Michigan Department of Treasury Acknowledges Notices Issued in Error

Incorrect underpayment notices

On April 23, the Michigan Department of Treasury acknowledged that thousands of taxpayers are receiving underpayment notices in error. Many taxpayers who made 2025 estimated tax payments to the State of Michigan were not properly credited for those payments, and therefore, received a notice from the state that reflected an underpayment of tax equal to the amount of estimated tax they had already paid. 

The Treasury Department confirms that the issue was limited to the letters themselves, not to the underlying tax records. They are working to correct the system error and will issue revised notices once resolved. At this time, no action or response is required from taxpayers who received these incorrect letters.

Erroneous refund checks for penalties and interest

A separate issue has also been identified. Some taxpayers who appropriately reported an underpayment penalty and interest with their return are now receiving refund checks from the State of Michigan in the amount of the penalty and interest. 

The Michigan Department of Treasury is asking taxpayers not to cash these checks. Instead, taxpayers should return the uncashed check along with a brief explanation of why the check is being returned to: 

Michigan Department of Treasury
P.O. Box 30788
Lansing, MI 48909

Next steps

If you receive any correspondence from the State of Michigan, we encourage you to forward it to your Yeo & Yeo tax professional. We will evaluate whether the notice was received in error or not and help with the next steps.