Form 4590 - Business Tax Annual Return For Financial Institutions

Instructions for Form 4590

Michigan Business Tax (MBT) Annual Return for Financial Institutions

the controlling member does not have nexus with Michigan. If

Purpose

that is the case, the controlling member may appoint a group

To calculate a tax liability and claim credits for a financial

member with nexus to serve as the DM.

institution for MBT.

NOTE: The MBT Unitary Business Group Combined Filing

NOTE: Beginning January 1, 2012, only those taxpayers with a

Schedule for Financial Institutions (Form 4752) must be

certificated credit, which is awarded but not yet fully claimed or

completed before completing Form 4590.

utilized, may elect to be MBT taxpayers. If a taxpayer files an

For more information on UBGs, see the instructions for Form

MBT return and claims a certificated credit, the taxpayer makes

4752, available online at the Department of Treasury (Treasury)

the election to file and pay under the MBT until the certificated

Web site at

credit and any carryforward of that credit are exhausted.

For more information on the control and relationship tests for

General Instructions

UBGs, see Revenue Administrative Bulletin (RAB) 2010-1

Michigan Business Tax-Unitary Business Group Control Test

MBT Liability: Beginning January 1, 2012, a taxpayer

and RAB 2010-2 Michigan Business Tax-Unitary Business

calculates MBT liability as the greater of MBT liability after

Group Relationship Tests on the Treasury Web site.

of all credits, deductions, and exemptions or hypothetical CIT

NOTE: Under the foregoing definition, a UBG may include

liability minus deductions and credits available under that act

and minus certificated credits allowed under the MBT. This

financial institutions, insurance companies, and standard

calculation of liability requires a taxpayer to calculate net

taxpayers. A group containing a mixture of these three

taxpayer types may be required to file two or more returns to

equity tax base and apply available MBT credits, including

certificated credits, deductions, and exemptions available

properly report the activities of the different taxpayer types

under the MBT. Then, the taxpayer will calculate the CIT

within the group.

comparison on Form 4975, Schedule of Corporate Income

Under Michigan Compiled Law (MCL) 208.1261(f), financial

Tax Liability for a Financial Filer. A taxpayer is permitted to

institution means any of the following:

reduce hypothetical CIT liability by all deductions and credits

i. A bank holding company, a national bank, a state chartered

which would be allowed under that tax as well as the amount

of certificated credit allowed under the MBT. The amount

bank, an office of thrift supervision chartered bank or thrift

of certificated credit allowed under the MBT is the amount

institution, or a savings and loan holding company other than a

diversified savings and loan holding company as defined in 12

of nonrefundable credit needed to offset MBT liability or the

entire amount of a refundable credit.

United Stated Code (USC) 1467a(a)(F) or a federally chartered

Farm Credit System institution.

If the taxpayer’s hypothetical CIT liability would be higher

ii. Any entity, other than an entity subject to the tax imposed

than its MBT liability, the taxpayer will add the difference to

under Chapter 2A (insurance company), who is directly or

MBT liability on line 31 of this form (4590). This is the CIT

indirectly owned by an entity described in (i) and is a member

adjustment. If the result of both steps of the calculation is a

of the UBG.

negative number, the taxpayer will receive a refund of the lower

iii. A UBG of entities described in (i) or (ii), or both.

negative; but a nonrefundable credit cannot be used to reduce

liability below zero. Remaining nonrefundable certificated credit

NOTE: Because the definition of financial institution for MBT

may be carried forward to succeeding tax years.

purposes includes any entity (except an insurance company) that

is owned by a bank or other entity (as described above) and is

Special Instructions for Unitary Business Groups

a member of a UBG with its parent, this may cause an entity

that is not commonly thought of as a financial institution to be

A Unitary Business Group (UBG) is a group of United States

defined as one for return filing purposes. A UBG of financial

persons, other than a foreign operating entity, that satisfies the

institutions must file a combined return on this Form 4590 that

following criteria:

includes each member of the group that is a financial institution.

• One of the persons owns or controls, directly or indirectly,

Taxpayer Certification

more than 50 percent of the ownership interest with voting

A return filed by a UBG must be signed by an individual

rights (or rights comparable to voting rights) of the other

United States persons; AND

authorized to sign on behalf of the DM. Provide the telephone

number of that individual at the DM’s office.

• The UBG has operations which result in a flow of value

between persons in the UBG or has operations that are

Line-by-Line Instructions

integrated with, are dependent upon, or contribute to each

Lines not listed are explained on the form.

other. Flow of value is determined by reviewing the totality of

facts and circumstances of business activities and operations.

Dates must be entered in MM-DD-YYYY format.

All financial institution members of a UBG must file a

For periods less than 12 months, see the “General Information

combined Form 4590 for the group with a Designated Member

for Standard Taxpayers” in the MBT Forms and Instructions

(DM) who must be the controlling member of the group, unless

for Financial Institutions (Form 4599).

Form 4590 - Business Tax Annual Return For Financial Institutions - 2012 Page 3

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