MICHIGAN DEPARTMENT OF TREASURY

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1 MICHIGAN DEPARTMENT OF TREASURY 2013

2 To explain the filing requirements Who must file a Michigan Income Tax Return (MI-1040) Give instructions and guidelines on how to complete the MI-1040 and other Michigan forms

3 Federal tax laws, rules, forms, etc are separate and distinct from each state s. Since state returns are built off federal information, taxpayers first fill out federal returns and then applicable state returns.

4 If you filed a nonresident alien federal return (1040NR or 1040NR-EZ) and you have Michigan income, you must file a Michigan income tax return. Nonresident aliens for federal tax purposes are nonresidents for Michigan tax purposes.

5 You are a nonresident of Michigan when your domicile is NOT in Michigan What is domicile? Permanent and principal home to which a person, wherever temporarily located, ALWAYS intends to return A person has only 1 domicile at a time

6 Nonresident CANNOT claim either: The Homestead Property Tax Credit (MI- 1040CR) OR The Home Heating Credit (MI-1040CR-7) A taxpayer must be a Michigan resident to claim these credits

7 If Adjusted Gross Income (AGI) is $3,950 0r Less, NO return is needed EXCEPT to claim a refund. If Adjusted Gross Income (AGI) is greater than $3,950: YES, you must file. Michigan allows you to claim the same number of exemptions as your federal return allows you to claim.

8 Tax Rate 4.25% Exemption Allowance $3, MI-1040 is due April 15, 2014 Statute of Limitations for Refunds Can claim refund for up to 4 years from the date the return was originally due

9 Gather*: U.S. 1040NR or U.S. 1040NR-EZ 1042-S W (Misc, Interest, etc) *This list is not exhaustive

10 Use the Adjusted Gross Income from your federal return on your state return: If you prepared a U.S. 1040NR Line 36 equals Line 10 of MI-1040 If you prepared a U.S. 1040NR-EZ Line 10 equals Line 10 of MI-1040

11 MI Michigan Individual Income Tax Return (all MI returns require this from) Schedule NR-Nonresident Schedule Schedule W -Withholding Tax Schedule Schedule 1-Additions & Subtractions

12 Schedule NR If you filed as a nonresident alien for federal tax purposes, include this for MI. Allocates income between Michigan and other states if necessary Prorates personal exemption allowance

13 Schedule W Report State of Michigan income tax withholding information on this form. *This information is typically obtained from your W-2 or 1099 form. No need to mail W-2 or 1099 form with MI return form.

14 Schedule 1 Additions & Subtractions Reports income to be added to or subtracted from federal AGI to determine Michigan taxable income Subtracts wages earned in other states Nonresidents can subtract scholarships and/or fellowships

15 For Nonresidents: Wages, salaries, commissions and other personal service income performed in Michigan Business income in Michigan Proceeds from the Michigan Lottery Michigan Casino & horse racing winnings

16 Common Federal Form 1042-S Code (Code 15) Scholarship used for tuition, fees, books & supplies is tax-exempt (Code 15) Scholarship used for room & board is taxable by IRS unless exempt by treaty State of MI does not tax either type of scholarship income to non residents.

17 Common Federal Form 1042-S Codes (Code 18) Money received for teaching or research is taxable unless exempt by treaty (Code 19) Money received as compensation during study and training is taxable unless exempt by treaty The state of Michigan taxes these types of income unless exempt by treaty.

18

19 Federal forms 1040NR and 1040NR-EZ cannot be e-filed Therefore, nonresidents cannot use the Fed-State e-file option.

20 STATE-ONLY E-FILE Filers who cannot e-file using the Fed-State option can use the State- Only e-file option.

21 STATE-ONLY E-FILE Software companies that support the State-Only e-file option are available on the MI Treasury website:

22 The Individual Income Tax Instruction Book has detailed instructions on how to complete and assemble paper returns for the state of Michigan. This booklet can be found on the Michigan Department of Treasury s website under Individual Income Tax Forms.

23 For refund, credit or zero returns, mail return to: Michigan Department of Treasury Lansing, MI 48956

24 If return and payment, mail to: Michigan Department of Treasury Lansing, MI If mailing payment after e-filing, mail form MI-1040-V & payment to: Michigan Department of Treasury PO Box Lansing, MI I

25 MICHIGAN INCOME TAX CUSTOMER CONTACT DIVISION Or

26 Are Michigan nonresidents required to file a return if they only have scholarship income? Although MI does not tax scholarship income, MI Department of Treasury recommends filing a return anyway in order to avoid unnecessary inquiries from the state. As a Michigan nonresident, can I file for the Property Tax/Renters Credit or the Home Heating Credit? No

27 Is there a contact number that international students and scholars may call for information? Use the general customer number Representatives may not give step-bystep instructions on how to fill out your specific return. If I am a resident for federal tax purposes, am I also a Michigan tax resident? Only if Michigan is your permanent home and you intend to return to MI each time you are absent. See MI-1040 instructions for details.

28 All nonresidents for federal tax purposes must file Form 8843, Statement for Exempt Individuals and Individuals With a Medical Condition, even if they did not receive US source income during the year, does Michigan have a similar requirement? No. Can a nonresident for federal tax purposes e-file Federal and State returns together? No. Nonresident federal returns cannot be e- filed; however, Michigan nonresident returns can be e-filed.

29 Is there a filing requirement if only income is from another state and Adjusted Gross Income (AGI) is more than $3,950? Not required to file MI income tax return. For a nonresident, you would consider only Michigan items included in federal AGI to determine if the filing of a return is required. However, someone who filed a federal return using an MI address, and did not file a MI return may receive a correspondence from MI inquiring why an MI return was not filed. For this reason, it may be beneficial to file an MI return to demonstrate that no tax is due.

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