When Gov. John Engler first touted the plan a year ago, he said as many as 500,000 taxpayers - about one in 10 - could avoid the hassle of filling out state income tax forms.
But early returns show hardly anyone is signing up, according to yesterday's Lansing State Journal.
"I'm guessing a couple of hundred. That's not a whole lot," said Ron Rhoda, acting revenue commissioner.
Engler made the no-form, no-file plan a centerpiece of his 1996 State of the State address. He hailed it as "America's simplest form" - no form at all.
The governor said it would be of particular benefit to students, renters and others who don't claim credits or many deductions.
But word has been slow to spread, and participation slower still, even at places like Michigan State University.
"The last I checked, there were less than a handful. Two or three," said David Brower, Michigan State controller. "People are just becoming aware of the program."
Rashanda Corley, a Michigan State junior who works at the Holmes Hall reception desk, said she was unfamiliar with the new option.
"I do the 1040-EZ form, and it's not really any trouble. It only takes about 10 minutes or so," she said.
Individual taxpayers who earn less than $100 in interest or non-wage income - or joint filers with less than $200 in non-wage income - are eligible for the no-form option, which took effect this year. All taxpayers have to fill out forms for their 1996 income.
To choose the no-form option for 1997, workers were to have filled out new MI-W4 forms with their employers before the end of their first pay period of 1997. Employers needed to send them to the Treasury Department by Jan. 31.
New employees can still sign up for the option, as can current workers if they have had the right amount of taxes withheld by their employers.
Some tax experts have warned that no-filers may end up paying more than they would if they filed a tax form. To guard against that, the exemption certificate reads that the option "may not be for everyone."
Nonfilers are still eligible for personal exemptions and home-heating credits, but they can't take advantage of others, including the homestead property tax credit.
Seniors who choose the no-file option will still receive an additional $900 personal exemption and the prescription drug credit.
"We expect it to grow as individuals get more information and think about their 1998 tax filing," Deputy Treasurer Madhu Anderson said of the plan. "The more people we have involved, the more they'll tell other people."