Michigan Sales, Use and Withholding Taxes E-File Software Developer Guide Michigan Department of Treasury

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1 Michigan Department of Treasury 5164 (09-16) Michigan Sales, Use and Withholding Taxes E-File Software Developer Guide Michigan Department of Treasury

2 Table of Contents Introduction E-File Requirements... 3 Changes for Tax Years Tax Year Tax Year Tax Year Contact Information... 5 Acceptance and Participation... 5 Developer Responsibilities Software Requirements Timeliness of Filing Software Developer Testing and Approval... 7 Miscellaneous... 8 Acknowledgment System... 8 General Information SUW E-File Calendar Signature Requirements Payment Methods Data Requirements Type of Filing Accepted Forms and Schedules Supported

3 8.7. Attachments Supported Exclusions from E-File Schema and Transmission Specifications Header Data ReturnHeader.xsd BusinessReturnHeaderState.xsd Packaging Guidelines

4 Introduction Thank you for your interest in the Michigan Department of Treasury s (Treasury) Sales, Use and Withholding (SUW) Electronic Filing (e-file) Program. Michigan s e-file program is a cooperative effort with the State Tax E-Standards Group (E-Standards) accepting SUW returns with or without payments (submissions) using the State Gateway Service V2.0. The transmission method is a Web Service using Simple Object Access Protocol (SOAP) with attachment messaging. The data is formatted using extensible Markup Language (XML). Software developers can submit submissions through the Michigan Taxes Gateway (Gateway) for state processing. Multiple submissions may be contained in a single message payload. Software developers must test with Treasury and receive approval prior to submitting live submissions E-File Requirements Michigan does not have an enforced e-file mandate for SUW. Software developers producing SUW tax preparation software and computer-generated forms do not have to support e-file for all eligible Michigan forms that are included in their software package, but are strongly encouraged to do so. Large Taxpayers who use proprietary software to prepare and file their own SUW tax returns and Payroll Service Providers (PSPs) are treated as a software developer. Note: The Fuel Supplier and Wholesaler Prepaid Sales Tax Schedule (Form 5083), Fuel Retailer Supplemental Schedule (Form 5085) and Vehicle Dealer Supplemental Schedule (Form 5086) are not eligible to be filed by paper; they must be e-filed Tax Year 2015 SUW Forms Changes for Tax Years All SUW forms have been redesigned for Tax Year E-File SUW returns with or without payments are now eligible for e-file beginning with Tax Year

5 Electronic Payments Payments will be allowed with e-filed SUW returns using the Standards approved Financial Transaction schema. W-2 Reporting UPDATED 9/19/16: The file should be in the Social Security Administration (SSA) EFW2 text file format. It will be included in the inner zip of the Sales, Use and Withholding (SUW) annual return submission. Treasury expects to receive only one file that includes both State and Local information. See the Transmittal for Magnetic Media Reporting of W-2s, W-2Gs and 1099s to the State of Michigan (Form 447) for record layout specifications and the Michigan E-File Transmitter Guide for Direct Taxes (Publication 5167) for information on submitting the file electronically with the SUW annual return. END UPDATE 2.2. Tax Year 2016 No updates Tax Year 2017 No updates. Contact Information Michigan E-file Web site E-File Coordinator Program Area, Testing and File Specifications Scott Bunnell Heather Vellanti Erica Smith Telephone ext. 5 Michigan Relay Service Michigan Treasury Web Sites (TTY only) 4

6 The contact information above is for software developers, transmitters and preparers only. Please do not give this information to taxpayers. Forms, Documentation and E-file Services (FDES) staff is unable to provide submissions status information or address specific taxpayer account issues once the submission has been acknowledged as Accepted by Treasury. Treasury does not recommend sending account-specific information over the Internet. Federal and State disclosure laws require that taxpayer privacy and their confidential records are protected. Therefore, Treasury will not send account-specific information over the Internet in response to an inquiry. Acceptance and Participation Software developers must complete and submit a Michigan Letter of Intent to Participate in E-file and Substitute Forms Programs (Form 4430). Applications may be submitted at any time throughout the year. A software developer s participation in Michigan s e-file program indicates their agreement to follow all requirements outlined on the Form 4430 and in Section 5.1 of this publication. Violation of these terms could result in the software company being prevented from participation in the early release and approval of tax forms and/or rejection of Michigan tax forms (electronic and/or paper) created by the company. If after acceptance, a software developer has ongoing production problems, Treasury reserves the right to suspend that software developer until the problems are resolved to Treasury s satisfaction. Developer Responsibilities Software developers should use the guidelines provided in this publication along with the XML schema published electronically on Michigan s secure Web site for software developers ( in order to develop software for preparing and transmitting SUW returns with or without payments. All authorized e-file providers must be diligent in recognizing and preventing fraud and abuse in the e-file program. Providers with problems involving fraud and abuse may be suspended or expelled from participation in Michigan s e-file program, be assessed civil and preparer penalties, or be subject to legal action. 5

