Michigan Tax Amnesty And Tax Returns Guide And Instructons Page 36
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41prior year overpayment credited to your current year tax
Avoiding Penalty and Interest
estimates.
If you had business activity in Michigan in 2001 and your
Line 8. Amount Paid.
2001 tax is $20,000 or less, you can avoid paying penalty
and interest in 2002 by using your 2001 tax as the basis
Column A
Enter estimated payments made by the due
for your 2002 estimates. Divide your 2001 tax by 4, e.g.,
date for the first quarterly return.
$20,000 ÷ 4 = $5,000, and pay that amount on the 2002
Column B
Enter payments made after the due date in
quarterly due dates. You may also divide by 12 and pay
column A and by the due date in column
that amount with your monthly sales, use or withholding
B.
tax payment. If you had business activity in Michigan in
Column C
Enter payments made after the due date in
2001 but reported no tax liability or were not required to
column B and by the due date in column
file a 2001 return, you can still use your 2001 tax as the
C.
basis for filing your 2002 estimates. In this case, your
Column D
Enter payments made after the due date in
2001 tax liability would have been zero, so quarterly
column C and by the due date in column
payments would not be required for 2002.
D.
If your previous year was less than 12 months,
If quarterly payments are made after the due date,
annualize the previous year’s tax liability to determine if
penalty and interest will apply until the payment is
estimates are due and the amount due. See page 6 for
received. If less than full payment is made with a late
complete annualizing instructions.
filing, you will need to compute multiple penalty and
ANNUALIZATION WORKSHEET
interest calculations for each column. Attach a separate
You may use the annualization worksheet to determine
schedule if necessary.
the amount of estimates due when your income is not
Part 2, Figuring the Interest.
evenly distributed through the tax year.
Compute the interest due for both non-filing and
Each column represents a quarterly 3-month filing
underpayment of the required estimated tax in this
period.
section. Follow the instructions for each line, as the
The annualization worksheet essentially leads you
interest amount is different for each quarter.
through the steps required to calculate the actual single
Line 17. Enter the due date of your next quarter or the
business tax due for the tax year to date. The net tax
date the tax was paid, whichever is earlier. In column D,
liability is then annualized and multiplied by the
enter the earlier of the due date for your annual return or
percentage of estimates required for that quarter.
the date the tax was paid. An approved extension does
Line 16. Tax Rate. Refer to Important Information for
not change the due date of the annual return (column D)
2001 to determine the tax rate that applies to your tax
for this computation.
year end. The tax rate for a 12-month return ending
Part 3, Figuring the Penalty.
December 31, 2001 is 2.0 percent.
Compute the penalty for non-filing of the required
Line 30. Estimate Requirements by Quarter. The
estimated tax payments in this section. However, if you
totals for line 30, columns A, B, C, and D, must equal 85
made any estimated tax payments, or there was a credit
percent of the current year tax liability on page 1, line 3,
available from a prior quarterly return, do not compute
of Form C-8020.
the penalty on that quarter. Treasury will review the
estimates filed and, if necessary, bill you for the
appropriate penalty on the underpayment of estimates.
Attach this schedule to your return.
66
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