Form 4577 - Business Tax Schedule Of Shareholders And Officers

Instructions for Form 4577

Michigan Business Tax (MBT) Schedule of Shareholders and Officers

For all Corporations claiming the Small Business Alternative or Start-Up Business Credits

shareholders’ family members, as defined by IRC § 318(a)(1),

Purpose

are considered shareholders and must be listed in Part 1 and

To determine eligibility for all Corporations to qualify for

Part 2 if they receive compensation from the business. List all

shareholders and C Corporation officers who:

the Small Business Alternative Credit. Corporation means a

taxpayer that is required or has elected to file as a Corporation

• Are employees of the Corporation;

under the Internal Revenue Code (IRC).

• Are directors of the Corporation; or

General Instructions

• Own 10 percent or more of the stock of the Corporation,

including those by attribution.

If filing as a Corporation (including Limited Liability

Companies federally taxed as such) and claiming a Small

Shareholder means a person who owns outstanding stock in

Business Alternative Credit, complete this form and include it

the Corporation. An Individual is considered as owning the

as part of the annual return to report:

stock owned, directly or indirectly, by or for family members

as defined by IRC § 318(a)(1). An officer of a C Corporation

• Shareholder and C Corporation officer qualifications for the

includes the chairperson of the board, president, vice president,

Small Business Alternative Credit;

secretary, and treasurer, or persons performing similar duties.

• Compensation and director fees of active shareholders and

Officer means an officer of a corporation other than a

all C Corporation officers for the computation of the Small

subchapter S corporation, including all of the following:

Business Alternative Credit.

(a) The chairperson of the board, (b) The president, vice

NOTE: A member of a Limited Liability Company (LLC) is

president, secretary, or treasurer of the corporation or board,

characterized for MBT purposes as a shareholder if the LLC is

taxed as a corporation for federal purposes.

persons described in subdivisions (a) and (b) that include, at a

NOTE: A federally disregarded entity is required to file as if

minimum, major decision making.

it were a sole proprietorship if owned by an individual, or a

A family member, as defined by IRC § 318(a)(1), includes

branch or division if owned by another business entity.

spouses, parents, children and grandchildren.

This form also is required to be completed and included as

NOTE: Rules of attribution in IRC § 318(a)(1) do not

part of the return whenever a corporation claims a Start-Up

differentiate between an adult and a minor child.

Business Credit. To qualify for the Start-Up Business Credit, the

compensation, director fees, or distributive shares paid by the

Outstanding stock means all stock of record, regardless of

taxpayer to a shareholder of a C Corporation or S Corporation, or

class, value, or voting rights, but outstanding stock does not

an officer of a C Corporation, cannot exceed $135,000.

include treasury stock.

If more lines are needed for listing the shareholders and C

Line-by-Line Instructions

Corporation officers, include additional copies of this form.

Lines not listed are explained on the form.

Complete the taxpayer name and account number on each

copy (and UBG member if applicable), and lines 1 and 2 as

Name and Account Number: Enter name and account number

necessary. If using more than one copy of the form, continue

as reported on page 1 of the MBT Annual Return (Form 4567).

the sequential number system for the Member Number in

columns A, H and O.

Unitary Business Groups (UBGs): Complete one form for

each member that is a corporation (including an entity taxed

NOTE: Rules of attribution in IRC § 318(a)(1) do not

federally as such). Enter the Designated Member name in the

Taxpayer Name field and the member to whom the schedule

differentiate between an adult and a minor child.

applies on the line below. On the copy filed to report the DM’s

Columns B and C: Identify each shareholder (including

data (if applicable), enter the DM’s name and account number

Corporations, Trusts, or Partnerships) and C Corporation

on each line.

officers by name and Social Security number. Corporations,

Trusts, and Partnerships should be identified using the Federal

PART 1: SHAREHOLDERS AND OFFICERS

Employer Identification Number (FEIN) or Michigan Treasury

Line 1 (Columns A through N): In column 1A, assign

(TR) assigned number.

numbers (beginning with 1) to all shareholders and C

Corporation officers in order of percentage of stock ownership

NOTE: Column C: An individual or foreign entity that does

(percentage in column G), starting with the highest percentage

not have a Social Security number or FEIN may enter in

first. (Repeat this numbering in Part 1, line 1H, and Part 2, line

Column C “APPLD FOR” (an abbreviation for “applied for”) or

“FOREIGNUS” (an abbreviation for “foreign filer”).

2O. It is essential that this numbering system is followed.) All

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Form 4577 - Business Tax Schedule Of Shareholders And Officers - 2014 Page 3

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