- 5 -
|
Insurance companies are not specifically excluded from the
Computing Penalty and Interest
statutory definition of a UBG, and thus may be members of a
UBG. However, the tax on authorized insurance companies Annual and estimated returns filed late or without sufficient
is equal to 1.25 percent of gross direct premiums written on payment of the tax due are subject to a penalty of 5 percent of
property or risk located or residing in Michigan. There is no the tax due, for the first two months. Penalty increases by an
traditional apportionment for insurance companies. Thus, additional 5 percent per month, or fraction thereof, after the
even when an authorized insurance company is unitary with second month, to a maximum of 25 percent.
another authorized insurance company, this will have no effect Compute penalty and interest for underpaid estimates using
in calculating the tax. As a result, a combined return is not the CIT Penalty and Interest Computation for Underpaid
required and each insurance company member of a UBG will Estimated Tax (Form 4899). If a taxpayer prefers not to file this
file separately on Form 4905. form, Treasury will compute the penalty and interest and send
For further information on the CIT, see the Michigan a bill.
Department of Treasury (Treasury) Web site at The following chart shows the interest rate that applies to each
www.michigan.gov/taxes . (Click on “Corporate Income filing period. A new interest rate is set at 1 percent above the
Tax” on the left side of the page.) Treasury will post updates adjusted prime rate for each six-month period.
here and via Revenue Administrative Bulletin (available on
the “Reports and Legal Resources” link on the left side of the Beginning Date Rate Daily Rate
page). January 1, 2020 6.4% 0.0001749
Exemption Guidelines July 1, 2020 5.63% 0.0001538
The tax imposed and levied under the Income Tax Act does January 1, 2021 4.25% 0.0001164
not apply to an insurance company authorized under Chapter
46 or47 of the Insurance Code 1956, of PA 218 1956, of MCL For a list of interest rates, see the Revenue Administrative
500.4601 500.4673, to and MCL 500.4701 500.4747. to Bulletins (RABs) on the Treasury Web site at
www.michigan.gov/treasury . (Click on the “Reports and
Filing the Correct Form Legal Resources” link.)
A different primary return and instruction booklet available is
for standard taxpayers (Form 4891) and financial institutions Signing the Return
(Form 4908). All returns must be signed and dated by the taxpayer or the
taxpayer’s authorized agent. This may be the owner, partner,
Due Dates of Annual Returns corporate officer, or association member. The corporate
The tax year an of insurance company the is calendar year. An officer may be the president, vice president, treasurer, assistant
insurance company must file the annual return on or before treasurer, chief accounting officer, or any other corporate
March 1, 2020. The extension that is available to the standard officer (such tax as officer) authorized sign to the corporation’s
taxpayer under MCL 206.685(4) is not available to insurance tax return.
companies. If someone other than the above prepared the return, the
preparer must give his or her business address and telephone
Amending a Return number.
To amend a current or prior year annual return, complete the
Print the name of the authorized signer and preparer in the
Amended Return for Corporate Income and Retaliatory Taxes
appropriate area on the return.
(Form 4906) that is applicable for that year, explaining the
reason for the changes. Include all schedules or certificates Assemble the returns and attachments (in sequence order) and
filed with the original return, even if not amending those use a clip in the upper-left corner or rubber band the pages
schedules. Enter the amounts on the amended return as they together. (Do not staple a check to the return.) In an e-filed
should be. Do not include a copy of the original return with return, the preparation software will assemble the forms and
your amended return. PDF attachments thein proper order automatically.
Current forms are available on Treasury’s Web site at IMPORTANT REMINDER: Failure to include all the
www.michigan.gov/treasuryforms. required forms and attachments will delay processing and may
result in reduced or denied refund or credit forward or a bill for
To amend areturn to claim a refund, file within four years the of
tax due.
original return’s due date. Interest will paid be beginning days 45
after the claim isfiled or the due date, whichever later. is SIGNING AN E-FILED RETURN: As with any tax return
submitted toTreasury on paper, an electronic tax return must
If amending a return to report a deficiency, penalty and interest
be signed by an authorized tax return signer, the Electronic
may apply from the due date of the original return. If any
Return Originator (ERO), if applicable, and the paid tax
changes are made to a federal income tax return that affect the
preparer, if applicable.
CIT tax base, filing an amended return is required. To avoid
penalty, file the amended return within 120 days after the final
determination by the IRS.
4
|