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subject to the Severance Tax on Oil or Gas, 1929 PA 48. Also

business for one month if the business operated for more than

enter expenses related to the income derived from a mineral to

half the days of the month. If the tax year is less than one

the extent that income is included on line 21 and that expense

month, consider the tax year to be one month for the purposes

was deducted in arriving at federal taxable income.

of the calculation.

PART 3: TOTAL CORPORATE INCOME TAX

Subtractions from Business Income

Line 28: Calculate this line by using the Small Business

Subtractions are generally available to the extent included in

Alternative Credit Calculation for the Corporate Income Tax

arriving at FTI (as defined for CIT purposes).

worksheet later in these instructions.

Line 18: Enter the distributive share of flow-through income

Retain the worksheet with your tax records. Do not include the

that is included in the taxpayer’s federal taxable income that

worksheet as part of your return.

is received from a flow-through entity that is not member

Include completed Form 4946 as part of the tax return filing.

of a UBG with the taxpayer. Flow-through entities include

Partnerships and S Corporations as well as limited liability

companies that are not taxed as a C Corporation.

For further instruction, see the instructions to Column C of

CIT Non-Unitary Relationships with Flow-Through Entities

(Form 4898).

Line 19: Enter, to the extent included in federal taxable

income (as defined for CIT purposes), any dividends and

royalties received from persons other than United States

persons and foreign operating entities, including, but not

limited to, amounts determined under IRC § 78 or IRC § § 951

to 964.

Line 20: To the extent included in federal taxable income (as

defined for CIT purposes), deduct interest income derived from

United States obligations.

Line 21: Enter on this line income from the production of

oil and gas if that production of oil and gas is subject to the

severance tax on oil and gas, 1929 PA 48, to the extent that

income was included in federal taxable income. Also enter,

income derived from a mineral to the extent included in federal

taxable income.

Line 25: Enter the apportioned amount of distributive share

of flow-through income received by the taxpayer from a

flow-through entity that is not a member of a UBG with the

taxpayer. To calculate this amount, multiply the distributive

share entered on Line 18 by the flow-through entity’s

apportionment percentage. This apportionment percentage is

calculated by dividing the flow-through entity’s MI sales by the

flow-through entity’s total sales. Leave the figure as a decimal,

carrying it out 4 digits to the right of the decimal point.

For further instruction, see the instructions to Columns D and

E of Form 4898.

Line 27: IMPORTANT: If apportioned or allocated gross

receipts, as defined under the MBT, are less than $350,000,

enter a zero on this line. If a business operated less than 12

months, annualize gross receipts to determine if this rule

applies.

Annualizing

Multiply each applicable amount, total gross receipts, adjusted

business income, and shareholder, officer, and partner

income by 12 and divide the result by the number of months

the business operated. Generally, a business is considered in

Form 4946 - Schedule Of Corporate Income Tax Liability For A Michigan Business Tax Filer Page 5

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