for Completing MI W-4P,
Withholding Certificate for Michigan Pension or Annuity Payments
General Instructions
Line-by-Line Instructions
Significant income tax changes take effect for the 2012
Line 1: You may opt out of withholding tax from your pension
tax year. These changes may result in a balance due if
and annuity benefits if you believe you will not have a balance
the incorrect amount is withheld from pension or annuity
due on your MI-1040. If you (and your spouse) opt to have
no Michigan tax withheld from your pension or retirement
payment(s).
benefits by checking the box on line 1, it may result in a
There is no change in 2012 in the tax treatment of pension and
balance due on your MI-1040 as well as penalty and/or interest.
retirement benefits for taxpayers born before 1946. Recipients
If you check the box on line 1, do not complete lines 5 and 6.
born during the period 1946 through 1952 are eligible to
STOP HERE AND SIGN THE FORM.
deduct pension and retirement benefits up to $20,000 for
single taxpayers or married filing separate, or $40,000 if
Line 2: If you (or your spouse) were born prior to 1946, all
married filing a joint return.
benefits from public sources are exempt and benefits from
private sources may be subtracted up to for $47,309 for a
Recipients born after 1952 may not deduct pension and
single filer or married filer filing separately or $94,618 if
retirement benefits on the Michigan Income Tax Return (MI-
married filing a joint return for the 2012 tax year. In addition,
1040). For joint filers, the age of the oldest spouse determines
benefits that will be rolled into another qualified plan or IRA
the age category.
will not be taxable if the amount rolled over is not included
Multiple pensions: If you (and your spouse) receive multiple
in federal adjusted gross income (AGI). Any private pension
pension payments, your withholding on those payments may
payment in excess of the limits above is taxable.
not cover your entire tax liability. Married couples where each
Line 3: If you (or your spouse) were born during the period
spouse receives payments on their own pension may choose
1946 through 1952, the first $20,000 for single filers or
to have withholding calculated as if they were single on the
$40,000 for joint filers of all private and public pension and
MI W-4P and select one personal exemption in order to have
annuity benefits may be subtracted from Michigan taxable
sufficient withholding to cover their tax liability. Taxpayers
income.
Benefits in excess of these limits are taxable to
with multiple pensions may need to consult the MI-1040ES or
Michigan.
a tax advisor to ensure the proper amount is withheld or paid
in estimated income tax payments.
Line 4: If you (and your spouse) were born after 1952, all
private and public pension and annuity benefits are fully
Estimated Payments: There are penalties for not paying
taxable and may not be subtracted from Michigan taxable
enough state income tax during the year, either through
income.
withholding or estimated tax payments. Taxpayers who have
chosen not to have tax withheld from their pension or annuity
Line 5: Enter personal exemptions based on box checked on
payments may be required to make estimated tax payments.
lines 1-4. The total number of exemptions you claim on line 6
Refer to Form MI-1040ES for estimated tax requirements.
may not exceed the number of exemptions you are entitled to
claim when you file your MI-1040.
When should I complete this form? Complete Form MI
W-4P and give it to the administrator of your pension or
Line 6: You may designate additional withholding if you
annuity payments as soon as possible.
expect to owe more than the amount withheld. This amount
must be a percentage.
Your tax situation may change from year to year; you may
want to evaluate your withholding each year. You can change
NOTE: If you enter a number on line 5 and/or a percentage
the amount to be withheld by submitting an updated Form MI
on line 6, do not check box 1. If box 1 is checked and
W-4P to your pension or annuity administrator at any time.
line(s) 5 and/or 6 are completed, this will override line 1.
Failure to have sufficient tax withheld from your pension
Is every pension administrator required to withhold
and/or annuity payment(s) may result in a balance due
Michigan tax? Only companies over whom Michigan has
on your MI-1040 as well as penalty and/or interest.
taxing jurisdiction are required to withhold Michigan tax
from your pension and/or annuity payment(s). If your pension
administrator does not fall under Michigan jurisdiction, you
may request to have Michigan tax withheld, but the company
is not required to do so. If no taxes are withheld from your
payments, it is likely you will be required to make estimated
payments in place of the withholding. Contact your pension
and/or annuity administrator to verify if tax will be withheld
from your payments.
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