Thursday, August 4, 2022

How To File Unemployment Taxes In Michigan

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Michigan Unemployment 2021 Tax Form Coming Even As Benefit Waivers Linger

Unemployment tax forms will be delayed until end of February, UIA says

Michigan unemployment officials say 1.2 million residents about 25 percent of the states labor force should receive a 1099 tax form by the end of February, a month late, so they can file annual income taxes.

But even as workers await the document, the state has yet to decide whether thousands of jobless workers will have to repay up to $5.7 billion in unemployment benefits the state says it paid in error during the pandemic.

That could leave some taxpayers saddled with reportable income on 2021 federal and state taxes that they may later have to return to the state.

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Some question how many residents may face garnishment of their wages or tax refunds if they are later ordered to repay overpayments, even if they obtained benefits in good faith and requested a repayment waiver.

If I were somebody who collected benefits in 2021 I would be very upset and very confused, said David Blanchard, an Ann Arbor attorney who has filed a class-action lawsuit against the Unemployment Insurance Agency for changing benefit eligibility rules a year after payments were made.

The state thinks you owe it back, but you have to record it on your taxes as money received, he said. And then it might be waived, too.

UIA received a federal extension in January, allowing it to delay distribution of 1099-G forms which report income received from a government entity for one month.

Documents And Information Needed During Filing

When filing for unemployment using the MiWam system, you should have the following information easily available before you begin:

  • Contact information and names of your employers over the last 18 months
  • The beginning and ending dates of each job
  • Total earnings from each employer over that 18-month period
  • Gross wages for the week that you are beginning your claim
  • Driver’s license, state ID, voter registration number, military ID, or other forms that verify your identity – you only need one of these
  • Telephone number
  • Any union membership information, if applicable
  • Alien Registration Numbers and worker’s permit expiration dates, if you are a non-U.S. citizen
  • Appropriate military tax forms if you served during your working period
  • W-2 or pay stub information if you are a federal employee

Although much of this information will be automatically on the MiWam system, this isn’t always the case. For example, your last employer may not have registered your position or reported you as an employee. As a result, it is worth having this information available to avoid unnecessary delays in obtaining benefits.

Note: All sources of income must be reported, including tips and cash received for any side jobs outside of your position. For example, if you prepare taxes for extra cash at the beginning of the year, this money must be reported.

How To Calculate And Pay State Unemployment Tax

by Ryan Lasker | Published on May 18, 2022

When a business finds itself in a financial bind, sometimes layoffs feel like the only option.

Unemployment benefit programs step in when employees are let go for reasons outside of their control. Employers pay unemployment tax to their state and the federal government so employees have a softer landing if theyre laid off.

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I Received Unemployment Which Form Should I Look For

People who received unemployment benefits last year should receive tax form 1099-G, also called Certain Government Payments. If you didnt get one, you can download a duplicate form on your Michigan Web Account Manager, or MiWAM, account or call customer service at 866-500-0017.

Be careful if you received a 1099-G form, but did not receive unemployment last year, that could be a sign of identity theft. The Unemployment Insurance Agency said people who believe they are victims of such identity theft should report it at Michigan.gov/uia.

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How And When To Pay Your Unemployment Taxes

  • How and When To Pay Your Unemployment Taxes
  • Employers are required to file Employers Quarterly Wage/Tax Reports listing their employees and the wages earned for each quarter. A quarterly report must be filed even if you do not have any employees and/or wages to report for the quarter. Quarterly reports are due: First Quarter – April 25, Second Quarter – July 25, Third Quarter – October 25 and Fourth Quarter – January 25. Reports and payments not timely submitted will result in penalty and interest being applied to the account.

    Employers Wage/Tax Reports must be filed online through your MIWAM account.

    For step by step instructions on how to use MiWAM, including how to file your Employers Quarterly Wage/Tax Report or make a payment, view the MiWAM Toolkit for employers with www.michigan.gov/uia.

    Setting Up With Payroll Process

    You can perform your own payroll, which is the most time-consuming alternative and has the largest risk of a payroll error.

    • Create a payroll template in Excel. Although using a template is still a manual procedure , it does provide you with more structure, which will help you avoid frequent payroll mistakes.
    • Enroll in a payroll service. We strongly advise using a payroll provider because it is the quickest of all processes. It also provides you with a support system to turn to if you require more assistance.

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    How To File Taxes After Receiving Unemployment Benefits

    How can you figure out how much you owe after receiving unemployment benefits? The solution is to prepare your taxes for filing as early as possible so that you can estimate what your tax bill will be.

    If you received unemployment compensation, you should receive Form 1099-G from your state. This shows the amount you were paid and any federal income tax you chose to have withheld.

    First, if you’re filing by using tax software or using a tax preparation service, it’s easy. The software package will ask you if you received unemployment benefits this year, and if you say yes, it will ask you for numbers directly from your 1099-G form. Your tax preparer will ask you for a copy of your 1099-G. In either case, this is easily handled.

