Key figures
Michigan payables
2026, with sources
- State 1099 filing
- YesRequired for 1099s issued to Michigan residents, whether or not tax was withheld.
- 1099-NEC via CF/SF
- File directlyMichigan participates in CF/SF, but state copies of 1099-NEC with a Michigan impact must be filed directly.
- 1099-NEC due date
- Jan 31Same date as federal filing; 1099-MISC is Feb 28 on paper or Mar 31 electronically.
Every 1099 to a Michigan resident
Michigan casts a wide net: anyone required to issue a 1099 must file a copy with Michigan whenever it is issued to a Michigan resident, regardless of where the payer is, where the work happened or whether tax was withheld. A Delaware startup with no Michigan presence that pays a Detroit-based designer $5,000 owes Michigan a copy of that 1099-NEC.
Michigan participates in the Combined Federal/State Filing program, but the 1099-NEC is the exception: state copies with a Michigan impact must go directly to Treasury. Payers issuing ten or more W-2s and 1099s in total upload them through Michigan Treasury Online; fewer can upload or mail.
In practice, the payables close in Michigan includes a 1099 step: at year end, sort contractors by state of residence, and every Michigan resident’s 1099-NEC goes to Treasury through Michigan Treasury Online by January 31 — even for a company with no Michigan employees. Payers with ten or more W-2s and 1099s in total upload them in magnetic media format.
Use tax on what you buy
Michigan’s use tax is 6%, with no local add-ons, and applies to taxable goods bought without Michigan sales tax. Prewritten software delivered to the buyer is taxable; software accessed remotely generally is not. In practice the use tax a startup accrues is on hardware and downloaded licenses bought from out-of-state sellers, reported on the sales, use and withholding return.
Uncashed checks
Vendor checks that go uncashed become unclaimed property, generally after three years, and are reported in the July 1 holder report after due diligence letters. Keeping a stale-check list as part of the monthly bank reconciliation is the simplest way to have the report ready.
The federal baseline
This page covers what Michigan adds. The federal rules underneath it apply here too.
Common questions
Do we file our 1099-NECs with Michigan?
Yes, for any 1099 issued to a Michigan resident — wherever your company is, wherever the work was done and whether or not you withheld. Michigan is in the Combined Federal/State Filing program, but state copies of the 1099-NEC with a Michigan impact must be filed directly with Treasury, by January 31.
Do we owe Michigan use tax on software we buy?
Not usually for pure SaaS. Michigan taxes prewritten computer software delivered to the buyer, but remote access to software has generally been treated as not taxable since the Auto-Owners decision. Laptops, monitors and downloaded software bought without Michigan tax carry 6% use tax.
Payables next door
- INIndiana payablesIndiana reconciles W-2s and 1099s with Indiana withholding on the WH-3 by January 31 and charges 7% use tax on untaxed goods, but not on remotely accessed software.
- OHOhio payablesOhio taxes the business software you buy, so untaxed SaaS invoices carry use tax; 1099s go to Ohio only when they report Ohio withholding.
- WIWisconsin payablesWisconsin wants copies of 1099s of $600 or more paid to its residents, and charges use tax on untaxed goods and downloaded software — not on SaaS.
Founder guides on this
- PeopleContractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
- The closeWhy startups should close their books every monthA monthly close turns a bank balance into numbers an investor, an auditor or a 409A firm will accept. What it is, and why it gets expensive to skip.
More of the Michigan guide
- AccountingAccounting and state tax in MichiganCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in MichiganSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayrollPayroll taxes and employer rules in MichiganWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in MichiganRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in MichiganCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.