Michigan to Increase Interest Rate for Income Tax Refunds

  • June 17, 2014
  • Maria Montie, CPA, MST, CVA, MAFF

empty mailboxIn a recent post, we detailed how you could check the status of your State of Michigan tax refund if you haven’t received it yet.  But what if the refund check becomes VERY late?  Public Act 133 of 2013 provides that beginning January 1, 2014, the Michigan Department of Treasury will be required to pay additional interest on a personal income tax refund owed to an individual taxpayer if the refund had not been paid within one of the following dates for the applicable tax year:

May 1, for returns received by March 1 of the applicable tax year;

  • 60 days from the date the department received the return, for returns received after March 1 of the applicable tax year. 

The additional interest must be paid at a rate of 3% per annum, calculated from the time the tax was due and until the refund was paid, if all of the following conditions are met: 

  • the refund was due on an original return that was timely filed under the applicable income tax provision;
  • the department did not adjust the refund;
  • the return was complete for processing purposes with no calculation errors and contained all required information prescribed by the department;
  • the taxpayer had complied with the department’s request, if any, for additional documentation or information within 30 days of the request;
  • the refund was not subject to a suspension of the statute of limitations under §205.27a(3) or (4), M.C.L., except for an audit by the department;
  • no portion of the refund was subject to interception under §205.30a, M.C.L., for other liability of the taxpayer; and
  • the amount to be refunded was more than $1.