Form 4577 - Business Tax Schedule Of Shareholders And Officers

less than the entire tax year, report only the salaries, wages

NOTE: If the space provided in the line 2 columns is not

and director fees attributable while serving as an officer

adequate to list all of the corresponding relationships, attach a

or shareholder. These amounts must be annualized when

separate sheet of paper with the member number from column

determining disqualifiers, but should be reported as actual

O, the corresponding relationship, and the number of the

amounts on this form.

member(s) with that relationship.

NOTE: All compensation must be included, whether or not the

Column T: Check column T for each shareholder listed only

shareholder or C Corporation officer worked in Michigan.

if columns P through S are blank (no attributable relationship

exists).

Column K: Enter employee insurance payments and pensions

that are attributable to each shareholder or C Corporation officer.

PART 3: Small Business Alternative Credit

NOTE: If a shareholder owned stock for less than the entire tax

Line 3: Add compensation and director fees in column L for

year of the corporation, or an officer served as an officer less

each active shareholder and enter the result on line 3 and on

than the entire tax year, report only the employee insurance

Form 4571, line 6.

payments, and pensions that are attributable while serving as

An active shareholder:

an officer or shareholder. These amounts must be annualized

when determining disqualifiers, but should be reported as actual

• Is a shareholder of the Corporation, including through

amounts on this form.

attribution, AND

• Owns at least 5 percent of outstanding stock, including

NOTE: All employee insurance payments and pensions must be

included, whether or not the shareholder of C Corporation officer

through attribution (column E or F = 5 percent or more),

AND

worked in Michigan.

• Receives at least $10,000 in compensation, director fees,

Column L: If any shareholder or officer of a C Corporation

and dividends from the business (sum of columns I and L

has total compensation and director fees in column L of over

= $10,000 or more). Important: For short-period returns

$180,000 after loss adjustment, the C Corporation is not eligible

or a part-year shareholder, compensation, director fees, and

for the Small Business Alternative Credit.

dividends of each individual must be annualized to meet this

Column M: Multiply the percentage in column G by line 5c on

requirement.

the MBT Common Credits for Small Businesses (Form 4571).

Annualizing

UBGs: Multiply the percentage in column G by the sum of the

Multiply each applicable amount by 12 and divide the result

MBT Unitary Business Group Combined Filing Schedule for

by the number of months in the tax year the business operated

Standard Members (Form 4580), Part 2A, lines 30 and 34, plus

or the person was a shareholder. Generally, a business is

capital loss deducted on the federal returns of all members.

considered in business for one month if the business operated

Column N: If any shareholder or officer has total income in

for more than half the days of the month.

column N of over $180,000 after loss adjustment, the taxpayer

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

is not eligible for the Small Business Alternative Credit. If any

is considered to have been in business for 1 month.

shareholder or officer has total income in column N of over

Line 4: Add the compensation and director fees in column L for

$135,000, the taxpayer is not eligible for the Start-Up Business

each C Corporation officer who is not an active shareholder and

Credit.

enter the result on line 4 and on Form 4571, line 7.

PART 2: LIST OF FAMILY MEMBERS AND THEIR

REMINDER: Active shareholders of an S Corporation are

CORRESPONDING RELATIONSHIP TYPE

included in the line 3 calculation, even if the shareholder is also

a C Corporation officer. Because the definition of “officer” for

Columns P through S represent relationships affected by

attribution.

this purpose does not apply to an S Corporation, line 4 will

always be blank for an S Corporation.

For each shareholder listed in Part 1, column A, enter the

Include completed Form 4577 as part of the tax return filing.

corresponding number of the shareholder’s spouse, parent,

child, or grandchild, if any, listed in Part 1, column A.

If more than one number is entered in boxes P through S,

separate numbers with a dash. For example, if a family member

has three children, each child’s member number should appear

in the “Child” column with dashes separating them (“2-3-4”).

Do not use a dash to imply included numbers (such as “5-8”

meaning “5 through 8”), but instead include each member

number (“5-6-7-8”). Do not use commas.

EXAMPLE (SEE THE ATTRIBUTION EXAMPLE ON

THE PREVIOUS PAGE): Kathy Rock’s (6) parents (4 and 5)

work for the company. Kathy will list “4-5” in column Q.

105

Form 4577 - Business Tax Schedule Of Shareholders And Officers - 2014 Page 5

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