Looking for a Michigan Department Of Treasury Forms And Templates? Download it for free!

Instructions for Form 4575, Michigan Business Tax (MBT) Loss Adjustment

for the Small Business Alternative Credit

Copy for ABI) and allocated income (separate member copy)

Purpose

disqualifiers. For years in which a member was not part of the

To reduce the adjusted business income (ABI) or shareholder

UBG, the UBG will use that member’s available loss from those

allocated income to qualify for the Small Business Alternative

separate years on a first-in, first-out basis until those losses are

Credit (SBAC) or minimize the reduction percentage required.

consumed or extinguished.

If the ABI was less than zero in any of the five years

If one or more members exceed the shareholder income

disqualifier, only those members with shareholder income

immediately preceding the tax year for which a credit is being

disqualifiers must file a Form 4575, using member-only (pro

claimed, and the taxpayer received an SBAC under MBT for

forma) figures in lines 4 through 16 on each member form.

that same year, the taxpayer may adjust for the loss before

figuring eligibility for the SBAC. Business income for credit

If the UBG’s ABI exceeds the threshold, one Form 4575 must be

purposes is adjusted by using available loss from prior years

filed to determine the UBG’s business income loss adjustment,

on a first-in, first-out basis until those losses are extinguished.

which will be calculated on a group basis (the Group Copy for

A loss adjustment will not affect a reduction to the SBAC

ABI, detailed below). For years in which a member was not part

based on gross receipts that exceed $19,000,000. Also, it will

of the UBG, the UBG will use that member’s available loss from

not change the amount of compensation in column L for a C

those separate years on a first-in, first-out basis until those losses

Corporation on the MBT Schedule of Shareholders and Officers

are extinguished. These amounts are calculated initially at the

(Form 4577).

member level but used and maintained for use in future years on

NOTE: Use Part 2 to determine the loss available from the

the Group Copy for ABI. Supporting 4575 forms must be filed

five preceding periods. Calendar year taxpayers will use

by each member who has a loss available from the separate years

the five years prior to the tax year: 2012, 2011, 2010, 2009 and

that is used against the UBG’s ABI disqualifier (member forms).

2008. Fiscal year taxpayers will calculate using the short period

For members who do not exceed the credit’s shareholder income

threshold, only Part 2, lines 10 through 13, of Form 4575 need

beginning January 1, 2012 and ending in 2012, the short period

ending December 31, 2011, and the fiscal years ending in 2011,

to be completed on the member form. For members who also

2010 and 2009.

exceed the credit’s shareholder income threshold, lines 4 through

16 of the member form must be completed. Member forms must

NOTE: Although this form is formatted for Corporations, it

be completed using member-only figures.

can be used by other types of entities with minor adjustments.

Shareholder Income Disqualifier

See instructions for further details.

Any member whose shareholder income creates a partial

Special Instructions for Unitary Business

or complete disqualification, and that has loss available to

Groups (UBGs)

resolve that disqualification in whole or in part, must file Form

4575. Leave lines 1 through 3 blank. Complete line 4 (using

The ABI disqualifier must be calculated by the UBG by

a pro forma figure) and lines 5 through 16, all with data for the

combining the ABIs of its members. Likewise, to reduce

an ABI disqualifier of the UBG, loss adjustment must be

reporting member only. For years that the member was part of

the UBG, pro forma figures will be entered in lines 11 through

calculated on a group level and used against the group’s ABI.

13; however, the member cannot complete these lines for a tax

Loss used at the group level is independent of the loss available

year that it was part of the UBG and the UBG did not receive

at the member level.

the SBAC. The member may complete these lines for a tax year

Disqualifiers based on shareholder or partner allocated income

that it was not a member of the UBG and it received the SBAC,

must be determined on a member by member basis. If any

regardless of whether the UBG received the credit in that same

year. Lines 14 through 16 on the member’s Form 4575 will reflect

shareholder or partner has allocated income in excess of

$180,000, the loss adjustment must be calculated on a member

the usage of loss adjustment to resolve the allocated income

disqualifier only. The use of loss adjustment to resolve the ABI

by member basis for any and all members for which it may

apply. Loss used at a member level does not reduce the group’s

disqualifier will be maintained on the Group Copy for ABI.

available loss.

NOTE: If any member still has a total disqualification on this

NOTE: Members with available loss adjustment must complete

basis (greater than $180,000) after completing its own Form

a copy of Form 4575 using member data, referred to here as a

4575 as described above, the UBG is disqualified from the

SBAC. Do not proceed with these instructions. However, if each

member copy or member form. The combined UBG member

data is displayed on a separate Form 4575 identified as “Group

member’s shareholder income disqualification is fully resolved

Copy for ABI.” Details regarding the forms are addressed

or reduced to a partial disqualification by this method, continue

below to compute the groupwide ABI loss adjustment required.

further in these instructions.

NOTE: The usage of loss adjustment for one disqualifier does

Adjusted Business Income Disqualifier

not affect the available loss adjustment for the other disqualifier.

This disqualifier is calculated at the group level. If the UBG

This form will accommodate the separate maintenance of loss

has ABI in excess of $1,380,600, the UBG must complete one

adjustment available for the UBG for both the ABI (Group

Form 4575 - Michigan Business Tax Loss Adjustment For The Small Business Alternative Credit - 2013 Page 3

Related Articles

Related forms

Related Categories