7 5.1. Software Requirements Compute Michigan returns, credit forms and schedules according to statutory requirements and department return preparation instructions. Successfully pass e-file and substitute form testing. Produce forms in both paper and electronic formats as specified by Treasury and as supported by the software. Users of the software must have the ability to print a copy of their return for their records. When utilizing the Financial Transaction schema, a state tax return is required. Provide data validation, verification, and error detection prior to transmission of submissions to Treasury to mitigate e-file errors. Submit returns and retrieve acknowledgments through the Gateway. See Publication 5167 for details. Inform the taxpayer when the acknowledgment is received. If the submission is accepted, the transmitter must notify the taxpayer of the date the submissions was accepted for processing. If the submission is rejected, the transmitter must notify the taxpayer the submission was not accepted for processing, date of the rejection, reason for the rejection, and instruction on how to retransmit the submission. Draft SUW forms are made available to help software developers understand field location and test data, and should not be used as draft forms in designing software to print the forms. Refer to the following instruction booklets and publications for tables, worksheets, and related information that will be of assistance when developing the software program. Form/Pub. Title 5080 Sales, Use and Withholding Taxes Monthly/Quarterly Return 5081 Sales, Use and Withholding Taxes Annual Return 5082 Sales, Use and Withholding Taxes Amended Annual Return 5083 Fuel Supplier and Wholesaler Prepaid Sales Tax Schedule 5085 Fuel Retailer Supplemental Schedule 5086 Vehicle Dealer Supplemental Schedule 5092 Sales, Use and Withholding Taxes Amended Monthly/Quarterly Return 5095 Sales, Use and Withholding Taxes Monthly/Quarterly and Amended Monthly/Quarterly Worksheet Pub Sales, Use and Withholding Taxes E-File Software Developer Guide 6

8 Form/Pub. Pub Pub Title Sales, Use and Withholding Taxes E-File Tax Preparer Handbook Michigan E-File Transmitter Guide for Direct Taxes 5.2. Timeliness of Filing Returns and/or payments not acknowledged by Treasury as Accepted are not considered filed. After an electronic submission is acknowledged as accepted, it cannot be recalled, intercepted, or changed in any manner. If either the ERO or taxpayer wishes to change any entries on an accepted e-filed return, Forms 5082 and/or 5092 and additional payment (if applicable) must be filed. ACH Debit payments will be allowed with e-filed SUW returns using the E-Standards approved Financial Transaction schema. For timely payment, the return with payment must be accepted by Treasury one business day prior to the due date. If the due date falls on a weekend, state holiday, or banking holiday, the due date is the next business day. More information on due dates can be found on the Sales, Use and Withholding Tax Due Dates for Holidays and Weekends (Form 3149). Payments may be scheduled up to 90 days in advance of the settlement date. Please note when requesting a future settlement date do not request a date that is a weekend, state holiday, or banking holiday, as the payment will be considered late Software Developer Testing and Approval E-File Testing Test Returns Number of Scenarios Electronic Record Specifications Required for all software developers Michigan test scenarios 8 (based on tax type) XML format Using the Developer Guide along with the Michigan SUW e-file Test Package (Publication 5165), and Michigan Sales, Use and Withholding Taxes E-File Transmitter Guide (Publication 5167) the software developer must successfully test their program with Treasury to become approved to create and transmit Michigan SUW e-file submissions. To become approved, the software developer must transmit test returns to Treasury via the Gateway. Once the tests are approved, the software developer is notified and if requested, 7

9 the company s name is posted on Treasury s Web site noting the software has been tested and approved. Test returns must be correctly prepared and computed before transmission. Treasury requires that each submission be run against a validating parser prior to transmission. Pre-validation is intended to identify potential error conditions and minimize the chance of receiving errors. A parser compares the XML document to the defined elements and attributes of the schemas to ensure that a well-formed document is received. The purpose of testing prior to live processing is to ensure that: Treasury can receive and process the electronic submissions Developers are successful in retrieving acknowledgments Returns have fewer validation and math errors Developers use the correct format and e-file specifications Filers understand and are familiar with the mechanics of e-file The Michigan test package is published on Treasury s secure Web site for software developers. Visit and select Tax Professionals, then, Software Developers for more information. RESERVED Miscellaneous Acknowledgment System Treasury provides electronic acknowledgments for all e-filed submissions using the Gateway. The first notification is generated through the Web service (SendSubmissionsResponse) in the form of a SubmissionReceipt for each submission in the transmission. Once a submission receives a successful receipt, Treasury will generate an acknowledgement for all submissions received in the transmission. The acknowledgement.xsd will be posted in the MISUW20YYvX.x zip package. The acknowledgement for the Michigan submission will be available within three business days after successful transmission. 8

