Michigan Tax Amnesty And Tax Returns Guide And Instructons Page 32
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41- a member of the group has a shareholder or officer
until the end of the latest tax year in the group.
with allocated income, minus loss adjustment, over
Members with earlier tax years may:
$115,000. Allocated income is computed on Form
1. request an extension; or
C-8000KC.
2. file the SBT returns without claiming either the
A reduction to the small business credit is required if
statutory exemption or the small business credit.
an individual, a partner in a partnership, or a shareholder
Determine the exemption allocation and credit when
or officer of a corporation has allocated income, after
the member having the latest year end completes its tax
loss adjustment, between $95,000 and $115,000.
year. Other members must then amend their returns to
Where the allocated income, after loss adjustment, is
claim any exemption or credit. The total credit cannot
between $95,000 and $115,000 for any member of a
be allocated to the return with the latest year end.
controlled group, the reduction percentage will apply to
LINE-BY-LINE INSTRUCTIONS
all members of the controlled group. This reduction is
based on the individual/partner/officer/shareholder with
Lines not listed are explained on the form.
the largest allocated income.
Line 2, Account Number. Enter the same account
If a member of the group has a tax year less than 12
number used on page 1 of your annual return.
months, its gross receipts, adjusted business income and
Part 1, Member Identification. Enter in the appropriate
share of business income must be annualized to
column the name, year end, FEIN and organization type
determine eligibility and to compute the small business
of each member. When completing the rest of this form,
credit. If annualized gross receipts exceed $9 million but
use the lower case letter, i.e., a, b, c, etc., to the left of
do not exceed $10 million, you must complete Part 6. See
each name to refer to a member. If you need more space,
page 6 for complete annualizing instructions.
attach a schedule identifying additional members with
consecutive letters.
Loss Adjustment. If you are not eligible for the full
small business credit or the alternate tax calculation due
Part 2, Statutory Exemption.
to an adjusted business income or allocated income
One statutory exemption is allowed to a controlled group,
disqualifier, you may benefit from the SBT Loss
affiliated group or a group of entities under common
Adjustment Worksheet on page 25. If your adjusted
control. Allocate the exemption to members using any
business income was less than zero in any of the five
method agreeable to all members.
years immediately preceding the tax year for which you
Members whose adjusted gross receipts are less than
are claiming a credit and you received a small business
$100,000 are not required to use any portion of the
credit for that same year, you may adjust for the loss. The
statutory exemption, but must include their business
loss adjustment for adjusted business income purposes
activity when figuring the small business credit.
must be based on the group's combined numbers.
Enter on line 4 the portion of the statutory exemption
However, since the disqualifiers for individual/partner/
that is allocated to each member. Use the amount
shareholder are made on an entity basis, you must
allocated to calculate the allowable exemption for each
calculate a separate entity loss adjustment for those
member on Form C-8043.
purposes. A loss adjustment will not affect a reduction to
the small business credit based on gross receipts that
Part 3, Adjusted Business Income. Business income is
exceed 9 million. It will also not change the amount of
adjusted by loss carry forwards and carry backs from
your Single Business Tax Annual Return (Form C-8000),
allocated income on Form C-8000KC, Column K for a
and by compensation and directors’ fees of active
C-corporation.
shareholders and officers from Form C-8000KC.
CONTROLLED GROUPS THAT HAVE
Part 4, Alternate Tax for Small Businesses. The
MEMBERS WITH DIFFERENT TAX YEARS
alternate tax computation is a simplified way of
Each member’s business activities attributable to its tax
computing your SBT while still allowing a small
year ending within the 2001 calendar year are
business credit. Calculate an alternate tax credit for the
consolidated on this form to allocate the statutory
group. Each member’s share of alternate credit is based
exemption and determine standard small business credit
on the ratio of its tax liability before credits to total
or alternate tax. This determination cannot be made
combined tax liability before credits. Compute your tax
58
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