Form 4599 - Michigan Business Tax For Financial Institutions Booklet - 2012 Page 37
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42If more than one member completes one of these forms,
prior to the credit) of the UBG member generating the credit
multiple copies of that form must be included in the group’s
would have been if that member was not included in the group.
combined return.
Therefore, the member generating the credit must calculate
its pro forma tax liability as if it was a singular, stand-alone
In addition, many credits require an entity-specific calculation
taxpayer in all aspects. This supporting pro forma calculation
of a credit amount. The following table provides a summary
should be provided in a statement attached to the return.
of UBG credit calculations for a combined return of financial
However, this calculation and its results should never be
institutions where:
transferred to Form 4590 or displayed in a layout similar to
A) The test or criteria to qualify for the credit should be applied
Form 4590.
on a group basis (G) or a separate entity basis (E).
Effects of Members Joining a Group
B) If the qualification test is satisfied, the calculation of the
When an entity becomes a member of a UBG part way through
available credit amount should be on a group basis (G) or a
the member’s tax year, for MBT purposes the new member will
separate entity basis (E).
experience a short tax year beginning on the date the member
C) Calculation of the credit should be done after elimination
joins the group, even if it does not have a short period for
of intercompany transactions (Y or N). NOTE: This applies
federal purposes.
only to the calculation of the credit. The tax liability of the
For both the UBG return and the new member’s separate
UBG against which the credit will be applied is calculated after
short period return, tax bases will be calculated using actual
elimination of all intercompany transactions from the tax bases
numbers from the applicable short period of the new member.
and apportionment.
If a member that is new to the group brings with it a
Credit
(A) (B) (C)
certificated credit or carryforward of a certificated credit, the
UBG taxpayer will continue to apply the choice it made for
Brownfield Redevelopment Credit
E
E
N
the first tax year ending after December 31, 2011, concerning
Compensation Credit
G
G
N
the MBT election. Or, in the case of a qualifying brownfield
Film Infrastructure Credit *
E
E
N
or historic preservation credit — the election made by the
Film Production Credit *
E
E
N
group at a later time. If the joining member brings a qualifying
brownfield or historic preservation credit for which credit
Historic Preservation Credit
E
E
N
amount remains available, the UBG taxpayer may make the
Individual or Family Development Account Credit
G
G
N
election to be taxable under the MBT in a year in which credit
MEGA Employment Tax Credit
E
E
N
amount is available and must remain taxable under the MBT
MEGA Photovoltaic Technology Credit *
E
E
N
for all years in which brownfield or historic preservation credit
amount is available if the election is made.
Renaissance Zone Credit
E
E
N
* Financial institutions may claim film and photovoltaic credits
Effects of Members Leaving a Group
as assignees only.
When a member of a UBG ceases to be a member part
way through the member’s tax year, for MBT purposes the
The available amount of each of the above credits is taken
departing member will experience a short tax year ending on
against the entire group’s tax liability. Additional UBG
the departure date, even if it does not have a short period for
instructions are provided on forms where these credits are
federal purposes.
calculated.
For both the UBG return and the departing member’s separate
If the UBG is comprised of both standard members and
short period return, tax bases will be calculated using actual
financial institutions, two copies of supporting forms will be
numbers from the applicable short period of the departing
completed (one group of supporting forms for the standard
member.
members’ annual return and one group of supporting forms for
the financial institutions’ annual return).
When a member leaves the UBG other than at the end of its
federal tax year, any available certificated credit generated
by the member will be allocated to the period that includes
Pro Forma Calculations for Certain Credits
the effective date of the certificate. A credit carryforward
For some credits, evaluation of whether a UBG is qualified to
attributable to the departing member and existing in the
claim the credit is based on characteristics and activities of a
departing member’s (or the group’s) account prior to leaving
single member, rather than the group as a whole. Similarly, for
the group typically will be applied first to the group return for
some credits, after it is determined that a UBG is qualified to
the group filing period that includes the end of the departing
claim the credit, calculation of the amount of credit available is
member’s short state tax year that ended upon leaving the
based on data of a single member, rather than the group. Each
group. Any carryforward remaining after that application (i.e.,
credit requiring this method is identified on the form on which
neither consumed or expired) will, generally, be fully available
it is calculated. In these situations, typically a pro forma MBT
for use by the departing member. If the remaining UBG does
liability is required for the member generating the credit.
not hold a certificated credit after the departing member leaves
Where a pro forma calculation is required, the underlying
with credit then the group is no longer eligible to continue
objective is to determine what the tax liability (immediately
under the MBT. If the departing member joins another UBG,
37
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