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If the previous year was less than 12 months,

Column B

Enter payments made after the due date

annualize the previous year’s tax liability to determine

in column A and by the due date in

if estimates are due and the amount due. See page 7

column B.

for complete annualizing instructions.

Column C

Enter payments made after the due date

in column B and by the due date in

Annualization Worksheet

column C.

Taxpayers may use the annualization worksheet to

Column D

Enter payments made after the due date

determine the amount of estimates due when income is

in column C and by the due date in

not evenly distributed through the tax year.

column D.

Each column represents a quarterly 3-month filing

If quarterly payments are made after the due date,

period.

penalty and interest will apply until the payment is

The annualization worksheet essentially leads filers

received. If less than full payment is made with a late

through the steps required to calculate the actual SBT

filing, the taxpayer will need to compute multiple

due for the tax year to date. The net tax liability is

penalty and interest calculations for each column.

then annualized and multiplied by the percentage of

Attach a separate schedule if necessary.

estimates required for that quarter.

PART 2: Figuring the Interest.

Line 30, Estimate Requirements by Quarter. The

Compute the interest due for both non-filing and

totals for line 30, columns A, B, C, and D, must equal 85

underpayment of the required estimated tax in this

percent of the current year tax liability on line 3.

section. Follow the instructions for each line, as the

Attach this schedule to the return.

interest amount is different for each quarter.

Line 17, Due Date. Enter the due date of the next

quarter or the date the tax was paid, whichever is earlier.

In column D, enter the earlier of the due date for the

annual return or the date the tax was paid. An approved

extension does not change the due date of the annual

return (column D) for this computation.

PART 3: Figuring the Penalty

Compute the penalty for non-filing of the required

estimated tax payments in this section. However, if a

taxpayer made any estimated tax payments or there

was a credit available from a prior quarterly return, do

not compute the penalty on that quarter. Treasury will

review the estimates filed and, if necessary, bill the

filer for the appropriate penalty on the underpayment

of estimates.

Avoiding Penalty and Interest

Taxpayers with business activity in Michigan in 2006

and a 2006 tax of $20,000 or less, can avoid paying

penalty and interest in 2007 by using the 2006 tax as

the basis for filing 2007 estimates. Divide the 2006

tax by 4 (for example, $20,000 ÷ 4 = $5,000), and

pay that amount on the 2007 quarterly due dates.

Filers may also divide by 12 and pay that amount with

the monthly SUW tax payment. Taxpayers who had

business activity in Michigan in 2006 but didn’t report

tax liability or were not required to file a 2006 return

can use the 2006 tax as the basis for filing 2007

estimates. In this case, the 2006 tax liability would

have been zero, so quarterly payments would not be

required for 2007.

Instructions For Form C-8020 - Michigan Sbt Penalty And Interest Computation For Underpaid Estimate Tax Page 2

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