is the state of michigan taxing the first 10,200 of unemployment benefits for 2020?

Forum|Forum|5 years ago
March 18, 2021
9 replies
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Drake says that Michigan already does not tax employment (or at least a portion of it), so the $10,200 might need to be added back so the State isn't double-deducting unemployment.

https://kb.drakesoftware.com/Site/Browse/17148/State-Conformity-to-ARP-Unemployment-Compensation

M

mappp

Level 5

Not true. MI does NOT have an exclusion for unemployment. MI will withhold both Federal and MI state tax from unemployment. MI does use the Federal AGI as starting point for calculation of MI tax and there are some subtractions from the AGI. Unemployment is not one of the subtractions allowed except for railroad unemployment benefits. (See MI instructions, pg 14 Misc subtractions).. I've scoured the MI web site earlier today 3/18, and don't see any mention of adding back the Federal waived unemployment amount. Still looking for any mention on the MI site.

https://www.michigan.gov/documents/taxes/CC-41011_608354_7.pdf

T

TaxGuyBill

Oops, I misread the Drake chart (I jumped lines).

But according to the Drake chart, Michigan is "conforming" to the Federal rules for unemployment. Assuming that is correct, you would not need to do anything for the State return.

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