The frustration felt by thousands of Michigan taxpayers after a massive IT revamp resulted in letters going out in error and other trouble spots reflected “growing pains,” not a faulty new system, according to Michigan Department of Treasury officials.
Katina Litterini, tax administration services bureau director for Treasury, said the previous 40-year-old mainframe system would not have been able to process 94% of its individual state income tax returns by May 29, as the new system has already done.
“There’s no way the mainframe would be able to process that many returns in this time period,” Litterini told the Detroit Free Press.
“We’re very excited. We like this system, believe it or not,” she said. “And we’re hoping the taxpayers will, too.”
The Michigan Treasury Department took on a major modernization project for its tax filing system in November 2025 by switching to GenTax, a program developed by Fast Enterprises. The Michigan Treasury noted that the modernized system, which is used by many other states, has proved to be successful overall.
“The new system allows for a more effective and efficient administration of Michigan’s Individual Income Tax,” according to Treasury.
As of May 29, Treasury has processed more than 5.09 million individual income tax returns and issued more than $3.39 billion in refunds since the filing season opened on Jan. 26, according to Ron Leix, a Michigan Treasury spokesperson.
What problems did some Michigan taxpayers have in 2026?
All has not gone smoothly — far from it if you talk to some upset CPAs and angry taxpayers as I have this year.
The shift to a new way of doing things triggered some glitches in the past few months that infuriated many tax professionals and taxpayers — including when Treasury sent out 27,000 erroneous “Notice of Adjustment” letters earlier this year. Some taxpayers didn’t know what to do when Treasury suddenly sent them a refund check that they’re pretty sure they weren’t owed. Treasury has not disclosed how many erroneous refund checks were sent; taxpayers were told not to cash them.
Some taxpayers, including retirees, remain upset that they’ve not yet received their income tax refunds. Others don’t understand why some letters they’ve received in the mail are labeled “reminder of tax due” when they’ve already paid what they owed.
Many who want to call Treasury for answers haven’t been able to get through the phone lines. One metro Detroit taxpayer told me she was happy to finally get through to Treasury after a 25-minute wait on hold this past week.
Treasury maintains that the issues are “limited in scope,” indicating that fewer than 4% of the 5 million returns are affected by the issues that have been identified. Yet we’re still looking at somewhat less than 200,000 upset individual filers.
What’s next for curing some tax headaches?
Treasury has apologized for the initial batch of bad letters — and offered some guidance. But it has been a long, frustrating process for many taxpayers in these situations.
As part of the IT revamp, Treasury is adding a new phone system in July for individual taxpayers that increases capacity and adds features to improve customer service. Treasury officials expect that new phone system will alleviate many problems taxpayers have had getting a phone call answered.
As a stopgap, Treasury is providing the opportunity for taxpayers to send a web message or request a callback through Michigan Treasury eServices. The Michigan Treasury stated that its goal is to respond to these requests within three business days.
A few individuals emailed me to let me know that they’re unsure how to sign up for that “Request for Call Back,” but Treasury says many taxpayers are signing up.
On Thursday, May 28, Treasury officials met with leaders and some members of the Michigan Association of CPAs (MICPA) and the Michigan Tax and Accounting Professionals Association (MTAP) in a virtual meeting that ran for about an hour and a half to discuss ongoing concerns and explain new processes that were put in place as part of the IT revamp.
I spoke with Treasury officials for nearly an hour in a virtual meeting on Friday, May 29. Step by step, Treasury officials worked to explain how some of the headaches happened, how the timing for sending some new letters might not have been the best, and what taxpayers might expect next.
“This is a go live, not a go forward situation,” Melissa “Missy” Snyder, individual income tax division administrator for the Michigan Department of Treasury, told the Detroit Free Press.
And she expects much improvement going forward.
While training took place for the new system, she said, it was a complex shift away from the legacy mainframe to the new IT system this year. It’s one thing to follow the steps in training, it’s another to actually put brand new, up-to-date technology into use.
“It’s like going from a flip phone to an iPhone 15,” she said.
She said it’s pretty remarkable that Treasury was able to handle as many returns as it has successfully “with some bumps.”
What to know about a new ‘Reminder of Tax Due’ letter
One issue confusing some taxpayers has been a new “Reminder of Tax Due” letter. Taxpayers never saw such a letter — and frankly, this year, some taxpayers didn’t need this reminder at all.
Snyder said the letter is now is being issued as part of the system changes. It’s designed to be “friendly reminder” or a “heads-up” that a household has yet to pay the state income taxes owed. It’s related to any state income tax debt owed prior to the collection process actually being started.
It makes some sense, as you don’t want to just suddenly receive a collection letter out of the blue. Taxpayers would now get some alert to bridge the gap and warn them that their taxes weren’t paid.
The launch of such a letter, one could argue, might be an improvement in the system. The state just needs to figure out the correct timing for triggering these letters.
