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News & Events Digest





*December 2022*
Port Austin

The ice builds on the shore of Lake Huron near Port Austin, Mich. (Danelle Gittus/Michigan Department of Treasury)

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Gov. Whitmer Announces Michigan Education Savings Program Earns Top Rating for Third Straight Year

Gold Star

Gov. Gretchen Whitmer recently announced that the Michigan Education Savings Program (MESP) was again?rated one of the country?s best performers in Morningstar Inc.?s annual ratings of 529 college savings plans [ [link removed] ], retaining its ?Gold? status for the third straight year. The governor is committed to working with anyone to lower costs for working families and ensuring everyone can get on affordable path to higher education through the MESP, programs like Michigan Reconnect, and the Michigan Achievement Scholarship.?

?Saving for your child?s education today can put them on a path to long-term success,? said?*Governor Whitmer*. ?For years, the MESP, one of two 'Gold' status programs in the nation, has been helping families save for college. I encourage Michiganders to check out all the programs offered by the Michigan Department of Treasury and make an investment in the future early so that they are in a stronger financial position when tuition bills come due later in life. I will work with anyone to help more students get to college by encouraging early saving through the MESP and establishing and expanding both Michigan Reconnect and the Michigan Achievement Scholarship to offer tuition-free or lower-cost paths to higher education.??

?It?s always gratifying to earn validation from a respected third party that you?re among the best college savings plans in the entire country,? said?*State Treasurer Rachael Eubanks*. ?Our current and future account owners can take comfort that the state of Michigan is delivering to families the best plan to help their loved ones pursue their college education dreams. Saving for college does not require a huge deposit. Contact us today so we can help you figure out which plan suits your family?s goals.? ?

*MESP?s ?Gold? Status*

Morningstar analyzed 54 education savings plans in 2022. MESP was one of two to earn a ?Gold? rating, and the plan was praised for its ?excellent stewardship? and ?well-designed, low-cost offerings.? Plans receiving ?Gold? ratings are considered ?industry standard setters? by Morningstar. ?

MESP, managed by TIAA-CREF Tuition Financing Inc. on behalf of the Michigan Department of Treasury, offers a variety of investment options in which families can save for college tax-free. The options vary in investment strategy and degree of risk, allowing account holders to select an option or combination of options that fit their needs. ?

Morningstar noted that in 2020, MESP moved to a target enrollment structure, in which participants see a gradual shift to bonds from stocks to mitigate risk. Morningstar also praised the ?highly rated? funds offered within MESP accounts, including those from Vanguard, iShares, Schwab and TIAA-CREF. MESP further garnered recognition for its low fees, which make it ?among the cheapest in the industry,? Morningstar stated. ?

*MESP*

MESP is one of three Michigan Section 529 plans, named after the section of the Internal Revenue Code that allowed for their creation. The others are the Michigan Education Trust prepaid tuition program and the MI 529 Advisor plan, which is offered through investment advisers. ?

Each plan offers Michigan taxpayers a state income tax deduction on contributions and potential tax-free growth on earnings if account proceeds are used to pay for qualified higher education expenses. ?

MESP can be used at any eligible college, university or trade school in the nation and some abroad for a variety of qualified higher education expenses, including tuition, fees, certain room and board costs, books, supplies and equipment required for enrollment. ?

More information about MESP is available at?MISaves.com [ [link removed] ]?or by calling 877-861-6377. ?


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Michigan Unveils Newly Minted Alliance to Earn Cash Back for College

Cash Back

Under a new partnership announced today, Michigan families can leverage their everyday purchases into college savings for their children and grandchildren similar to earning cash back for gas or groceries.

The partnership between the Michigan Education Savings Program (MESP) and Upromise, a leading consumer brand, offers a free rewards program designed to help families save for college.

?It is not often we get an opportunity like this to promote a program that turns an ordinary shopping trip into cash for college ? talk about bargain shopping,? said Diane Brewer, Michigan Education Trust executive director. ?The state of Michigan continues to make clearing barriers to higher education a top priority and we are confident promoting Upromise in Michigan will strengthen that effort.?

Brewer?s office, within the Michigan Department of Treasury, oversees MESP ? a state-sponsored, tax-advantaged 529 college savings plan created in 2000 to help Michiganders save for higher education.

With the cost of college increasing at a faster rate than inflation, Brewer says that MESP provides families the ability to invest and grow their savings not only over the long term but also in a more tax-favorable manner.?

?Upromise augments that savings by offering a simple, free and almost effortless dividend for a child?s future educational needs,? Brewer said. ?Any time you eat out, buy groceries, fill your gas tank or make just about any routine purchase, Upromise will add to your college savings plan at no additional cost to you.?

Derek DeLorenzo, senior director for Upromise 529 programs, pointed to the program?s success across the nation as, likely, evidence that it will grow in Michigan.

?Upromise has been highly successful in other states, and we are extremely excited to expand it in Michigan,? DeLorenzo said. ?We look forward to continuing our mission to invest in higher education in Michigan and throughout the country.?

To learn more about the program or to enroll, please contact,?MIsaves.com/upromise22. [ [link removed] ]

Brewer encouraged parents, grandparents and guardians to put their money to work in an MESP account for a child or grandchild.

