Leaders' Edge

Michigan’s accounting professionals and the MACPA are fundamental partners with the Department of Treasury and play a key role in efforts to ensure compliance with the state's Tax Code and maintain the accuracy and fairness of our tax reporting and collection systems.

E-file Advantages

E-filing establishes a tax practice as
progressive and consumer-oriented.

E-filing is safe.

Tax information is encrypted and submitted via secure, telephone lines.
The possibility of theft or compromise of a return is virtually eliminated.
Preparers receive electronic confirmation that the return has been accepted.

E-file is fast.

95 percent of all Michigan income tax returns can be filed electronically.
Clients receive refunds on error-free returns much faster than paper.

The Michigan Department of Treasury is committed to utilizing technology whenever possible to improve the efficiency of its systems. For the 2004 tax season, Treasury instituted a new e-file policy, designed to offer budget savings to the state and provide significant benefits to MACPA members, their practices and their clients.

Today, Treasury's e-file program has been a resounding, record-breaking success, with much of the thanks owed to MACPA members who have supported it. Thanks to tax professionals around the state, Treasury processed a record number – 2.75 million – of e-filed income tax returns last year, ranking Michigan third in the nation.

Treasury's e-file policy will continue during the upcoming tax season: all tax professionals who prepare and file more than 200 State of Michigan income tax returns are expected to file those returns electronically.

New This Year
Treasury officials believe e-filing continues to present an outstanding opportunity for the state to improve its tax processing efficiencies. New e-file programs for Single Business Tax filers are added this year. Following is an outline of the new programs.

Federal/State 1120 E-file
Tax preparers and transmitters, accepted in the IRS 1120
e-file program, may participate in the Fed/State 1120 e-file program. This allows both federal and state returns to be filed together electronically, through one transmission to the IRS. The IRS will acknowledge acceptance of the federal return and receipt of state data, which will then be made available to the Department of Treasury, for acknowledgment and processing.

State Stand-Alone 1120 E-file
Tax preparers and transmitters accepted in the IRS e-file program may also participate in the State Stand-Alone 1120 e-file Program, if it is supported by their software. Preparers will have to indicate, in their software, that it is a State Stand-Alone filing.

The IRS will validate the account number against the name, and issue a receipt notification that the state submission was received. If the return passes validation, the state data will be made available to the Department of Treasury for acknowledgment and processing. The transmitter should receive the Michigan acknowledgment within three business days from the date the return is successfully transmitted to the IRS. The Electronic Transmitter Identification Number (ETIN) must be entered correctly in the software in order to receive acknowledgments. Copies of federal and Michigan returns and schedules should not be mailed to Treasury unless requested.

Who Can E-file
Software developers are required to support e-file for all SBT returns that are included in their tax preparation software. If preparers use computer software to prepare SBT returns, they must e-file all eligible returns that are supported by the software.

C-8000	SBT Annual Return
C-8000C	SBT Credit for Small Business and Contribution Credits
C-8000D	SBT Capital Acquisition Adjustment
C-8000H	SBT Apportionment Formula
C-8000ITC	SBT Investment Tax Credit
C-8000KC	SBT Schedule of Shareholders and Officers
C-8000S	SBT Reductions to Adjusted Tax Base
C-8009	SBT Allocation of Statutory Exemption, Standard Small Business Credit and Alternate Tax for Member of Controlled Groups
C-8010AGR	SBT Adjusted Gross Receipts for Controlled Groups
C-8020	SBT Penalty and Interest Computation for Underpaid Estimated Tax
C-8030	SBT Notice of No SBT Return Required
C-8043	SBT Statutory Exemption Schedule
C-8044	SBT Simplified Return
3307	SBT Loss Adjustment Worksheet for the Small Business Credit

SBT Direct E-file
Preparers purchase and install tax preparation software on their computer and use Internet access to e-file. Returns can be transmitted directly to Treasury, or the software provider may also be able to transmit return, sometimes for an additional fee. Software companies can explain which transmission capabilities are offered.

Returns will be signed using an electronic signature composed of the following shared secrets:

Note: If the return is signed using shared secrets and the return is rejected because the shared secrets do not match, the taxpayer/preparer may correct the shared secrets information and retransmit. There is no limit on how many times a return can be retransmitted in this circumstance.

In the past, Treasury has provided active SBT taxpayers who have filed form C-8000, C-8030 (filed by registered taxpayers) or C-8044 in the last two years with their Customer Service Number, which must be supplied as part of the electronic signature when e-filing a return. The CSN is eight digits comprised of one alpha character and seven numbers. The CSN is case sensitive and the letters “I” and “O” are not used.

Beginning with tax year 2005, Treasury will no longer mail CSN letters to eligible SBT filers in January. Therefore, if a taxpayer is filing their second return with Treasury within the last two years, they will need to obtain their CSN from Treasury’s web site self-service.

Taxpayers should keep their CSN on file, as they will use the same number for future filings of e-filed SBT returns. If a CSN has been misplaced, it can be obtained through Treasury’s web site self-service. If Internet access is not available, call 517.636.4700 and request a letter containing the CSN to be mailed to the taxpayer.