Michigan Guidance on Bad Debt Deductions

Dec 14th, 2015

The Michigan Department of Treasury updated its guidance on bad debt deductions for sales and use taxes. The guidance explains what a bad debt is, when it can be deducted on a tax return, who can deduct it, and what the procedure is for claiming a deduction. Also, for bad debts incurred before September 30, 2009, bad debt deductions are only available to retailers. For debts incurred on or after that date, both retailers and third-party lenders can claim bad debt deductions.