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Instructions for Form 4896
Corporate Income Tax Unitary Business Group Affiliates Excluded
from the Return of Standard Taxpayers
NOTE: A taxpayer that is a UBG must file a combined return
Purpose
using the tax year of the Designated Member (DM). The
The purpose of this form is to identify every C Corporation combined return of the UBG must include each tax year of each
(or entity taxed federally as such), insurance company, and member whose tax year ends with or within the tax year of the
financial institution that meets the Unitary Business Group DM. For example, Taxpayer ABC is a UBG comprised of three
(UBG) control test of MCL 206.611(6) or is a member of standard members: Member A, the DM with acalendar tax year,
a group for which the Affiliated Group Election of MCL and Members B and C with fiscal years ending March 31 and
206.691(2) is applicable for the tax year but is not included on September 30, respectively. Taxpayer ABC’s tax year is that of
the standard group return supported by this form. its DM.
NOTE: If any entity listed on this form is a member of a Line 1A: If an entity being listed here is listed on
federal consolidated return , attach acopy of federal Form 851. federal Form 851, enter the identifying number for that entity
that is called “Corp. No.” at the left edge of pages 1, 2, and 3 of
Line-by-Line Instructions federal Form 851.
Lines not listed are explained on the form. Line 1D: Reason codes for affiliates being excluded from the
For guidance on UBGs for the purpose of this form, see current combined return:
the “Supplemental Instructions for Standard Members in business activities resulting in a flow of value or
1 Lacks
UBGs” section in the Corporate Income Tax (CIT) Forms integration, dependence or contribution to group.*
and Instructions for Standard Taxpayers (Form 4890)
and the Michigan Department of Treasury Web site at 2 Foreign operating entity.
www.michigan.gov/taxes. 3 Foreign entity.
UBG means a group of United States persons that are 4 Member has no CIT tax year (as a member of this UBG)
corporations, insurance companies, or financial institutions, ending with or within this filing period.
other than a foreign operating entity, that satisfies the control 5 Insurance company. (Insurance companies with nexus
test and relationship test. always file separately.)
is satisfied when one of the persons owns or 6 Financial institution. (Financial institutions and standard
The control test
controls, directly or indirectly, more than 50 percent of the taxpayers generally are not included on the same
ownership interest with voting rights (or rights comparable to combined return.)
voting rights) of the other members. 9 Other.
The relationship test is satisfied in one of two ways: The *NOTE:
Reason code number 1 does not apply to a member
UBG has operations which result in a flow of value between of
an affiliated group that has made the Affiliated Group
the members in the UBG, or has operations that are integrated Election.
with, are dependent upon, or contribute to each other. Flow
A taxpayer is required to retain records to substantiate the
of value is determined by reviewing the totality of facts and
reason(s) for a member’s exclusion from the UBG return.
circumstances of business activities and operations.
If you have questions, call Treasury, Technical Services
If eligible, a UBG may alternatively be determined by way of
Section, at 517-636-4230, to discuss an appropriate entry.
an Affiliated Group Election (see instructions for Form 4891
for the CIT definition of an affiliated group, and for eligibility Line 1E: If this entity has nexus with Michigan, enter an “X”
and other details about the election). The “greater than in this box.
50% test” for the affiliated group may be different than the
Line 1F: Enter the entity’s six-digit North American Industry
traditional control test discussed above, and the affiliated group
Classification System (NAICS) code. For a complete list of six-
is determined without regard to the relationship test discussed
digit NAICS codes, see the U.S. Census Bureau Web site at
above.
www.census.gov/eos/www/naics/ , or enter the same NAICS
The purpose of this form is to identify entities for which the code used when filing the federal Form 1120, Schedule K; or
ownership test is satisfied, but which are not included on the federal Form 1120S.
combined return supported by this form, either because the
Include completed Form 4896 as part of the tax return filing.
relationship test is not satisfied (which is not applicable to
a UBG by affiliated group election) or because the entity
is excluded by statute from the UBG or from the standard
combined return. A member whose business activity is not
included in the current combined return because its tax year
ends after the filing period of the UBG should also be listed
here.
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