Michigan State Tax Routine (MITX)

The Michigan State Tax Routine (MITX) processing utilizes the following steps:

Line 1

Multiply the employee’s gross wages for the current payroll period by the number of payroll periods in a year to obtain their Annualized Gross Income (GI)

Line 2

Determine the employee’s personal exemption credit*

  1. No of Personal Exemption (TAX) 

  2.  Annual Exception Amount on TAXP

Line 3

Determine the Taxable Amount by subtracting Lines 2 from Line 1.

Line 4

Determine the Minimum Amount withheld from the DEDX.

Line 5

Determine the Net Taxable Income excess over by subtracting the Minimum amount withheld (Line 4) from the Taxable amount (Line 3)

Line 6

Determine the Amount of Tax Withholding**, using the Marginal Tax Rates (DEDX) entries for the State Tax deduction, 

  1. Tax rate percent  

  2.  Annual Base tax amount

Line 7

Divide the amount on Line 6 by the number of payroll periods in a year to determine the employee’s Michigan Withholding Tax for the pay period.

**Determine the Employee Personal Credit

  1. Take the Annual Exemption Amount on the Tax Parameters (TAXP) entry for the employee’s State Tax deduction and multiplied by the number of State Tax Allowances on the Employee Tax Parameter (TAX). 

** Determine the Amount of Tax Withholding

  1. Tax Rate Percent of the Net Taxable Income plus Base Tax Amount.

Data Setup Considerations

Sites need to ensure that they have implemented the following Business Process/Data Setup Changes at their site prior to Michigan State Tax Routine.

  1. The Tax Parameters (TAXP) setup for Michigan.

  1.  Personal Exemption Amount is captured as a part of Annual Exemption Amount.

  1. The Employee Tax Parameter (TAX) enrollment.

  1. The State Tax Allowance field captures the employee’s claim for the number of exemptions.
    Note: The point 2 function if the MULTI_STATE_TAX parameter is set to N as part of the Application Parameter (APPCTRL) page, if the parameter is set to Y, then the system functions as per point 3.

  1. Employee enrolled in the State Tax Enrollment (TAXS) (Note: this only applies to employees enrolled in the State Tax Class (TAXCS) that includes a Michigan Deduction).

  2. The State Tax Allowance field captured the employee’s claim for the number of exemptions.