5338: City Underpayment of Estimated Income Tax (2024)
Michigan · Michigan Treasury · Used for tax years 2024
Michigan Form 5338 calculates penalty and interest for underpaid, late or missed quarterly estimated city income tax payments for 2024. It figures the required estimated tax, underpayments for each payment period, and total penalty and interest.
Who files this form
Use Form 5338 to figure penalty and interest for missed, late, or insufficient quarterly city estimated income tax payments for 2024.
You may choose not to file this form. Treasury will calculate any applicable penalty and interest and send you a bill.
The instructions say not to complete this form if:
- You had no tax liability for the preceding year, or you were not required to file for that year.
- Your total tax after withholding and credits is $100 or less.
- Your estimated payments were received in four equal, timely installments totaling at least 70% of your current-year or prior-year tax.
The instructions also say to stop if line 6, minus withholding and payments made on your behalf by a partnership, is less than $100.
When it's due
For tax year 2024, the form lists these estimated payment due dates:
- April 15, 2024
- June 17, 2024
- September 16, 2024
- January 15, 2025
Payments received after January 15, 2025 are not considered estimated tax payments for tax year 2024.
What you'll need
Have these returns and payment details ready:
- Your completed 2024 City of Detroit Income Tax Return, Form 5118, 5119, or 5120. The instructions require completing it before Form 5338.
- Your prior-year tax amount and credits for taxes paid to another city.
- Your current-year tax amount and credits for taxes paid to another city.
- Amounts and dates of estimated tax payments, total withholding, and taxes paid on your behalf by partnerships.
- Any 2023 overpayment credited forward to 2024.
- Your full name and Social Security number, plus your spouse’s information if filing a joint return.
Include a separate sheet if needed for multiple interest calculations when an underpayment was paid in more than one payment.
Common mistakes
- Including extension payments. The instructions say not to enter extension payments on this form.
- Counting late payments as 2024 estimates. Payments received after January 15, 2025 do not count as estimated tax payments for 2024.
- Working across columns too soon. The instructions say to complete lines 9 through 20 for column A before moving to column B, and so on. Complete each column only to the date payment was made.
- Assuming a refund means no penalty or interest. A late or insufficient payment in any quarter can result in charges even if your return shows a refund.
- Assuming a later overpayment erases earlier charges. Penalty and interest are calculated separately for each due date and may still apply when an earlier underpayment is made up later.
Questions people ask
Can Treasury calculate the penalty and interest for me?
Yes. If you choose not to file Form 5338, Treasury will calculate any applicable penalty and interest and bill you. The instructions say the charges are the same whether payment is received with the return or Treasury sends a bill.
How are withholding and partnership tax payments allocated?
One-fourth of your total withholding and taxes paid by partnerships is treated as paid in each quarter and entered on line 9.
Where does my 2023 overpayment go?
If it was credited forward to 2024, include it in column A on line 9. It applies to the first installment.
How are payments applied when I have an earlier underpayment?
Payments go toward an existing underpayment first, regardless of when they are received. Any remaining balance applies to the next period.
Does part of a month count when calculating the penalty?
Yes. For line 24, any fractional month counts as a whole month.