Managed by TIAA-CREF Tuition Financing Inc. on behalf of the Michigan Department of Treasury, MESP has more than 299,000 accounts with total assets exceeding $6.6 billion.

MESP contributions can be placed in a variety of investment options, where they grow tax-deferred and then can be withdrawn tax-free for qualified education expenses.

The savings program can be used at any eligible college, university or trade school in the nation for a variety of qualified higher education expenses, including tuition, fees, certain room and board costs, books, supplies and equipment required for enrollment.


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Gov. Whitmer and Lt. Gov. Gilchrist Announce 36 Investments in Michigan Small Emerging Manager Program Totaling More Than $139 Million

Emerging Manager

Gov. Gretchen Whitmer and?Lt. Gov. Garlin Gilchrist II announced that a Michigan Department of Treasury program for small emerging investment fund managers has reached its halfway point. To date, the Michigan Small Emerging Manager Program has made 36 investments totaling more than $139 million.??

?As governor, I am focused on growing our economy, and I will work with anyone to create jobs, lower costs, and bring investment to every region,? said?Governor Whitmer. ?The Michigan Small Emerging Manager Program ensures that small private-market investment managers in our state have the support they need to grow their businesses and make profitable returns to reinvest in our communities.??

?The Michigan Small Emerging Manager Program is a solution to strengthen investment returns within Michigan?s public school and state employee pension plans,? said?Lt. Gov. Garlin Gilchrist II.??Industry data suggests that small managers with diverse backgrounds perform well when compared to their counterparts. Small managers can be nimbler,?more focused, and are often more keenly motivated to build their businesses through innovative strategies that include maximizing returns via more diversified, values-driven investment opportunities. This program brings everyone to the table.??

The Michigan Small Emerging Manager Program expands access to capital for emerging small private-market investment managers, focusing on generating competitive returns and increasing the diversity of investments with a broader range of managers both in-state and nationally.

The State of Michigan Retirement System (SMRS) has made a $300 million commitment that is co-managed by two industry leading fund managers.

Global investment fund managers Barings and GCM Grosvenor are managing the program, providing expertise and assistance to smaller investment fund managers with the ability to closely monitor their portfolios. Both investment firms run similar programs more broadly across the country.

?Providing broader perspectives to the state of Michigan?s investment portfolio just makes sense for maximizing returns,? State Treasurer Rachael Eubanks said. ?We continue to seek small and emerging private market managers to help our retirement system grow with strategic investment opportunities.? In particular, we are proud of the new Michigan-based fund managers that we have been able to reach with this program.?

Barings and GCM Grosvenor continue to recruit emerging, small private-market investment managers that meet the target criteria, conduct thorough diligence, negotiate market terms, provide capital to managers, and manage the portfolio.?

The Michigan Department of Treasury?s Bureau of Investments provides investment management services and serves as a fiduciary to the SMRS trust funds. The SMRS collectively contains the retirement assets for all state-level public pension funds on behalf of retired and active public-school employees, state employees, state police, and judges.

The SMRS invests in various assets to meet or exceed the actuarial rate of return over the long term and diversifies assets to reduce risk.

Investment managers interested in the program should visit the?Michigan Small Emerging Manager Program website [ [link removed] ].


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Annual State Individual Income Tax System Maintenance Underway

System Down

System upgrades in preparation for next year's individual income tax filing season are underway.

On Dec. 8, the state Treasury Department suspended processing state individual income tax refunds due to annual tax processing system upgrades required for the upcoming 2023 tax filing season. Individuals will be able to check the status of their refunds or returns after Jan. 9, 2023.

Most timely filed refunds for tax year 2021 have been processed.

"I want to thank taxpayers for their patience as we conduct our annual system upgrade in preparation for the 2023 individual income tax filing season," said Deputy State Treasurer Glenn White, who oversees the state Treasury Department's Revenue Services programs. "When the system is operational again in January, we will resume processing tax returns and issuing refunds. We look forward to serving taxpayers in the new year."

At the close of each calendar year, the Michigan Department of Treasury undergoes system maintenance in preparation for the upcoming individual income tax filing season. The Internal Revenue Service and other states have similar end-of-the-year maintenance schedules.

For the 2022 filing season, the state Treasury Department processed more than 5.2 million 2021 tax year individual income tax returns, with a typical refund around $650.

*Questions?*

Although individual income tax return processing will be suspended until early next year, taxpayers can continue to ask questions through?Treasury eServices [ [link removed] ]. The online platform enables taxpayers to ask state income tax-related questions when convenient.

To get started with Treasury eServices, go to?www.michigan.gov/incometax [ [link removed] ]?and click on "Access eServices [ [link removed] ]."


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Make Sure Addresses Are Updated Before The 2023 Income Tax Filing Season

Address Change

Taxpayers are encouraged to check with current and previous employers and financial institutions to ensure they have up-to-date addresses on file in preparation for the 2023 income tax filing season.

By ensuring employers and financial institutions have the latest address information on file, W-2s and other financial documents can be mailed to the correct address. Incorrect addresses typically lead to information being mailed to the wrong location and could cause delays when filing tax returns.

