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2021 Form 3581, Page 3
Instructions for Form 3581
Michigan Historic Preservation Tax Credit
Purpose For more information see the instructions for Form 4889 and
Form 4584, and General Instructions in the MBT Forms and
To allow the eligible taxpayer to claim the Michigan Historic Instructions for Standard Taxpayers (Form 4600).
Preservation Tax Credit.
A qualified taxpayer may assign all or a portion of its credit to
The credit is reported here and then carried to the appropriate any assignee. The credit assignment cannot be revoked, but an
form, according to the type of taxpayer. Individual and assignee may subsequently reassign a credit, or any portion of
Fiduciary filers carry the figures to the Michigan Individual an assigned credit, to one or more assignees. With the exeption
Income Tax Return (Form MI-1040), and the Fiduciary Income stated below, both the initial assignment of the credit by the
Tax Return (Form MI-1041), respectively. Michigan Business qualified taxpayer to the first assignee(s) and the subsequent
Tax (MBT) filers not asking for a refund of the credit carry reassignment by the first assignee(s) to reassignee(s) must
the figures from this form to the MBT Election of Refund be done in the tax year in which the certificate of completed
or Carryforward of Credits, and Calculation of Historic rehabilitation is issued.
Preservation and Brownfield Redevelopment Carryforward For Basic, Enhanced and Special Consideration credits for
(Form 4584). MBT filers electing to claim a refund of the credit which a certificate of completed rehabilitation is issued for a
must file the Request for Accelerated Payment for the Brownfield tax year beginning after December 31, 2007 and ending before
Redevelopment Credit and the Historic Preservation Credit January 1, 2012, an assignment by a qualified taxpayer of all
(Form 4889), and do not need to file this form. or any portion of a credit allowed may be made within the
12 months immediately succeeding the tax year in which the
What Is the Historic Preservation Tax Credit? certificate of completed rehabilitation is issued.
NOTE: Historic rehabilitation plans will no longer be certified Qualified taxpayers may receive a Basic Michigan Credit
after December 31, 2011. equal to 25 percent of their qualified expenditures. For
This credit provides tax incentives for homeowners, taxpayers eligible for the federal Rehabilitation Credit under
commercial property owners and businesses to rehabilitate Internal Revenue Code (IRC) § 47(a)(2), the Michigan credit
historic resources located in the State of Michigan. is 25 percent of the qualified expenditures less the amount
of the federal credit available. For example, if the amount of
If the credit exceeds the taxpayer’s tax liability, the balance the federal credit available is 20 percent, the state credit is 5
may be carried forward up to ten years. However, for projects percent of the qualified expenditures. The State Historic
for which a certificate of completed rehabilitation is issued Preservation Office (SHPO) provides the form and approves the
for a tax year beginning after December 31, 2008, and for assignment or reassignment of the credit.
which the credit amount allowed is less than $250,000, a
qualified taxpayer may elect to forgo the carry forward NOTE: An assignee may claim an accelerated historic
period and receive a refund of 90 percent of the amount that preservation certificated credit as a refundable credit on Form
exceeds the qualified taxpayer’s tax liability. Such an election 4889 if the assignor had a preapproval letter by January 1,
must be made in the year that a certificate of completed 2012, and a certificate of completion, assignment certificate,
rehabilitation is issued and is irrevocable. The credit, which is or component completion certificate is issued for a tax year
generally nonrefundable, must be claimed in the year that the beginning after December 31, 2011.
certification of completed rehabilitation of the historic resource A qualified MBT taxpayer may qualify for one of two
was issued. additional credits if a taxpayer had a Part 2 approval, approved
NOTE for MBT filers: Beginning January 1, 2012, the historic rehabilitation plan, approved high community impact
preservation credit is available to the extent that a taxpayer had rehabilitation plan, or preapproval letter before January 1, 2012.
a Part 2 approval, approved rehabilitation plan, approved high The Enhanced Credit is equal to a percentage of qualified
community impact rehabilitation plan or preapproval letter expenditures, not to exceed 15 percent, established in a
before by December 31, 2011, but has not fully claimed the preapproval letter issued by SHPO.
credit before January 1, 2012. The Special Consideration Credit is equal to a percentage
Also note: of qualified expenditures, not to exceed 15 percent, recorded
• Credits carried forward from a prior year(s) are not eligible on the Certificate of Completion awarded by SHPO. Special
to be refunded on Form 4889; Consideration Credits are granted to rehabilitation plans
expected to have a high community impact and to have
• Beginning January 1, 2012, certain assigned credits are
significantly greater historic, social, and economic impact than
eligible to be refunded on Form 4889;
those plans that earn Enhanced Credits. The maximum amount
• If a taxpayer elects to claim a certificated historic of Special Consideration Credit that may be claimed during
preservation credit in the year in which the credit is available a tax year is $3,000,000 per project, with the excess being
the credit becomes taxable under the MBT until the qualifying carried forward until used up.
credit and any carryforward of the credit are extinguished.
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