Estimated state tax payments

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speer
Posts: 65
Joined: Thu May 19, 2016 11:56 am

Estimated state tax payments

Post by speer »

US citizen. Became Michigan resident 1/20/2020 (from Canada).

Michigan states it follows IRS guidelines for estimated tax requirement:
90% of your current year's tax liability,
or 100% of your previous year's tax liability,
or 110% of your previous year's tax liability if your previous year's adjusted gross income is more than $150,000 ($75,000 or more for married filing separate).

Since I had no Michigan tax liability the prior year, can I pay "100% of your previous year's tax liability" of $0?

My IRS tax liability last year was ~$200 which is what I am doing likewise for the IRS.
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samsoes
Posts: 1487
Joined: Tue Mar 05, 2013 9:12 am

Re: Estimated state tax payments

Post by samsoes »

speer wrote: Sat Mar 14, 2020 2:09 am US citizen. Became Michigan resident 1/20/2020 (from Canada).

Michigan states it follows IRS guidelines for estimated tax requirement:
90% of your current year's tax liability,
or 100% of your previous year's tax liability,
or 110% of your previous year's tax liability if your previous year's adjusted gross income is more than $150,000 ($75,000 or more for married filing separate).

Since I had no Michigan tax liability the prior year, can I pay "100% of your previous year's tax liability" of $0?

My IRS tax liability last year was ~$200 which is what I am doing likewise for the IRS.
Yup. If your tax liability in the prior year was zero, there is no requirement to make estimated payments in the following year; there will be no penalty no matter how much your tax liability is.
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Topic Author
speer
Posts: 65
Joined: Thu May 19, 2016 11:56 am

Re: Estimated state tax payments

Post by speer »

Well thats good to know.

So since my IRS liability was $200, I pay the IRS $200 (in lump sump instalemnt) and $0 to Michigan and im good until Apr 15, 2021 when I pay the tax on what I earned during 2020?
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