10 General Information 8.1. SUW E-File Calendar Tax Year 2017 Begin Software Testing November 4, 2016 End Software Testing March 31, 2017 Begin Transmitting Production Submissions January 16, 2017 Electronic Return Acceptance Period Current tax year (2017) and two prior (2015 and 2016) 8.2. Signature Requirements Electronic Signature: Treasury accepts the agreement that Payroll Service Providers (PSPs) and paid preparers have with their clients as the signature for e-filing SUW returns and/or payments. The agreement may be a limited power of attorney, IRS Reporting Agent Authorization (Form 8655), or company document that mirrors the same type of e-filing authorization. Treasury does not require any additional signature documentation. The authorization document must not be submitted unless requested by Treasury. Treasury recommends the authorization document be retained in the taxpayer s records for six years Payment Methods Financial Transaction Schema ACH Debit payments will be allowed with e-filed SUW returns using the E-Standards approved Financial Transaction schema. If no tax is due, do not send a zero payment. Zero payments are not required when no tax is due and will not be recognized by Treasury as a valid payment. 9

11 Form 5094 If tax is due on an e-filed return, the taxpayer may submit payment by check or money order by the due date, with Form Data Requirements Send data elements only when applicable to the return being filed. The exception is for required data elements such as numeric fields where Treasury requires an entry even if it is a zero. Software developers should apply the data element restrictions documented in the schema to the corresponding data elements in their software. Annotations are provided for all line items to help in the development process, and to provide additional information when a submission is rejected. Transmission Specifications are found in Publication Type of Filing Accepted SUW allows the flexibility to file a combined Sales Tax, Use Tax and Withholding Tax return, in one filing or to file them separately. Example: If a taxpayer is registered for Sales, Use and Withholding taxes, but only intends to file their Sales and Use tax return, the taxpayer would only complete the Sales and Use sections of the form. The Withholding tax return may be submitted later, with only the Withholding section completed. If your company does not support the combined filing of Sales, Use and Withholding taxes, only complete the applicable tax section(s); do not enter zeroes in sections you do not support. 10

12 8.6. Forms and Schedules Supported Form Title 5080 Sales, Use and Withholding Taxes Monthly/Quarterly Return 5081 Sales, Use and Withholding Taxes Annual Return 5082 Sales, Use and Withholding Taxes Amended Annual Return 5083* Fuel Supplier and Wholesaler Prepaid Sales Tax Schedule 5085* Fuel Retailer Supplemental Schedule 5086* Vehicle Dealer Supplemental Schedule 5092 Sales, Use and Withholding Taxes Amended Monthly/Quarterly Return 5094 Sales, Use and Withholding Payment Voucher 5095 Sales, Use and Withholding Taxes Monthly/Quarterly and Amended Monthly/Quarterly Worksheet 8.7. Attachments Supported Treasury only accepts the EFW2.txt as an attachment Exclusions from E-File Taxpayers are not eligible for SUW bulk e-file if Forms 5083, 5085 and/or 5086 need to be submitted with Forms 5081 or The taxpayer must file using MTO. Taxpayers are not eligible for SUW bulk e-file if a negative needs to be reported on lines 2a and/or 2b on Forms 5080 or The taxpayer must file using MTO. Schema and Transmission Specifications Michigan s form-based schemas and instance documents are available on the software developer secure Web site at Schemas provide the basic definition for the elements (what is required, field length, data type, etc.). Data integrity depends on each data element complying with the data format specifications. Michigan verifies the data by validating each submission in the transmission against the schemas. If a data format error is encountered the submission is rejected. The following sub sections provide guidance on Michigan data that should be included in the schemas. 11

13 9.1. Header Data ReturnHeader.xsd Element OriginatorTypeCd Value ERO = Preparer Package OnlineFiler = Online Software Package LargeTaxpayer = Large Taxpayer SoftwareID Must be the same as the Developer ID submitted on Form TaxYear 2015, 2016, BusinessReturnHeaderState.xsd Element TypeSubmission Value Must match value of ReturnType in the BusinessReturnHeaderState: Form5080 Form5081 Form5082 Form5092 EIN Required. If no federal EIN enter StateEIN Required. Must comply with format of: [0-9]{9} TR[0-9]{7} ME[0-9]{7} 9.2. Packaging Guidelines See Publication 5167 for message layout and technical specifications. 12

2017 Michigan Essential Services Assessment (ESA) Modernized E-file (MeF) Software Developer Guide

Michigan Department of Treasury 5382 (12-2016) Draft 2017 Michigan Essential Services Assessment (ESA) Modernized E-file (MeF) Software Developer Guide Michigan Department of Treasury www.mifastfile.org