Form 807 - Michigan Composite Individual Income Tax Return - 2014 Page 6
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92014 807, Page 6
Instructions for Form 807, Michigan Composite Individual Income Tax Return
member(s) of the intermediate FTE. An intermediate FTE
Filing a Return
may not participate on behalf of an ultimate member that is
This form is used to report and pay individual income tax
a Michigan resident, a C corporation, or an entity that has
under Part 1 of Public Act 281 of 1967, as amended. It is
elected to file federally as a C corporation.
a collective individual income tax filing of the members
A composite return cannot be filed if less than two of the
participating, filed by a flow-through entity (FTE) on behalf of
members elect to participate in the composite filing.
those members. This return is not an entity-level filing for tax
Due Date of Return
imposed on the FTE. An FTE is defined as an S corporation,
a general partnership, a limited partnership, a limited liability
The 2014 composite return is for filers whose tax year ends in
partnership, or a limited liability company that is not taxed as a
2014. If the FTE’s tax year does not end in 2014, do not use
C corporation for federal income tax purposes.
this form. Use the appropriate year that corresponds to the
An FTE is not required to file a Composite Individual Income
year the ultimate owner will include the income in their federal
Tax Return (Form 807). Members of an FTE may elect to
individual income tax filing.
have the FTE file a composite return in lieu of members filing
The composite return for any tax period ending in 2014 is due
Individual Income Tax Returns (Form MI-1040). An FTE that
April 15, 2015. The return for any period ending in 2015 will be
does business in Michigan may file this return if it is filing on
due April 15, 2016.
behalf of two or more nonresident individual or trust partners,
If the FTE cannot file by the due date, a request for an
shareholders, or members. An FTE in a tiered structure may
extension can be filed before the original due date. See
also be eligible to file a composite return (see below). An FTE
“Requesting an Extension” on page 7.
may not file on behalf of a member that is a C corporation or a
member that files federally as a C corporation.
Withholding Tax Payments
The individual income tax filing obligation of a member is
FTEs are required to make withholding tax payments on behalf
satisfied when the member participates in a composite filing so
of all nonresident individual members (both participating and
long as the member has no other Michigan-sourced income.
nonparticipating) regardless of whether the FTE will file a
The filing entity and participating members must agree
composite return.
to comply with the participation and reporting to member
There are separate withholding requirements for members that
requirements as described in these instructions.
are corporations and other FTEs. For more information on
these requirements, see the instructions in the Flow-Through
Tiered Entities
Withholding Reconciliation Booklet (Form 5014) or visit
An FTE is in a tiered structure if it has one or more members
that are other FTEs. A tiered structure consists of a source
FTEs that are on a calendar year basis must withhold
FTE and one or more intermediate FTEs. In this arrangement,
and file quarterly by April 15, July 15, October 15, and
the intermediate FTE receives income from the source FTE
January 15. FTEs that are not on a calendar year must withhold
and the income is passed through to the intermediate FTE’s
and file quarterly returns on the appropriate due dates that, in
members. When a source FTE files a composite return on
the FTE’s fiscal year, correspond to the calendar year. Fiscal
behalf of its nonresident individual and trust members, an
year filer due dates apply regardless of the tax years of the
intermediate FTE may elect to participate in the composite
members.
filing. An intermediate FTE may participate only to the extent
The Michigan Annual Flow-Through Reconciliation Return
that the ultimate members in its tiered structure are nonresident
(Form 4918) must be filed before any Michigan withholding
individuals or trusts. An intermediate FTE may not report its
can be claimed.
own directly-generated income (loss) on the source FTE’s
composite return.
Reporting to Members
Participation Requirements
An FTE filing Form 807 must report to each nonresident
member that participates in the composite filing the following
The composite return is an individual income tax return and
information:
should be filed only on behalf of nonresident members subject
to Michigan individual income tax.
• FEIN of the FTE
A member may not participate in this return if the member:
• Tax year of the FTE
• Was a Michigan resident (full-year or part-year)
• That member’s distributive share of business income as well
• Wishes to claim more than one Michigan exemption
as other taxable income of the FTE that has been allocated
• Is a C corporation or has elected to file federally as a C
or apportioned to Michigan. This will be the amount from
Schedule A, Schedule of Participants, Column 1.
corporation
• That member’s share of tax liability on the composite return
• Is an intermediate FTE and filer cannot identify the name,
filed by the FTE (not the amount withheld on behalf of
address, account number, distributive share of Michigan
the member). The amount reported to a participant should
income and withholding paid on behalf of the ultimate
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