  • You’ll fill out Form 1040 as usual, following the provided instructions.
  • You will also have to fill out Schedule 1, which provides details on additional income like your unemployment income.
  • You simply enter your unemployment compensation on line 7 of Schedule 1, and you find that number on Box 1 of your 1099-G form that you received in the mail.
  • Finish filling out Schedule 1.
  • Then, when you finish filling out your 1040, you take the number on line 22 of Schedule 1 and put that number on line 10a of your 1040. Then, just finish filling out your 1040 as normal.
  • What if you had tax withheld from your unemployment check?

  • The amount of tax that has been withheld for you appears on box 4 on your 1099-G form.
  • Unemployment Application And Initial Claim Process

    Money Minute: Unemployment and tax forms

    File Your Unemployment Application and Initial Claim Process

    When you want to file a new claim at Michigan Works!, you need to use the MiWam system to create the application. This is a UIA-run site that includes an online unemployment application. Start the process by clicking on “File a New Claim” under the heading “Online Services for CLAIMANTS” at https://miwam.unemployment.state.mi.us/mip/webdoc/_/.

    From there, you need to provide the necessary identification information, indicate your employment information, and follow each step to create a claim. You will need a variety of information about your past position, including your hiring date, wages, and why you were let go.

    Wages can be entered on an hourly or yearly basis, while you can select from a variety of reasons for losing your job including “fired” and “laid off.” You can then go more in-depth with these reasons to ensure you receive your benefits.

    You can keep track of your benefits by signing into your MiWam account. This helps you keep track of your benefit amount, the weeks left in your unemployment, and any other important updates that may impact your benefits. You can also change your payment method from direct deposit to debit card and vice versa.

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    Information Youll Need To Submit Your Unemployment Claim

    To successfully complete your unemployment benefits application, youll need to have several documents that act as proof for your claim.

    • Social Security number.
    • Names and addresses of all previous employers during the last 18 months.
    • Pay stubs that show your quarterly earnings.
    • The last date you were employed.
    • The reason you have become unemployed be sure this reason matches your employers reason, as processors will verify your claim with your previous employer.
    • Personal identification number from any previous Michigan unemployment claims.
    • If you are not a US citizen, youll need your Alien Registration Number and expiration date for work authorization.

    Be sure to gather this information first before beginning the application process. You can also read our guide on the unemployment application process for more tips.

    After filing for unemployment benefits, the UIA will contact you by mail regarding your benefits. They will explain if your claim has been accepted or denied . If accepted, the information packet will show how large your weekly benefit check will be and how often you can receive unemployment payments. This information will also include information on what you must do to continue receiving benefits.

    Que : What Are The Payroll Taxes In Michigan

    Ans: The Michigan Department of Treasury is in charge of state payroll taxes.

    • Michigan Income Taxes: Michigan has a flat income tax rate of 4.25%.
    • Michigan Local City Payroll Taxes: The following Michigan cities levy a local income tax of 1% on resident employees and 0.5% on nonresident employees : Albion, Battle Creek, Benton Harbor, Big Rapids, East Lansing, Flint, Grayling, Hamtramck, Hudson, Ionia, Jackson, Lansing, Lapeer, Muskegon, Muskegon Heights, Pontiac, Port Huron, Portland, Springfield, and Walker. Residents and nonresidents who work in Detroit, Grand Rapids, Highland Park, and Saginaw pay the following local taxes:
    • Detroit 2.4% R, 1.2% NR
    • Grand Rapids 1.5% R, 0.75% NR
    • Highland Park 2% R, 1% NR
    • Saginaw 1.5% R, 0.75% NR

    Employer Contributions to Unemployment Insurance : Employer contributions to unemployment insurance range from 0.06 percent to 10.3 percent.

    Furthermore, employers who are new to the market pay a flat charge of 2.7 percent. Employers in the new construction industry pay a flat rate of 8.2 percent.

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    Register With The Michigan State

    State Registration: Complete Form 518 and send it or submit it online to the Michigan Department of Treasury. Use the Michigan Business Tax Registration Guide, which also includes Form 518, if you need help.

    The Liability Questionnaire and the Successorship Questionnaire must be completed by all employers.

    Local Registration: Michigan is one of 17 states that mandate local taxes to be paid. Each time you need to register for a business or pay taxes in one of the following 24 cities: Albion, Battle Creek, Benton Harbor, Big Rapids, East Lansing, Flint, Grayling, Hamtramck, Hudson, Ionia, Jackson, Lansing, Lapeer, Muskegon, Muskegon Heights, Pontiac, Port Huron, Portland, Springfield, Walker, Detroit, Grand Rapids, Highland Park, and Saginaw, contact the local city office.

    If any of the following applies to you in these locations, you must register:

    • You recruit someone new, or one of your current employees leaves
    • You’ve moved your office to a new location
    • In a new location, you conduct business

    Please keep in mind that any local legal changes in the 24 municipalities will require you to stay current.

