A Michigan tax ID number, also known as a Michigan Taxpayer Identification Number (TIN), is a unique nine-digit number used to identify a business or individual for tax purposes in the state of Michigan. Obtaining a Michigan tax ID number is required by law for all businesses and certain individuals that have a tax reporting or payment obligation to the state of Michigan.
What is the requirement for a Michigan tax ID number?
The Michigan Department of Treasury requires all businesses and certain individuals operating in Michigan to obtain a tax ID number. This includes:
- Sole proprietors
- Partnerships
- Corporations
- Limited liability companies (LLCs)
- Nonprofit organizations
- Trusts and estates
- Individuals who pay withholding tax
- Individuals who sell products or services subject to sales and use tax
You must have a Michigan tax ID number if you answer yes to any of the following:
- Do you have employees?
- Do you operate a business in Michigan or have a physical presence in the state?
- Do you withhold Michigan income tax from employee wages?
- Do you remit Michigan sales, use or withholding taxes?
- Do you want to open a business bank account in Michigan?
If the answer is yes to any of these, you are required to obtain a Michigan tax ID number.
How do you get a Michigan tax ID number?
To obtain a Michigan tax ID number, you must register your business with the Michigan Department of Treasury. Here are the steps to get a Michigan tax ID number:
- Obtain a Business Tax Registration form (Form 518) from the Department of Treasury website or request one by phone or mail.
- Complete the registration form with all required business information such as business name, address, ownership structure, etc.
- Indicate the types of tax you will need to register for (sales tax, employer withholding, etc).
- Submit the completed form to the Department of Treasury by mail or fax.
- The Department of Treasury will process the registration and mail you a letter with your new 9-digit Michigan tax ID number.
- Once received, make sure to keep this letter in your records and use the tax ID on all tax returns and payments.
The Department of Treasury will use the information on your registration form to setup tax accounts for your business. Your Michigan tax ID number will be tied to these accounts and used to report and pay various Michigan taxes.
How long does it take to get a Michigan tax ID number?
After submitting the registration form, it typically takes around 4-6 weeks to receive your official Michigan tax ID number in the mail. However, you can obtain a tax ID immediately by registering online or requesting a temporary tax ID number over the phone while waiting for your official number.
Here are the different ways to obtain a Michigan tax ID number and how long each takes:
| Registration Method | Time to Receive Tax ID # |
|---|---|
| File paper form by mail | 4-6 weeks (Official Number) |
| File online | Instantly (Official Number) |
| Request by phone | Instantly (Temporary Number) |
As you can see, registering online through the Michigan Treasury Online service portal is the fastest way to obtain your official tax ID number right away. Otherwise, you will need to wait 4-6 weeks if submitting a paper application by mail.
What information is needed to apply?
Whether registering online, by phone, or submitting a paper application, you will need to provide some key information about your business in order to get a Michigan tax ID number:
- Business Information – Legal business name, address, start date, ownership structure, etc.
- Owner/Officer Information – Names, titles, home addresses, phone numbers, and social security numbers
- Business Tax Information – The types of taxes you will collect/pay (sales tax, employer withholding, etc)
- Licenses – Any relevant business licenses, permits, or registrations
- Signature – Signature of an owner/officer of the business
Having this information ready will help ensure your Michigan tax ID application is processed quickly and accurately.
Do I need to renew a Michigan tax ID number?
No, Michigan tax ID numbers do not expire and renewals are not necessary. The tax ID number assigned to your business will stay the same year after year.
However, you do need to notify the Michigan Department of Treasury if your business undergoes any changes to its legal structure, ownership, address, or if it ceases operations. This ensures your tax accounts and records stay accurate and up to date.
Can I register for multiple tax accounts?
Yes, when registering for a Michigan tax ID number, you can setup accounts for all state taxes that apply to your business. This includes:
- Sales, Use and Withholding Tax
- Corporate Income Tax
- Individual Income Tax
- Motor Fuel Tax
- Tobacco Tax
The registration form allows you to select which tax accounts you need to register for. Your Michigan tax ID number will then be tied to each tax account created so you can properly report and pay sales tax, withholding, income tax, etc. under the same number.
Do I need a separate number for each business location?
No, you can use the same Michigan tax ID number for multiple business locations and entities. When registering, list all of your business locations on the application and the Department of Treasury will associate them with your single tax ID number.
Having one tax ID number for all locations simply makes reporting, paying and managing your Michigan taxes easier across your whole business.
Can I register an out-of-state business in Michigan?
Yes, out-of-state businesses operating within Michigan still need to register and obtain a Michigan tax ID number. This applies to businesses located anywhere in the U.S. or internationally.
Out-of-state businesses with any kind of physical presence in Michigan – known as “nexus” – must comply with Michigan tax laws. This includes having a Michigan office, employees working in the state, owning property, making sales to Michigan customers, etc.
Any out-of-state business that meets Michigan’s nexus requirements for sales tax, income tax, or employer withholding must register and obtain a Michigan tax ID number.
Is a tax ID number the same as an EIN?
No, a Michigan tax ID number is different and separate from a Federal Employer Identification Number (EIN).
An EIN is used for federal tax purposes and obtained from the IRS. A Michigan tax ID number is exclusively for registering with the state and reporting/paying Michigan taxes.
