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December 18, 2020

Michigan grants 31-day extension for income tax withholding returns and payments due on December 20, 2020 for certain taxpayers affected by COVID-19 closures

The Michigan Treasury Department announced that it has extended the deadline for monthly or quarterly sales, use, and withholding return and taxes due on December 20, 2020. Any monthly or quarterly non-accelerated payment or return due on December 20, 2020, may be submitted to the Department without penalty or interest by January 20, 2021.

The extension is due to the COVID-19 emergency order issued on December 7, 2020, by the Michigan Department of Health and Human Services (MDHHS) that prohibited gatherings at certain types of facilities, including most entertainment, recreational, and indoor food service venues, resulting in the continued closure of those facilities.

The automatic waiver of penalty and interest applies only to a non-accelerated return or payment of sales, use and withholding tax due on December 20, 2020. Any return or payment due after December 20, 2020, is not currently eligible for this waiver.

The waiver of penalty and interest only applies to non-accelerated sales, use, and withholding filers whose business is subject to the prohibition on gatherings under Section 3 of the December 7, 2020 order. This includes, for example, businesses that are entertainment venues, recreational facilities and places of public amusement, and food service establishments with indoor dining. Businesses not subject to a capacity prohibition, such as a business operating under the emergency rules issued by the Michigan Occupational Safety and Health Administration on October 14, 2020, or businesses operating under general occupancy limitations, such as a retail store, are not eligible for the waiver of penalty and interest. Taxpayers should consult with the MDHHS order to determine if the relief under the extension is applicable.

The waiver does not apply to any accelerated return or payment of sales and use tax that may be due on December 20, 2020 and similarly does not apply to any withholding required to be paid on an accelerated schedule. Any taxpayer that currently pays sales, use, or withholding taxes on an accelerated basis must continue to remit tax according to that accelerated schedule.

The waiver of penalty and interest provided within the extension is automatic. Taxpayers do not need to contact or otherwise submit any documentation to the Department to receive this relief.

Contact the Department at +1 517 636 6925 for questions regarding this extension.

The Department previously extended deadlines and allowed installment payments

As we previously reported, the Department extended the sales, use, and withholding returns and taxes due on February 20, 2020, March 20, 2020 and April 20, 2020 to June 22, 2020. (EY Tax News Update 2020-1351, 5-21-2020.)

These business taxpayers were also allowed to pay their outstanding balances in monthly/quarterly installment payments. Penalties and interest were waived on the deferred payments. To take advantage of the installment payment option, monthly filers were required to submit their outstanding returns for February, March, April and May 2020 tax periods by June 22, 2020, to establish their installment balance. Monthly filers could then make six monthly payments on that balance from June to November 2020. Quarterly filers were required to submit their outstanding first quarter 2020 return by June 22, 2020, to establish their installment balance. Quarterly filers could then make three payments on that balance in June, September and November 2020. (EY Tax News Update 2020-1489, 6-05-2020.)

A notice has not yet been issued regarding installment payments for the most recent sales, use and withholding extension. For general information on installment agreements, go here.

For information on the Department's response to COVID-19, go here.


Contact Information
For additional information concerning this Alert, please contact:
Workforce Tax Services - Employment Tax Advisory Services
   • Kenneth Hausser (
   • Debera Salam (
   • Kristie Lowery (


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