There is good news for those who collected unemployment benefits in 2020: no penalty or interest related to underpaid estimated tax payments will be levied, effective immediately.
Taxpayers, even if unemployed, are required to make quarterly estimated tax payments if they expect to owe more than $500 in state taxes. Penalties for failure to do so are waived for 2020 unemployment benefits only.
State Treasurer Rachael Eubanks said, “This is the right thing to do. COVID has disrupted our lives in numerous ways – and many Michiganders are depending on unemployment benefits to get them by during this extraordinary time. Having to pay penalties and interest on unemployment benefits is the last thing individuals should be worried about when they go to pay their taxes.”
No action is needed to get the waiver. It is automatically granted to unemployment beneficiaries. Unemployment money is taxable income and will need to be claimed on 2020 tax filings. Unemployment recipients should have received a 1099-G. Taxes are now being processed at both the federal and state levels.
More information about tax filing can be found at www.michigan.gov/incometax.
Reporting for WGRT – Jennie McClelland
