Final update – after further review and call to MI tax help desk, I decided to submit the return with the “let the Michigan Treasury calculate the penalty” checked. I have concluded that TT has implemented the MI-2210 correctly but the MI-2210 form is incorrect. There is no provision in MI-2210 to avoid the penalty when “estimated tax payments are not required”. Michigan requires 2 consecutive years of >$500 tax due before a penalty is assessed. There should be a provision in the penalty section (lines 23-26) which says “if 2023 tax (line 4) was less than $500, enter 0 for penalty”. I hope that the Michigan Treasury agrees and calculates that my penalty is zero.
