Michigan Tax Amnesty And Tax Returns Guide And Instructons Page 26
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41For short-period returns or a part-year shareholder, the
Column H: Enter total dividends received by each
shareholder’s business income must be annualized to
shareholder during the tax year from this business (used
meet this requirement. See page 6.
to determine active shareholders). This includes regular
distributions for an S-corporation.
Note: A person cannot serve as a qualified shareholder
in more than one business.
Column I: Enter salaries, wages and director’s fees from
Form C-8000, line 12 that are attributable to each
Line 5, Compensation and Director’s Fees of All
shareholder or officer.
Shareholders. All corporations, regardless of type,
should add the compensation and director’s fees in
Column J: Enter employee insurance payments and
column K for each shareholder showing ownership in
pensions from C-8000, lines 13 through 15, that are
column E and enter the result on Form C-8043, line 5.
attributable to each shareholder or officer.
Note: You must complete the SBT Statutory
Column L: In determining share of business income, the
Exemption Schedule (Form C-8043) to determine the
Department of Treasury cannot attribute stock ownership
allowable exemption.
between two active shareholders.
Multiply the amount on Form C-8000C, line 6 (sum of
Part 3, Lines 6 and 7. Small Business Credit.
business income and losses) by the percentage in column
Line 6, Compensation and Director’s Fees of Active
G for each shareholder and enter the result in column L.
Shareholders. Add compensation and director’s fees in
Members of a controlled group or affiliated compa-
column K for each active shareholder and enter the result
nies. Multiply the percentage in column G by the sum of
on line 6 and on Form C-8000C, line 7.
the following:
An active shareholder:
- business income on Form C-8000, line 11
- is a shareholder of the corporation, including through
- any capital loss carryover or carryback on Form
attribution, and
C-8000, line 21.
- owns at least 5 percent of outstanding stock, including
- any net operating loss carryover or carryback on Form
through attribution, (column F = 5 percent or more),
C-8000, line 22
and
Remember, percentages in column G must be equal to
- receives at least $10,000 in compensation, director
or greater than those in column E.
fees or dividends from the business (sum of columns H
and K = $10,000 or more).
Part 2, Lines 4 and 5, Statutory Exemption.
For short-period returns or a part-year shareholder, the
Line 4, Qualified Shareholders. S-corporations and
shareholder’s compensation, director fees and dividends
professional corporations, enter on line 4 the number of
must be annualized to meet this requirement. See page 6
shareholders who qualify for the increased exemption.
for complete annualization instructions.
Enter the same number on Form C-8043, line 8a.
Line 7, Compensation and Director’s Fees of Officers.
A qualified shareholder:
Add the compensation and director’s fees in column K
- is a shareholder of an S-corporation or professional
for each officer who is not an active shareholder and
corporation (PC), and
enter the result on line 7 and on Form C-8000C, line 8.
- is a full-time employee of the taxpayer or devotes at
Remember, officers of an S-corporation are not
least 51 percent of his or her time to the business
included in this calculation.
(column D = 51 percent or more), and
Note: If you are filing the Single Business Tax
- owns, without attribution, at least 10 percent of the
Simplified Return (Form C-8044), enter the total of
business (column E = 10 percent or more), and
lines 6 and 7 on line 12 of that form.
- whose share of business income is at least $12,000.
Share of business income = compensation + share of
business income determined without attribution.
46
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