    Stimulus Payments And Taxes

    Michigan Unemployment Phone Number And Hours

    People are receiving stimulus payments under the CARES act, according to which 13 weeks of additional unemployment benefits are granted making it a total of 39 weeks in most states. These stimulus payments are not considered as taxable but a refundable credit of your income tax return. Therefore, this income will not be taxed at the year end. It will be considered as a tax credit when you will file your next tax return.

    This $2 trillion emergency relief package is the largest in American history, where the government has decided to pay an additional $1200 cash payment to each American who qualifies for the criteria as well as some extra amount to children and married couples. 159 million stimulus checks have been sent by the IRS so far.

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    Michigan Withholding Account Number And Filing Frequency

    • If you are a new business, register online with the Michigan Department of Treasury. This number will match your Federal EIN and your application will be processed within 5-10 minutes.

    • If you are already registered with the Michigan Department of Treasury, you can find your Michigan Withholding Account Number and Filing Frequency online or by contacting the Michigan Department of Treasury at 517-636-6925.

    What If Ive Already Filed

    Michigan taxpayers who have already filed their 2020 tax returns and did not take the unemployment compensation exclusion on their federal return should pause before updating their Michigan returns. The Internal Revenue Service has confirmed it will recalculate taxpayers taxes without the need for amended returns to take the exclusion. However, the Department of Treasury is awaiting confirmation from the IRS to confirm if the Treasury can make a similar calculation for state-level taxes. This determination would remove the need to file an amended state return. Until this decision has been made, taxpayers should not file amended Michigan returns.

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    File For Unemployment In Michigan

    In Michigan, unemployment offices are known as UIA Problem Resolution Offices. They are designed to sort out concerns you may have about unemployment. You can also file for unemployment benefits here and staff will help you through the process. While not complex, it does require following a number of steps to avoid mistakes that may delay or wrongly deny you benefits.

    These offices are scattered across the state and are known under the official name of Michigan Works! These offices have a variety of benefits, including:

    • Telephone and computers for filing your claim
    • Staff members that are willing to help you file properly
    • Employment meetings that can educate you on important tips, such as properly filling out resumes
    • Meet-and-greet sessions with potential employers
    • Access to an online work community that presents a variety of jobs and careers to which you can apply

    The hours of these offices vary, but are generally between the hours of 8 a.m. to 4 p.m. They are closed on all state and federal holidays, including New Year’s Day, Martin Luther King Jr. Day, President’s Day, Memorial Day, the Fourth Of July, Labor Day, Thanksgiving, Christmas, and others.

    Here are the locations of several prominent Michigan Works! offices:

    • Alpena – 315 West Chisholm

    How Much Of A Hit Will Michigan’s Budget Take

    TAX TIPS: How unemployment benefits can impact filing for 2021

    State budget officials braced when the pandemic hit last year, preparing for a drastic decline in state revenues because of the related economic downturn. Although some businesses shuttered for months and unemployment skyrocketed, budget officials’ fears haven’t fully materialized.

    Increased unemployment benefits helped soften the blow, economists said in January. Consumer and retail spending increased, which increased sales tax revenue. The benefits themselves are taxed, too.

    The amount of income taxes withheld from unemployment revenues spiked to $557 million in the 2020 fiscal year, which ended Sept. 30. That’s four times the amount withheld in the 2009 or 2010, the worst of the Great Recession years, according to information presented at the January Consensus Revenue Estimating Conference.

    The increase in withholdings speaks to the increase in unemployment last year. It doesn’t appear to be slowing down $32 million in unemployment benefits were withheld in the first two months of the 2021 fiscal year, more than in any full year since 2014.

    Not everyone withholds income tax from their unemployment checks, so the actual amount of income tax collected on jobless benefits “is likely significantly higher,” Leix said in an email.

    Correction: This story has been updated to remove incorrect information about Lansing’s income tax projection.

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    How Should I Document Remote Work

    Employees who work in East Lansing but live outside the city should provide a log of their hours worked from home and submit it with their return, East Lansing Income Tax Administrator Jill Rhode said. East Lansing has a form non-resident employees can use to track the hours they worked remotely, called “EL_COV,” available on the city website.

    An employer also could submit a letter attesting to the time employees worked remotely versus in the city, Rhode said.

    If your taxes are unusual, it may worth seeking out an accountant or tax preparation software.

    “My biggest suggestion is that people seek out professional help,” Lansing Treasurer Desiree Kirkland said.

    The Eligibility Criteria For Receiving Stimulus Checks

    • Having a Social Security number.
    • A Single filers earning has to be less than $99000 while for the head of the household it must be below $136,500 to qualify for the criteria. For married couples, it has to be less than $198,000 for the most recently filed tax returns.
    • A person who is not claimed by someone as a dependent is eligible to receive a stimulus check.
    • Those who have filed their tax in 2018 or 2019 a well as those who dont earn the needed amount to file for a tax but they are receiving other federal benefits like Social Security, disability or retirement benefits are also eligible.

    Looking for a free consultation? We are just a call away. Contact us at MI Tax CPA, and our tax consultants are ready to guide you through all your tax related queries.

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