Form 4594 - Michigan Farmland Preservation Tax Credit

4594, Page 4

to remain taxable under the MBT and claim certificated

received from the MDA. Credit for the new FDRA will not be

credits. If a taxpayer properly made this election with either

allowed unless a copy of the recorded agreement is attached to

a certificated farmland preservation agreement or another

the return. If the taxpayer doesn’t get a copy of the recorded

certificated credit and the taxpayer purchases a farm already in

agreement before April 30, file the MBT return without that

agreement. When the FDRA is received, the taxpayer must file

the program then the credit will only be processed if the name

on the farmland preservation agreement on file with the MDA

an amended MBT return to include the agreement.

IS THe SAMe nAMe AS on TAxPAyeR’S DeeD. The

NOTE: A taxpayer may not amend to revoke the election to

taxpayer must prorate the 2013 taxes for the period the land

remain taxable under the MBT. Once the taxpayer makes a

was owned and claim the credit based only on those taxes.

valid election to claim a certificated credit, the taxpayer must

Line-by-Line Instructions

remain in the MBT until the credit and any carryforward of

that credit are exhausted.

Lines not listed are explained on the form.

Jointly Payable Checks

Dates must be entered in MM-DD-yyyy format, unless

otherwise instructed.

The taxpayer should take the check, check stub, and a copy

of the FDRA(s) to the county treasurer(s) who will have the

line 1: Tax year of claim. Enter the ending month, day, and

taxpayer endorse the check and then use the refund to pay any

year of the annual accounting period in which this credit is

delinquent taxes. Any remaining amount will be returned to

claimed.

the taxpayer.

ExamplE: A participant with a tax year ending

December 31 claims a credit for the 2013 property taxes in the

Property Taxes That Can Be Claimed for Credit

tax year ending in December 2013.

The property taxes levied in 2013 on enrolled land are eligible

for the 2013 credit, regardless of when they are paid.

line 2: Country Code: If other than the United States, enter

the country code. See the list of country codes in the MBT

Ad valorem property taxes that were levied in 2013, including

Instruction Booklet for Standard Taxpayers (Form 4600)

collection fees up to 1 percent of the taxes, can be claimed for

available on our Web site at

credit. Special assessments (those not based on taxable value),

line 3: enter the entity’s six-digit north American Industry

penalties, and interest cannot be claimed.

Classification System (nAICS) code. For a complete list of

Taxes on land not eligible for either the principal residence

six-digit nAICS codes, see the U.S. Census Bureau Web site

or qualified agricultural property exemptions most likely are

at , or enter the same

not eligible for the Farmland Preservation Tax Credit. The

nAICS code used when filing the entity’s U.S. Form 1120,

exception is rental property where the tenant spends at least

Schedule K, U.S. Form 1120S, U.S. Form 1065, or U.S. Form

1,040 hours per year participating in the farming operation. To

1040, Schedule C.

compute the taxes that can be claimed for credit, exclude the

line 6: Check the box that describes the organization type. A

school operating tax and multiply the balance by the percentage

Trust or Limited Liability Company (LLC) should check the

of exemption allowed by the local taxing authority.

appropriate box based on its federal return.

ExamplE:

PART 1: GROSS RECEIPTS QUALIFICATION

Taxes levied

$2,000

School operating tax

$350

Applies only to agreements entered into on or after

January 1, 1978.

Principal residence exemption

60%

If agreements were entered into on or after January 1, 1978,

$2,000

$1,650

eligibility for a Farmland Preservation Tax Credit must be

350

determined using one of the two qualification formulas

60%

$990 can be claimed for credit

provided below. If all agreements began before January 1, 1978,

$1,650

skip to Part 2.

If the taxpayer has entered into more than one FDRA with

ImpOrTaNT: once a qualification formula is elected, all

the MDA, the sum of the taxes under each agreement is used

future claims must be filed using that formula.

to compute the credit. The amount of credit the taxpayer will

receive is based on adjusted business income. Taxes levied on

Total receipts Formula on line 13: This formula compares

rental property cannot be claimed for credit unless the tenant is

agricultural gross receipts to property taxes on the enrolled

involved in the farm operation.

land in each of the five tax years preceding the tax year of this

claim. If gross receipts are more than five times property taxes

Claiming a Credit for Farms Purchased in 2013

in at least three of the five tax years, this formula may be used.

That Were Already Enrolled in the Program

average receipts Formula on line 18: This compares the

A taxpayer must have made the election to remain taxable

under the MBT beginning with the taxpayer’s first tax year

average of the agricultural gross receipts for the three tax years

ending after December 31, 2011, in order for the taxpayer

preceding the tax year of this claim to property taxes on the

Form 4594 - Michigan Farmland Preservation Tax Credit - 2014 Page 4

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