How to Complete Michigan Form MI-2210: Exceptions, Penalty, and Waiver

Michigan Form MI-2210 is the worksheet you attach to your MI-1040 to figure out whether you owe interest and a penalty for not paying enough estimated income tax during the year. You need it when your total tax minus withholding and credits comes to more than $500 and your quarterly payments didn’t hit one of the state’s safe harbors. The form has three parts: an exceptions test, an interest calculation, and a penalty calculation. For 2025 returns filed in 2026, the underpayment interest rate is 8.48 percent annualized for the January through June 2026 window.¹

Do You Actually Need to File It

Run one quick test first. Take line 21 of your MI-1040, subtract lines 26 through 31 (your credits and withholding), and look at the result. If it’s $500 or less, you don’t need MI-2210 at all.² Michigan’s pay-as-you-go rule under MCL 206.301 only kicks in for people who expect to owe more than that beyond withholding.³

Even if the number is higher, you avoid the penalty if your timely quarterly payments met any one of three benchmarks:

90 percent of your 2025 tax
100 percent of your 2024 tax
110 percent of your 2024 tax, if your 2024 adjusted gross income was over $150,000 ($75,000 if married filing separately)

You also skip the form if you had no 2024 tax liability and your 2024 federal return covered a full 12 months.² These thresholds track the federal ones because MCL 206.301(11) tells Michigan to compute installments “in the same manner as provided in the internal revenue code.”³

What to Gather Before You Start

Have these in front of you:

Your completed 2025 MI-1040. The tax, credit, and withholding figures feed directly into MI-2210.
Your 2024 MI-1040. You need last year’s liability to test the 100 percent or 110 percent safe harbor.
Records of every quarterly estimated payment: exact dollar amount and date sent. Bank statements or canceled checks work if the MI-1040ES voucher stubs are gone.
W-2s and 1099s showing your Michigan withholding. The form spreads annual withholding evenly across the four quarters (one-fourth per due date) unless you attach proof of the actual withholding dates.²

Part 1: The Exceptions Test

Part 1 (lines 1 through 7) figures your required annual payment and compares it to what you actually paid. Line 4 is your 2024 tax. If your 2024 AGI was over $150,000 ($75,000 married filing separately), enter 110 percent of it instead of the raw number. Line 5 is your 2025 tax. Line 7 measures your payments against the smaller of line 4 or line 5.² If your payments covered the required amount, you’re done. If not, the form pushes you into Parts 2 and 3.

The Annualized Income Method

If your income came in unevenly, say a December bonus, seasonal business revenue, or a one-quarter capital gain, the annualized income installment method can shrink the penalty for quarters when you actually had little income. Check the box on line 8 and complete the separate Annualized Income Worksheet.² You compute taxable income through each quarter’s end, annualize it, calculate the tax on the annualized figure, and derive a required installment for that quarter. All four columns have to be completed together. The line 16 total from the worksheet moves back to line 9 of MI-2210. When you annualize, put 25 percent of your total withholding in each column of line 10 unless you can document the actual dates it was withheld.

Parts 2 and 3: Interest and Penalty

Michigan’s quarterly due dates are April 15, June 15, and September 15 of the tax year, plus January 15 of the next year.³ Part 2 gives you a column for each. For every quarter, you enter the required installment, subtract what you actually paid by that date, and treat the difference as the underpayment for that period.

Computing the Interest

Under MCL 205.23, the interest rate is 1 percentage point above the adjusted prime rate charged by at least three commercial banks to large businesses, reset twice a year on six-month averages ending March 31 and September 30.⁴ You multiply each quarter’s underpayment by the daily rate for each day it was late. For 2025 returns, the rates that apply are:

9.47 percent from April 15 through June 30, 2025
8.66 percent from July 1 through December 31, 2025
8.48 percent from January 1 through June 30, 2026 (daily rate 0.0002324)

The MI-2210 instructions list these rates in the same table you’ll use to fill in the interest columns.²

Computing the Penalty

Part 3 stacks a flat penalty on top of the interest. Two rates apply, depending on the quarter:

25 percent of the tax due (minimum $25) for a quarter where you sent no estimated payment at all
10 percent of the tax due (minimum $10) for a quarter where you paid something but paid late or too little

Put the applicable percentage on line 24 for each column, multiply by that quarter’s underpayment, and add the four results.² The combined interest and penalty total is the figure you carry to your MI-1040.

Filing It and Paying What You Owe

Attach the completed MI-2210 to your MI-1040. E-filing software handles this automatically. Paper filers include it in the return packet.²

Pay what you owe with the return rather than waiting for a bill. Electronic payments run through Michigan Treasury eServices: direct bank transfers (eCheck) are free, debit cards carry a flat $3.95 fee, and credit cards run 2.3 percent of the payment.⁵ Any additional wait accrues more interest.

Asking for a Waiver

Because Michigan’s rules follow the federal framework, the federal waiver logic applies. If you retired after reaching age 62 or became disabled during the tax year or the year before, and the underpayment was due to reasonable cause rather than willful neglect, you can ask Treasury to waive the penalty.⁶ Attach a written explanation to your return. Abatement is discretionary, not automatic.

Keeping This from Happening Again

If you’re filling out MI-2210 for the first time, adjust your plan for next year now.

Increase your withholding. File a new W-4 with your employer for extra Michigan tax per paycheck. Michigan’s 4.25 percent flat rate makes the math simple.
Set up quarterly payments. Use Form MI-1040ES to send them on April 15, June 15, September 15, and January 15. You can pay electronically through Michigan Treasury eServices or mail the voucher with a check to Michigan Department of Treasury, P.O. Box 30774, Lansing, MI 48909.⁷
Aim for the 100 percent prior-year safe harbor. It’s the easiest to hit because you already know the number. If your 2025 AGI is over $150,000, aim for 110 percent instead.

Any time your income changes materially (new job, big investment gain, self-employment starting up), revisit your withholding right then instead of at filing time.

1
Michigan Department of Treasury. Interest Rate Due on Underpayments and Overpayments
2
Michigan Department of Treasury. 2025 Michigan Form MI-2210 Underpayment of Estimated Income Tax
3
Michigan Legislature. Michigan Code 206.301 – Estimated Tax; Installment Payments; Due Dates
4
Michigan Legislature. Michigan Code 205.23 – Deficiency; Interest; Penalty
5
Michigan Department of Treasury. Make a Payment
6
Internal Revenue Service. Topic No. 306, Penalty for Underpayment of Estimated Tax
7
Michigan Department of Treasury. 2025 MI-1040ES, Michigan Estimated Income Tax