?Making sure your address is updated with current and past employers and financial institutions can help prevent paperwork headaches when you file your income taxes next year," said Deputy State Treasurer Glenn White, who oversees Treasury's Revenue Services programs. "When the individual income tax processing season opens at the beginning of next year, we will be ready to process your return. A few moments of your time today can make filing much easier tomorrow."

Other notable items for Michigan's 2023 individual income tax filing season (2022 tax year):


* Beginning in January 2023, forms and instructions may be viewed and downloaded from www.michigan.gov/taxes [ [link removed] ]. In addition, commonly used forms will continue to be available at Treasury offices, public libraries, northern Michigan post offices and Michigan Department of Health and Human Services county offices.


* When tax season begins in late January, taxpayers are encouraged to e-file their state tax returns instead of mailing a paper return. To learn more, go to www.mifastfile.org [ [link removed] ].


* Taxpayers who have been recent victims of identity theft are asked to report their circumstances to the state Treasury Department. Reporting identity theft helps thwart cybercriminals who attempt to file returns and steal state tax refunds. To learn more about tax-related identity theft, go to www.michigan.gov/identitytheft [ [link removed] ].

For the 2022 filing season, the state Treasury Department processed more than 5.2 million 2021 tax year individual income tax returns, with a typical refund around $650. Most timely filed refunds for the 2021 tax year have been processed.


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PODCAST: End-of-Year Tax Tips and Your Small Business

Podcast Graphic

Join Michigan's State Treasurer?*Rachael Eubanks*?and guest?*Scott Lonberger*, director of Treasury?s Tax Administration Services Bureau, to learn more about end-of-year tax preparation for small businesses and entrepreneurs. ?

Podcast guest Scott Lonberger has been with the Michigan Department of Treasury for 21 years serving in various capacities related to contract administration, municipal finance, property taxation and since 2012, as the Director of the Tax Administration Services Bureau. Scott is a licensed attorney with degrees from Purdue University and Western Michigan University Cooley Law School.

Listen now:?[link removed]

*TAX RESOURCES for Your Small Business*:


* Small Business and Self-Employed Tax Center [ [link removed] ]?(IRS)
* Michigan Treasury Online [ [link removed] ]?(sign up for an MTO account to file, pay, and manage your business taxes)
* Michigan.gov/taxes [ [link removed] ]?(for a variety of business taxes information)
* Michigan.gov/treasuryoutreach [ [link removed] ]?(sign up for future outreach notifications)
* Etreas.michigan.gov/bt [ [link removed] ]?(for business taxpayers to submit account questions)
* Etreas.michigan.gov/tp [ [link removed] ]?(for tax professionals to submit account questions)

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Notice Concerning Inflation Adjusted Fuel Tax Act and Applicable to IFTA Motor Carriers That Will Take Effect on January 1, 2023

Facts and Figures

As required by Public Act 176 of 2015, the Michigan Department of Treasury issues this notice to announce the inflation-adjusted tax rates imposed on each gallon (or gallon-equivalent) of motor fuel and alternative fuel under the Motor Fuel Tax Act ("MFTA"), MCL 207.1001?"et seq", and the Motor Carrier Fuel Tax Act ("MCFTA"), MCL 207.211?"et seq", that will be effective January 1, 2023.

Under subsection 8(1)(c) of the MFTA, MCL 207.1008(1)(c), the Department must annually update the tax rates applicable to each gallon of motor fuel by an inflation adjustment equal to the lesser of: 5% or the "inflation rate" (as defined in MCL 207.1003(l)), rounded to the nearest 1/10 of a cent.

Based on data released through October 13, 2022, by the United States Department of Labor, the Department has determined that the inflation rate applicable to the MFTA tax rates effective January 1, 2023, is 7.9%. Accordingly, the inflation-adjusted tax rate imposed on motor fuel under the MFTA for the tax period beginning January 1, 2023, through December 31, 2023, is?*28.6*?cents per gallon (27.2 cents per gallon x 1.05 = 28.6 cents per gallon).

Because the MFTA tax rate applicable to "alternative fuel" must equal the tax rate imposed on motor fuel, the tax rate applicable to alternative fuel under the MFTA is also?*28.6*?cents per gallon (or per gallon equivalent) for the tax period beginning January 1, 2023, through December 31, 2023.???

Similarly, subsection 2(6) of the MCFTA, MCL 207.212(6), requires that the tax rates imposed under the MCFTA on each gallon or gallon equivalent of motor fuel and alternative fuel, as applicable, consumed on Michigan public roads or highways?must equal the MFTA tax rates imposed on motor fuel and alternative fuel. Therefore, the fuel tax rates under MCL 207.212(6) for motor carriers licensed or otherwise subject to the International Fuel Tax Agreement is?*28.6*?cents per gallon (or gallon equivalent) of motor fuel and alternative fuel for the tax period beginning January 1, 2023, through December 31, 2023.? ?







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This email was sent to [email protected] using GovDelivery Communications Cloud on behalf of: Michigan Department of Treasury ? Lansing, MI 48922 ? 517-335-7508
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