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exceed the loss adjustment required on line 9, the taxpayer may

however, the member cannot enter an ABI amount for a tax

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

still calculate a lesser loss adjustment to claim a reduced credit.

the SBAC. The member may, however, enter an ABI amount

Try the calculation more than once. Substitute the numbers

for a tax year that it was not a member of the UBG and it

shown on the chart in the instructions for line 5, in order to

received the SBC or SBAC, regardless of whether the UBG

maximize the claimed SBAC.

received the credit in that same year.

Tax Year Less Than 12 Months: Business income and

When completing the Group Copy for ABI, enter the sum of

shareholder disqualifiers must be calculated on an annualized

the following: 1) UBG’s negative ABI for tax years it received

basis. Enter annualized numbers on lines 1, 4, and 6. Part-year

the SBAC, plus, 2) a member’s negative ABI for a tax year

shareholders also must annualize compensation and report that

when it received the SBC or SBAC and was not part of the

figure on line 6.

UBG. These member amounts are calculated initially at the

Annualizing

member level but used and maintained for use in future years

on the Group Copy for ABI.

To annualize, multiply each applicable amount, ABI, or

shareholder compensation, by 12 and divide the result by the

Line 12: Enter the amount of loss entered on line 11 that

number of months the business operated. Generally, a business

was used as an adjustment in a prior period (including loss

is considered in business for one month if the business operated

adjustment used in SBT periods).

for more than half the days of the month.

UBGs: When completing the Group Copy for ABI, if a

NOTE: If the business was in operation for less than a month it

member’s negative ABI was included on Line 11 (the member

is considered to have been in business for 1 month.

received a credit and was not part of the UBG in the tax year

Line 4: UBGs: When calculating the amount of loss

the credit was received), include any loss adjustment used by

that member in a prior period to offset an ABI disqualifier

adjustment needed to reduce a member’s shareholder income

disqualifier, the member should calculate a pro forma of the

(including loss adjustment used in SBT periods). Also enter any

groupwide loss used against the UBG’s ABI disqualifier in a

MBT Common Credits for Small Businesses (Form 4571) for

the purpose of completing this line.

prior period.

Line 5: Form 4575 should always be calculated initially using

Line 13: Subtract line 12 from line 11 to arrive at loss available

$160,000. This calculation will establish taxpayer eligibility

on the current return. If less than zero, enter zero; no loss is

without the need to reduce the SBAC. However, if the total

available.

loss available for the current year on line 13 does not equal or

UBGs: On the Group Copy for ABI, if the group’s membership

exceed the loss adjustment required on line 9, the taxpayer may

has not changed, that is, no member has joined or left the

still calculate a lesser loss adjustment to claim a reduced credit.

group since the filing of the prior year’s return, the amounts

calculated on line 13 should equal the amounts on line 16 of

Line 5

Eligible % of Credit

the prior year’s corresponding columns. If membership for this

$ 160,000

100% - no reduction

year is different, these amounts may not be the same. See the

$164,999

80%

“Supplemental Instructions for Standard Members in UBGs”

$169,999

60%

section in Form 4600 for details.

$174,999

40%

Line 14: Enter the amount from line 3 or line 9, whichever

$180,000

20%

is larger, in the first column where a loss is available on line

13. In subsequent columns, enter amount from line 15 of the

Part 2: Available Loss

previous applicable column.

Use Part 2 to determine the loss available from the five preceding

periods. Do not enter a negative sign in front of the loss amount.

UBGs: When completing a member’s form for the purpose of

reducing the shareholder income disqualifier, enter the amount

Complete lines 10 through 16 one column at a time. For lines

from line 9.

11 through 16, complete only columns for periods that reported

When completing the Group Copy for ABI, enter the amount

a loss and received an SBC or SBAC.

from line 3.

Line 10: Enter each tax year end date for periods where loss

Line 15: If line 14 is larger than line 13, subtract line 13 from

occurred. Begin with the earliest year in the left column.

line 14. Enter here and on line 14 of the next column where a

Line 11: Enter (as a positive number) the negative ABI from

loss is available on line 13.

Form 4571, line 8, for tax years where an SBAC was received.

Line 16: If line 13 is larger than line 14, subtract line 14 from

Calendar year taxpayers: For SBT tax years, enter the ABI

line 13. This amount is available to use in subsequent periods.

from the SBT Credit for Small Businesses and Contribution

Credits (Form C-8000C), line 9, for each tax year that reported

NOTE: To benefit from a loss adjustment, the total loss

a loss and received an SBC.

available for the current year, line 13, must equal or exceed the

loss adjustment required on line 14.

UBGs: When completing a member’s form, this line is

calculated using member specific (pro forma) data. Note,

The function of this form is to demonstrate that a taxpayer

Form 4575 - Michigan Business Tax Loss Adjustment For The Small Business Alternative Credit - 2012 Page 5

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