While they are different identifiers, a business will need both a Michigan tax ID and an EIN if operating in the state. The same business information is used to apply for both.
Where is a Michigan tax ID number displayed?
Once received, your Michigan tax ID number should be prominently displayed on:
- Michigan sales and use tax returns
- Michigan income tax returns
- W-2 and 1099 forms for employees and contractors
- Michigan business tax registration certificate
Displaying the tax ID number properly on these documents ensures tax payments and returns are accurately associated with your business accounts.
Is a tax ID number required for a non-profit?
Yes, non-profit organizations in Michigan must obtain a tax ID number like any other business. This applies to non-profits such as:
- Charities
- Churches
- Private foundations
- Social clubs
- PACs, PICs, and 527 organizations
Even though they are tax-exempt, non-profits still have state tax filing and reporting obligations in Michigan. Obtaining a tax ID number allows them to properly register with the Department of Treasury and fulfill any annual tax requirements.
Do independent contractors need a Michigan tax ID?
Independent contractors and self-employed individuals operating in Michigan are required to obtain a tax ID number if they meet any of the following:
- Have Michigan-sourced income over $600 per year
- Pay wages to one or more employees
- Are required to withhold Michigan taxes from payments to nonresident contractors
Having a Michigan tax ID allows self-employed individuals and independent contractors to properly report and pay income tax and employer withholding on earnings sourced from Michigan. It also allows them to provide contractors with any Michigan tax forms as required.
Can a minor get a Michigan tax ID number?
Yes, there is no age restriction on obtaining a Michigan tax ID number. As long as a minor is conducting business in Michigan and has a tax reporting or payment obligation, they must register and obtain a tax ID number.
For example, a minor may need to collect and remit sales tax from a small retail business, report income from self-employment, or withhold taxes on employee wages. Requiring a tax ID number ensures the minor’s business is properly registered and pays all applicable Michigan taxes.
Do I need an ID number for gambling/casino winnings?
Michigan does not impose state taxes on gambling or casino winnings. Therefore a Michigan tax ID number is not required to claim any gambling winnings or losses in the state.
However, you may need to provide identification such as a Social Security number or driver’s license to the casino for certain winnings. And gambling winnings are still subject to federal income taxes.
Can a tax ID be used instead of a Social Security number?
In most cases, a Michigan tax ID number cannot be used in place of a Social Security number. They are separate identifiers used for different reporting purposes.
Tax ID numbers are specifically for business registration, reporting and tax payment. Social Security numbers are for personal tax purposes related to wages, individual income tax, etc.
The only exception is sole proprietors filing Schedule C tax returns. They can choose to use their Social Security number OR their business tax ID number.
What are common mistakes when registering a tax ID?
Some common mistakes to avoid when registering for a Michigan tax ID number include:
- Using an individual name instead of a business name
- Not registering for all required tax accounts
- Failing to notify of address or business structure changes
- Applying with incomplete owner/officer information
- Forgetting to display the tax ID on required tax forms and returns
Taking care to provide complete information upfront and keeping your tax ID current will help prevent many issues and compliance problems down the road.
What are the penalties for not having a Michigan tax ID number?
Failing to obtain a Michigan tax ID number when required can lead to severe penalties from the Department of Treasury. This includes:
- 10% penalty on unpaid Michigan sales, use and withholding taxes
- $50 penalty for each statement/document issued without a tax ID number
- 25% penalty on any unremitted employee withholding taxes
- Up to $250 fine for operating without registering your business
Criminal charges are also possible for tax evasion by intentionally failing to register for a tax ID. Obtaining a Michigan tax ID is crucial for staying compliant and avoiding substantial fines.
How can I verify a Michigan tax ID number?
You can verify a business’s Michigan tax ID number with the Department of Treasury to ensure it is valid and registered. Options to verify include:
- Using the online Taxpayer Business Search
- Calling the Department of Treasury registration support line
- Requesting an entity verification letter from the Department of Treasury
Checking a tax ID number before doing business can help avoid issues. It ensures you have the correct legal business name and address as well.
How do I cancel a Michigan tax ID number?
To cancel your Michigan tax ID number, you must submit a Business Tax Cancellation Form to the Department of Treasury. Reasons to cancel include:
- You cease business operations permanently
- Your business was sold or transferred to a new owner
- You’re an individual who no longer needs to collect/remit taxes on income
It’s important to properly cancel your tax ID when its use is no longer required. This closes out your tax accounts and settles any outstanding tax liabilities.
Can I use my tax ID number for personal taxes?
No, a Michigan tax ID number assigned to your business should only be used for business tax purposes – not personal taxes.
You cannot use a business tax ID on your individual state income tax return. Only your Social Security number should be used for filing and reporting taxes on personal income.
Using your business tax ID incorrectly can lead to processing delays and problems with properly crediting tax payments.
Conclusion
Obtaining a Michigan tax ID number is a crucial step for legally operating any business or as a contractor in the state. All organizations and individuals with a Michigan tax filing or payment obligation must register for this unique 9-digit identifier.
Following the registration steps, displaying your tax ID properly, and keeping it updated will ensure full compliance with Michigan business tax laws. Avoiding common mistakes like registering without complete owner information or using a tax ID incorrectly will prevent problems. Overall, every Michigan business should take the time to properly get a tax ID number.