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Line 3: To claim this credit, attach a copy of the assignment Payments made to a pension plan, retirement or profit
certificate received from MEGA. (If the certificate is not sharing plan, employee insurance plans, and payments
attached, the credit will be disallowed.) under health and welfare benefit plans, as well as the
administration fees paid for the administration of the health
Film Production Credit and welfare benefit plan, are compensation. Compensation
This credit is available to an insurance company as an assignee also includes certain payments made by licensed taxpayers
only. that are statutorily identified. These compensation payments
are calculated on a cash or accrual basis consistent with
The Michigan Film Office, with the concurrence of the State the taxpayer’s method of accounting for federal income
Treasurer, may enter into an agreement with an eligible taxes. The statute provides for certain exclusions from
production company providing the company with refundable a compensation including employee discounts on merchandise
credit against MBT tax liability against or taxes withheld under and services, payments for state and federal unemployment
Chapter the 7 of Michigan Individual Income Tax Act 1967. of compensation and federal insurance contributions, and
A Post-Production Certificate of Completion will be issued payments made independentto contractors.
verifying the amount of the credit to be claimed once the Expense incurred for the benefit theof taxpayer rather than for
Michigan Film Office is satisfied that company expenditures the benefit of employees of the taxpayer is not compensation.
and eligibility are adequately met. Noncompensation expenses might include payments reported
The credit may be assigned in the tax year in which the on a Form 1099 anto employee for the rental of abuilding or
Post-Production Certificate ofCompletion is received but such for interest income.
assignment is irrevocable. The credit must first be claimed in This credit is calculated against the taxpayer’s Michigan
the year assignment. of compensation.
Beginning January 1, 2012, this credit is available as a Compensation is “in this state” if (a) the individual’s service
certificated credit to the extent that the taxpayer has entered is performed entirely within Michigan, or (b) the individual’s
into an agreement with the Michigan Film Office with the service is performed both within Michigan and outside
concurrence ofthe State Treasurer by December 31, 2011, but Michigan, but the services performed outside Michigan are
the credit has not been fully claimed paid or prior toJanuary 1, incidental theto individual’s service within Michigan.
2012. An insurance company assignee must claim this credit
beginning with it’s first tax year ending after December 31, Example 1: Sales Co. employs Salesperson whose territory
2011, inorder to remain taxable under the MBT and claim the includes both Detroit, Michigan, and Toledo, Ohio. Salesperson
credit. calls on customers located in both Michigan and Ohio. The
compensation paid to Salesperson is not “compensation in this
For more information, contact the Michigan Film state” because Salesperson’s activity is not limited solely to
Office at 1-800-477-3456 or visit the Web site at Michigan, and calling on customers inOhio is not incidental to
www.michiganfilmoffice.org. Salesperson’s activity in Michigan.
Line 4: To claim this credit, include a copy of the MBT Film Example 2: Manufacturer employs Engineer at its Michigan
Credit Assignment (Form 4589) theto return. facility. Several times ayear, Engineer travels out of state to meet
PART 2:NONREFUNDABLE CREDITS with suppliers. Although Engineer performs services both within
Michigan and outside Michigan, Engineer’s out-of-state services
Compensation Credit
are incidental to Engineer’s services within Michigan. The
An insurance company may claim a credit equal to a paid to Engineer is “compensation in this state.”
compensation
percentage of compensation in Michigan, not to exceed
65 percent theof insurance company’s tax liability for the tax Renaissance Zone Credit
year after claiming the other credits allowed under Chapter The Renaissance Zone Credit encourages businesses and
2A theof MBT Act. individuals to move into a designated Zone to help revitalize
Line 7: Enter compensation payments made in the tax year the area by providing a credit for businesses located and
on behalf of or for the benefit of employees, officers, or conducting business activity within the Zone.
directors as defined in MCL 208.1107(2). Generally, under Line 15: Complete and include the MBT Renaissance Zone
this definition, compensation includes, but is not limited Credit Schedule (Form 4595) to claim this credit. NOTE the
to, payments that are subject to or specifically exempt or changed instructions for certain taxpayers for line 24 of Form
excepted from withholding under Internal Revenue Code 4595.
(IRC) § 3401 through § 3406.
If located in more than one zone, complete and include a
Compensation also includes fringe benefits and any earnings separate Form 4595 for each zone. Add line 25b from each
that are net earnings from self-employment, as defined under Form 4595 and enter the sum on Form 4596, line 15.
IRC § 402, of the taxpayer or partner or LLC member of the
taxpayer. Wages, salaries, fees, bonuses, commissions, and NOTE:
Although Insurance companies do not normally
other payments made in the tax year on behalf of or for the calculate
business income, or apportion their tax base
benefit of employees, officers, or directors as well as self- by
a sales factor, both are required in the calculation of a
employment earnings must be reported on a cash basis. Renaissance Business Income Worksheet
Zone credit. Use the
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