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2021 807, Page 8
flow-through entity tax annual return. However, participants’ Line-by-Line Instructions
credits for this tax year are limited to only credits generated Lines not listed are explained on the form.
by the flow-through entity filing this composite return based Line 5: Enter ordinary income or (loss) from U.S. Form 1065,
on the filer’s FTE annual tax return. Do not include credits line 22 or U.S. Form 1120S, line 21.
generated by any other electing flow-through entity. The credits Line 10: Enter the apportionment percentage from
should include the following: Form MI-1040H. See MI-1040H instructions on determining
1. For FTE tax levied on the filer’s current tax year, report the apportionment percentage and for information regarding
each participant’s share of FTE tax paid by the filer income tax nexus standards.
through the fifteenth day of the third month after the filer’s Line 13: Enter the Michigan-sourced income from
tax year end. non-electing flow-through entities, if any, that was reported
2. For FTE tax levied on the filer for any previous tax year, on the filer’s Michigan flow-through entity tax annual return.
report each participant’s share of that tax paid during the Line 14: The amount on this line should equal the total of
current tax year excluding any amount reported in item lines 15, 16 and 17.
number 1.
Complete Schedule A, Schedule of Participants and if
Example: FTE is a calendar year taxpayer and timely paid
applicable, Schedule B, Schedule of Nonparticipants
$1,000 in quarterly estimated tax payments for Year 1. FTE also
and Schedule C, Schedule of Michigan Residents before
requested and received an extension of time to file the Year 1
continuing to line 15.
FTE tax annual return. When filing the Year 1 FTE tax annual
return on September 30, Year 2, FTE determined that tax was Line 15: Carry the total from Column 2 of the Schedule C,
owed and paid an additional $600 in tax, plus $200 in combined Schedule of Michigan Residents to this line.
penalty and interest. Members X and Y each own 50% of FTE Line 16: Carry the total from Column 2 of the Schedule B,
and participate on a composite return for Year 1. Their credits Schedule of Nonparticipants to this line.
are based on each member’s share of the $1,000 in taxes levied Line 17: Carry the total from Column 2 of the Schedule A,
for Year 1 and paid as of March 15, Year 2, $500 each. Even Schedule of Participants to this line.
though the additional $600 tax payment was paid toward FTE’s Line 22: Multiply line 21 by the tax rate on line 22. The tax
Year 1 liability and by the extended due date of that return, that should reconcile to the grand total from Column 3 of the
payment is not eligible for a Year 1 credit. Instead, that payment Schedule A,Schedule of Participants .
may be claimed as a credit by members on their Year 2 annual Line 23: Enter the total of participants’ allocated share of
return. The $200 payment attributable to penalty and interest is flow-through entity tax reported on Schedule A, Schedule of
not eligible to be claimed for the credit in any tax year. Participants, Column 4.
Complete additional copies of Schedule A as needed. Subtotal Line 25: This line is for amended returns only. Enter the
each schedule and include the grand totals of Columns 2, 3 refund and/or credit forward amount received on the original
and 4 on the first page of the schedule. Carry the grand total return as a negative number. Enter the amount paid with
of Column 2 to line 17. The grand total of Column 3 should the original return as a positive number. Do not include any
reconcile to line 22. Carry the grand total of Column 4 to interest or penalty paid with the original return.
line 23.
Line 26: Pay. If the total of lines 23, 24 and 25 is less than
Schedule B, Schedule of Nonparticipants:
line 22, enter the balance of the tax due. This is the tax owed
Complete this schedule for all nonparticipants that are not with the return. Enter any applicable penalties and interest in
Michigan residents. If intermediate FTEs are participating the spaces provided. Add tax, penalty and interest together and
on the composite return, the filer must only report the enter the total on this line. Make the check payable to “State of
income attributable to nonparticipants on Schedule B. If a Michigan.” Write the filing company’s FEIN, “Composite
C corporation or an entity that files federally as a Return” and the tax year on the front of the check. To ensure
C corporation has an interest in the filing FTE, report the accurate processing of the return, remit payment for this return
income here. Reporting this income is for reconciliation only. Estimated tax payments should be remitted separately
purposes only and is not used to compute a Corporate Income with MI-1041ES vouchers. If the balance due is less than $1, no
Tax (CIT) liability. Complete additional copies of Schedule B payment is required. To compute applicable penalty and interest
as needed. Subtotal each schedule and include the grand total visit www.michigan.gov/iit.
of Column 2 on the first page of the schedule. Carry the grand
Line 29: Refund. If the total of lines 23, 24 and 25 is more
total of Column 2 to line 16.
than line 22, the overpayment will be refunded. Treasury will
Schedule C, Schedule of Michigan Residents:
not refund amounts less than $1.
Complete this schedule for Michigan residents. A Michigan
resident may not participate on a composite return. If Mail completed returns to:
intermediate FTEs are participating on the composite return, Michigan Department of Treasury
the filer must only report the income attributable to Michigan P.O. Box 30058
residents on Schedule C. Reporting this income is for Lansing, MI 48909
reconciliation purposes only. Complete additional copies of
Schedule C as needed. Subtotal each schedule and include the
grand total of Column 2 on the first page of the schedule. Carry
the grand total of Column 2 to line 15.
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