Michigan Estate Taxes

The Michigan estate tax is designed to absorb the federal estate tax credit for state death taxes. No additional estate tax is imposed.

Deductions. The following deductions are generally allowed from a decedent's estate when calculating Michigan estate tax liability:

• the federal unified credit
• marital deduction based on the federal unlimited marital deduction
• claims against the estate
• funeral expenses
• administration expenses
• unpaid mortgages on, or indebtedness in respect of, property where the value of the decedent's interest therein, undiminished by such mortgage or indebtedness, is included in the value of the gross estate
• the amount of state death taxes imposed on a charitable transfer
• losses incurred during the settlement of the estate not compensated by insurance or otherwise
• transfers for public, charitable and religious uses

Returns. If a federal estate tax return must be filed and the decedent had real or tangible personal property located in Michigan, the estate's personal representative must also file a Michigan estate tax return with the Revenue Division of the Department of Treasury within nine months of the decedent's death. If a filing extension is granted for the federal return, a similar extension is granted for the Michigan return.

Michigan estate taxes are generally due within the nine-month period for filing the return. If a payment extension is granted, interest and penalties will accrue from the due date until the tax is finally paid.

If the final determination of federal estate taxes increases the amount of federal tax due, the personal representative must file an amended Michigan return within 60 days of the final determination. If the final determination requires a refund from the state, an amended Michigan return must be filed within one year of such final determination.

Generation-skipping transfer tax. Michigan imposes a generation-skipping transfer tax that is equal to the federal credit.