Michigan Tax Amnesty And Tax Returns Guide And Instructons Page 31
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41INSTRUCTIONS FOR C-8009
ALLOCATION OF STATUTORY EXEMPTION, STANDARD SMALL
BUSINESS CREDIT AND ALTERNATE TAX FOR
MEMBERS OF CONTROLLED GROUPS
Purpose: To supplement the C-8000C and the
shareholders, has allocated income after loss adjustment
C-8043 for members of controlled groups.
of more than $115,000 from any one member of the
group, the group is not eligible for the credit.
All controlled groups, including affiliated groups,
Note: For the purposes of computing the statutory
controlled groups of corporations and entities under
exemption and the small business credit, a member of an
common control, must complete this schedule to allocate
LLC is treated as a partner if the LLC is taxed as a
the statutory exemption and calculate the standard small
partnership. For the purpose of computing the statutory
business credit or alternate tax.
exemption only, a member of an LLC is treated as a
Controlled groups are affiliated groups of
shareholder if the LLC is taxed as a corporation.
corporations as defined in the SBT Act or controlled
If claiming either the alternate credit or the standard
groups of corporations as defined in IRC Section 1563.
small business credit, each member must calculate its tax
An affiliated group is two or more corporations, one
before credits on Form C-8000.
of which owns or controls, directly or indirectly, 80
Note: If you are a member of an affiliated group, a
percent or more of the capital stock of the other
controlled group of corporations or an entity under
corporation(s) with voting rights.
common control, the group must sum its members’
Entities under common control are two or more trades
adjusted gross receipts on Form C-8010AGR to
or businesses, whether or not incorporated, under
determine if members of the group need to file. For this
common control as defined in the Internal Revenue
purpose you do not include members whose adjusted
Service Regulation 1.414(c). This includes parent-
gross receipts are less than $100,000 as these members
subsidiary, brother-sister or combined groups of
corporations. See RAB 1989-48 for further information.
are not required to file an SBT return.
An entity must be included in a controlled group if it
However, members whose adjusted gross receipts
was a member of the group for at least one half of the
are less than $100,000 must include their business
days of the entity’s taxable year.
activity when figuring the small business credit on
Exception: Groups of corporations that have received
the C-8009. For these members, report Tax After
approval and are filing a consolidated SBT annual return
Investment Tax Credit on lines 12 and 22 as zero.
do not need to file this schedule unless there are members
Attach a copy of this schedule to each member’s
of the controlled group not included in the consolidated
C-8000 claiming a statutory exemption, standard small
filing.
business credit or alternate tax.
If the group files a consolidated SBT return, compute
All members must choose the same credit calculation,
the small business credit or alternate tax on a
either standard or alternate.
consolidated basis using Form C-8000C.
SMALL BUSINESS CREDIT ELIGIBILITY
Controlled groups as defined in the IRC are not eligible
The standard small business credit and the alternate tax
for the standard small business credit or alternate tax
are not available to members of a controlled group if any
unless the business activities of the entities are
of the following conditions exist:
consolidated, whether or not a consolidated SBT return is
filed. This means the gross receipts, adjusted business
- combined gross receipts on line 11, column D, over
income and tax base of all members of the group must be
$10 million;
combined to determine eligibility and to compute this
- combined adjusted business income on line 10,
credit.
column D, minus loss adjustment, over $475,000;
Only members who have no activity in Michigan are
- a member of the group is an individual (sole
excluded from this calculation.
proprietor) or fiduciary with business income, minus
loss adjustment, over $115,000.
If the combined gross receipts exceed $10 million or
- a member of the group has a partner with distributive
the combined adjusted business income after loss
share of business income, minus loss adjustment,
adjustment exceeds $475,000 or any one individual,
(member’s C-8000KP, column E) over $115,000; or
partner, officer or shareholder, including corporate
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