Michigan Employer Withholding Tax

Who is required to register for withholding tax?
Every Michigan employer who is required to withhold federal income tax under the Internal Revenue Code must be registered for and withhold Michigan income tax.

Where can I get information on the withholding tax rate and personal exemption rate?
Form 446, Income Tax Withholding Guide at www.michigan.gov/documents

I have Michigan employees, but my company is located in another state. Am I still required to withhold Michigan tax from employees?
Yes. Nexus (a physical presence for the company) would be created for the out-of-state company. Employers would be required to register with the Michigan Department of Treasury to withhold Michigan income tax.

My company is located out-of-state and has no nexus in Michigan. We have employees who are Michigan residents working in an out-of-state location. Which state's withholding tax would apply?
Michigan has a reciprocal agreement with Wisconsin, Indiana, Kentucky Illinois, Ohio and Minnesota. Employers in these states should not withhold their state's income tax from Michigan residents who work in those states. A voluntary registration with the Michigan Department of Treasury to withhold Michigan income tax may be obtained or the employee must make estimated income tax payments directly to Michigan.

Are non-profit organizations required to withhold tax from their employees?
Yes. Non-profit organizations are required to withhold income tax.

Where do businesses send copies of their 1099 forms?
Businesses are not required to submit copies of 1099 forms to the State of Michigan unless Michigan income tax was withheld with the exception of 1099-MISC forms for services performed in Michigan. Submit 1099 forms that include Michigan withholding and the 1099-MISC forms with Form 165, Annual Return for Sales, Use and Withholding Taxes.

To register for withholding tax, mail or fax applications to:

Registration Section
Department of Treasury
Treasury Building
Lansing, MI 48922
Fax: (517) 636-4520

New hire information:

Federal new hire information at http://www.acf.dhhs.gov/programs/cse/newhire/index.html
Michigan new hire information at http://www.newhire-usa.com/mi