- 2 -
|
Instructions for Form 4578, Michigan Business Tax (MBT) Schedule of Partners
For all Partnerships claiming the Small Business Alternative Credit or Start-Up Business Credit
Purpose • Column C: Enter the percentage of profits or capital
interest of this Partnership owned by each partner. If
To determine eligibility for the Partnership’s Small a partner owned this interest for a period less than the
Business Alternative Credit. Partnership means ataxpayer that Partnership’s tax year, multiply that partner’s percentage of
is required to, or has elected to, file as a Partnership for federal ownership by the number of months owned and divide the
income tax purposes. result by the number of months in this Partnership’s tax
This form also is required to be completed and included as year.
part of the return whenever a Partnership claims a Start-Up • Column D: Enter each partner’s distributive share of
Business Credit. A partnership cannot qualify for the Start-Up income, losses, and deductions from U.S. Form 1065 ,
Business Credit if any partner has a distributive share of more Schedule K-1 . Use the Business Income Worksheet
than $135,000. (Worksheet 4746) in the MBT Forms and Instructions for
Standard Taxpayers (Form 4600) to calculate partnership
NOTE: A member of a Limited Liability Company (LLC)
business income. Attach Worksheet 4746 to the filing. Each
is characterized for MBT purposes as a partner if the LLC is
partner’s distributive share includes guaranteed payments
taxed as a Partnership for federal purposes.
to partners that are made to that partner. If any partner has
NOTE: A federally disregarded entity is required to file as if it a share of business income in column D of over $180,000
were a sole proprietorship if owned by an individual, or a branch after loss adjustment, the Partnership is not eligible for the
or division if owned by another business entity. Small Business Alternative Credit. If any partner has a
share of business income in Column D of over $135,000, the
Line-by-Line Instructions Partnership is not eligible for the Start-Up Business Credit.
Lines not listed are explained on the form.
IMPORTANT: For short-period returns, each partner’s share of
Name and Account Number: Enter name and account number business income must be annualized to meet these requirements.
as reported on page 1 of the MBT Annual Return (Form 4567).
Annualizing
If more lines are needed for listing the partners, include Multiply each applicable amount by 12 and divide the result by
additional copies of this form and complete the name, account the number of months the business operated or the person was
number, and line 1 for each copy. a partner. Generally, a business is considered in business for
Unitary Business Groups: Complete one form for each one
month if the business operated for more than half the days
member that is a partnership (including an entity taxed of
the month.
federally as such). Enter the Designated Member name in the NOTE: If the business was in operation for less than amonth it
Taxpayer Name field and the member to whom the schedule is considered to have been in business for 1 month.
applies on the line below. On the copy filed to report the DM’s
data (if applicable), enter the DM’s name and account number Line
2: If multiple pages of Form 4578 are included for one
on each line. separately
filing taxpayer, or one member of a UBG, bring the
total of all line 1C entries to the main Form 4578.
Line 1: Partner Identification
Line 3: If multiple pages of Form 4578 are included for one
• Columns A and B: Identify each partner (including separately filing taxpayer, or one member of a UBG, bring the
Corporation, Partnership, and Trust) by name. Identify total of all line 1D entries to the main Form 4578.
partners who are individuals by Social Security number.
Partners that are Corporations, Partnerships, or Trusts should Include completed Form 4578 as part of the tax return filing.
be identified using a Federal Employer Identification Number
(FEIN) or Michigan Treasury (TR) assigned number.
NOTE: Column B: An individual or foreign entity that does
not have a Social Security number or FEIN may enter in
Column B “APPLD FOR” (an abbreviation for “applied for”) or
“FOREIGNUS” (an abbreviation for “foreign filer”).
100
|