Form 3581 - Michigan Historic Preservation Tax Credit

Instructions for Form 3581

3581, Page 3

Michigan Historic Preservation Tax Credit

Purpose

Form 4584, and General Instructions in the MBT Forms and

Instructions for Standard Taxpayers (Form 4600).

To allow the eligible taxpayer to claim the Michigan Historic

A qualified taxpayer may assign all or a portion of its credit

Preservation Tax Credit.

to any assignee. The credit assignment cannot be revoked,

The credit is reported here and then carried to the appropriate

but an assignee may subsequently reassign a credit, or any

form, according to the type of taxpayer. Individual and

portion of an assigned credit, to one or more assignees. Both

Fiduciary filers carry the figures to the Michigan Individual

the initial assignment of the credit by the qualified taxpayer

to the first assignee(s) and the subsequent reassignment by the

Income Tax Return (Form MI-1040), and the Fiduciary Income

first assignee(s) to reassignee(s) must be done in the tax year in

Tax Return (Form MI-1041), respectively. Michigan Business

Tax (MBT) filers not asking for a refund of the credit carry

which the certificate of completed rehabilitation is issued.

the figures from this form to the MBT Election of Refund

Qualified taxpayers may receive a Basic Michigan Credit

or Carryforward of Credits, and Calculation of Historic

equal to 25 percent of their qualified expenditures. For

Preservation and Brownfield Redevelopment Carryforward

taxpayers eligible for the federal Rehabilitation Credit under

(Form 4584). MBT filers electing to claim a refund of the credit

Internal Revenue Code (IRC) § 47(a)(2), the Michigan credit

must file the Request for Accelerated Payment for the Brownfield

is 25 percent of the qualified expenditures less the amount

Redevelopment Credit and the Historic Preservation Credit

of the federal credit available. For example, if the amount of

(Form 4889), and do not need to file this form.

the federal credit available is 20 percent, the state credit is 5

percent of the qualified expenditures. The State Historic

What Is the Historic Preservation Tax Credit?

Preservation Office (SHPO) provides the form and approves the

assignment or reassignment of the credit.

NOTE: Historic rehabilitation plans will no longer be certified

NOTE: An assignee may claim an accelerated historic

after December 31, 2011.

preservation certificated credit as a refundable credit on Form

This credit provides tax incentives for homeowners,

4889 if the assignor had a preapproval letter by January 1,

commercial property owners and businesses to rehabilitate

2012, and a certificate of completion, assignment certificate,

historic resources located in the State of Michigan.

or component completion certificate is issued for a tax year

If the credit exceeds the taxpayer’s tax liability, the balance

beginning after December 31, 2011.

may be carried forward up to ten years. However, for projects

A qualified MBT taxpayer may take one of two additional

for which a certificate of completed rehabilitation is issued

credits if a taxpayer had a Part 2 approval, approved

for a tax year beginning after December 31, 2008, and for

rehabilitation

plan,

approved

high

community

impact

which the credit amount allowed is less than $250,000, a

rehabilitation plan, or preapproval letter before January 1, 2012.

qualified taxpayer may elect to forgo the carry forward

The Enhanced Credit is equal to a percentage of qualified

period and receive a refund of 90 percent of the amount that

exceeds the qualified taxpayer’s tax liability. Such an election

expenditures, not to exceed 15 percent, established in a

must be made in the year that a certificate of completed

preapproval letter issued by SHPO.

rehabilitation is issued and is irrevocable. The credit, which is

The Special Consideration Credit is equal to a percentage

generally nonrefundable, must be claimed in the year that the

of qualified expenditures, not to exceed 15 percent, recorded

certification of completed rehabilitation of the historic resource

on the Certificate of Completion awarded by SHPO. Special

was issued.

Consideration Credits are granted to rehabilitation plans

NOTE for MBT filers: Beginning January 1, 2012, the historic

expected to have a high community impact and to have

significantly greater historic, social, and economic impact than

preservation credit is available to the extent that a taxpayer had

a Part 2 approval, approved rehabilitation plan, approved high

those plans that earn Enhanced Credits. The maximum amount

community impact rehabilitation plan or preapproval letter

of Special Consideration Credit that may be claimed during

before by December 31, 2011, but has not fully claimed the

a tax year is $3,000,000 per project, with the excess being

credit before January 1, 2012.

carried forward until used up.

NOTE: If the resource is sold or the certification of completed

Also note:

rehabilitation or preapproval letter is revoked less than five years

• Credits carried forward from prior year are not eligible to be

after the historic resource is placed in service, a percentage of

refunded on Form 4889;

• Beginning January 1, 2012, certain assigned credits are

the credit may be subject to recapture. If the credit has been

assigned, the recapture is the responsibility of the assignor.

eligible to be refunded on Form 4889;

• A taxpayer that elects to claim a certificated historic

Eligibility

preservation credit in the year in which the credit is available

The Michigan Historic Preservation Credit is available to

becomes taxable under the MBT until the qualifying credit and

eligible assignees, owners or long-term lessees of qualified

any carryforward of the credit are extinguished.

historic resources who undertake rehabilitation projects that are

certified by SHPO.

For more information see the instructions for Form 4889 and

Form 3581 - Michigan Historic Preservation Tax Credit - 2012 Page 3

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