Unfortunately, as the system was set up, the timing of these new reminder letters was off the mark, as some letters went out way too early in the tax process this year.
Consider this scenario: A taxpayer files a state income tax return in March and they owe $1,000. They’ve sent in the return when it is done. But they set up an automatic payment through their bank account so that the $1,000 is taken out when the bill is due closer to April 15.
Suddenly, out of the blue, you get a letter of a “Reminder of Tax Due.”
Hey, wait a minute. Why are you getting a letter from Treasury saying you didn’t pay?
Snyder acknowledged that the letters were set to go out at the “go live” with a broad stroke. “If you owe, and you don’t pay at the time after a certain number of days, we’ll send this notice.”
Now, the state plans to adjust the timing of the letter in the future to better take into account how payments are received, including those set up for automatic payment.
Snyder said Treasury received feedback indicating that such letters create more confusion for someone who schedules an electronic funds transfer closer to the due date, as some filers will do.
Technically, Treasury explained, the letters weren’t wrong when they were sent out, but they didn’t reflect the reality that someone had already set up direct payment.
At the end of the tax season, Snyder said, Treasury also noticed that the bank processing was lagging behind the return processing.
“As the returns are coming in, they’re processing very quickly,” she said. “If some payments came with the returns, we would get the return processed and done in the system before we got the money from the bank.”
Such lags also triggered reminder letters being sent out maybe when they didn’t need to be sent out at all.
Taxpayers who are confused about whether they owe money, Snyder said, should check their bank accounts to see whether a payment cleared and review the information in the Michigan Treasury eServices portal. If you see the payment cleared, she said, you do not need to do anything. It’s also key to see whether a payment voucher was included in the letter.
Snyder said the system is properly recording payments, including the payments of estimated taxes made in 2025.
Bob Doyle, president and CEO of the Michigan Association of CPAs, said it’s encouraging that the Treasury met with tax professionals at length to help them better understand what’s going on with the new system.
He totally gets that new phone analogy, too. It’s one thing to see that phone in the store and another figuring out how to use it at home.
Doyle said a lot of lessons were learned by Treasury, as well as tax professionals. He’s encouraged to see Treasury rework its new “Reminder of Tax Due” letter to make it easier for everyone to understand, and see Treasury adjust the timing of sending such letters.
Questions continue to need to be addressed, Doyle said, but he said Treasury plans to have more meetings with tax professionals to keep the dialogue going.
What about missing state income tax refunds in Michigan?
Some taxpayers continue to complain to me that they’ve not received their state income tax refunds, even though they filed in February or March.
Treasury has stated that nearly 90% of returns are processed and refunds issued within the normal four-week to six-week time frame.
About 10% of returns fall into categories that require more time, such as:
When it comes to taxpayers who have yet to receive their state income tax refunds, Snyder noted that the new IT system is more likely to spot missing information or inconsistencies on the return that could be contributing to some delays now.
It’s an enhanced feature that allows for evaluating a return early in the process to determine whether the return is accurate and spot potential fraud. The old mainframe wasn’t as sophisticated, she said.
If information is missing, though, the return could face more delays. Some older adults, she said, may have faced delays when date of births are missing from their state return — or other critical parts of the return aren’t there.
Many of these issues involve filing a paper return, which tend to be more inaccurate or incomplete in general, she said.
But Snyder said some people who used tax software also might have had issues as tax software companies had to deal with the major revamp from Michigan’s legacy system to its new IT system. Some software providers needed to make adjustments, too, in early 2026.
Snyder expects the process should be much smoother next tax season — and even later this year going up to the Oct. 15 deadline for extensions.
Snyder noted that it was a “massive overhaul of a system that was as old as me, I’ll have to admit that.”
Treasury is asking for patience at this point — something that can always be helpful. But patience can be a tough ask for many people who are totally baffled about not seeing their refund cash or knowing what they really owe for their taxes.
“A little bit of patience from the public goes a long way,” Snyder told me.
After running the numbers, she said, it was determined that many repeat callers clogged up the Treasury’s phone lines.
“We had 65 people account for over 11,000 phone calls,” Snyder said. “Those 65 people with their 11,000 attempts to hit our phone system prevent everybody else from getting in.”
“I get it. People want information. We don’t want to deny them information,” she said.
But she noted other options exist for getting information, she said, including the eServices platform; bogging down a phone system exacerbates the problem.
She analyzed the calls from some of the highest callers and one person got through 16 times. “There were days when they got to somebody like three or four times.”
Fingers crossed for taxpayers still dealing with these headaches. No doubt, a new phone system sounds pretty good right about now. I’d say it cannot get here quick enough.
Lansing Bureau Chief Paul Egan contributed.
Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on X @tompor.
This article originally appeared on Detroit Free Press: Michigan Treasury officials offer explanations for taxpayer headaches
Reporting by Susan Tompor, Detroit Free Press / Detroit Free Press
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