Form 4577 - Michigan Business Tax Schedule Of Shareholders And Officers

• Owns at least 5 percent of outstanding stock, including

Note: All employee insurance payments and pensions must be

included, whether or not the shareholder of C Corporation officer

through attribution (column E or F = 5 percent or more), AND

worked in Michigan.

• Receives at least $10,000 in compensation, director fees, and

dividends from the business (sum of columns I and L = $10,000

Column L: If any shareholder or officer of a C Corporation

has total compensation and director fees in column L of over

or more). Important: For short-period returns or a part-year

$180,000 after loss adjustment, the C Corporation is not eligible

shareholder, compensation, director fees, and dividends of each

individual must be annualized to meet this requirement.

for the Small Business Alternative Credit.

Column m: Multiply the percentage in column G by line 5c on

Annualizing

the MBT Common Credits for Small Businesses (Form 4571).

Multiply each applicable amount by 12 and divide the result

by the number of months in the tax year the business operated

UBGs: Multiply the percentage in column G by the sum of the

or the person was a shareholder. Generally, a business is

MBT Unitary Business Group Combined Filing Schedule for

considered in business for one month if the business operated

Standard Members (Form 4580), Part 2A, lines 30 and 34, plus

for more than half the days of the month.

capital loss deducted on the federal returns of all members.

Note: If the business was in operation for less than a month it

Column N: If any shareholder or officer has total income in

is considered to have been in business for 1 month.

column N of over $180,000 after loss adjustment, the taxpayer

Line 4: Add the compensation and director fees in column L for

is not eligible for the Small Business Alternative Credit. If any

shareholder or officer has total income in column N of over

each C Corporation officer who is not an active shareholder and

$135,000, the taxpayer is not eligible for the Start-Up Business

enter the result on line 4 and on Form 4571, line 7.

Credit.

RemINdeR: Active shareholders of an S Corporation are

included in the line 3 calculation, even if the shareholder is also

PART 2: LIST OF FAMILY MEMBERS AND THEIR

a C Corporation officer. Because the definition of “officer” for

CORRESPONDING RELATIONSHIP TYPE

this purpose does not apply to an S Corporation, line 4 will

Columns P through S represent relationships affected by

always be blank for an S Corporation.

attribution.

Include completed Form 4577 as part of the tax return filing.

For each shareholder listed in Part 1, column A, enter the

corresponding number of the shareholder’s spouse, parent,

child, or grandchild, if any, listed in Part 1, column A.

If more than one number is entered in boxes P through S,

separate numbers with a dash. For example, if a family member

has three children, each child’s member number should appear

in the “Child” column with dashes separating them (“2-3-4”).

Do not use a dash to imply included numbers (such as “5-8”

meaning “5 through 8”), but instead include each member

number (“5-6-7-8”). Do not use commas.

exAmpLe (See tHe AttRIBUtIoN exAmpLe oN

tHe pReVIoUS pAGe): Kathy Rock’s (6) parents (4 and 5)

work for the company. Kathy will list “4-5” in column Q.

Note: If the space provided in the line 2 columns is not

adequate to list all of the corresponding relationships, attach a

separate sheet of paper with the member number from column

O, the corresponding relationship, and the number of the

member(s) with that relationship.

Column t: Check column T for each shareholder listed only

if columns P through S are blank (no attributable relationship

exists).

PART 3: Small Business Alternative Credit

Line 3: Add compensation and director fees in column L for

each active shareholder and enter the result on line 3 and on

Form 4571, line 6.

An active shareholder:

• Is a shareholder of the Corporation, including through

attribution, AND

101

Form 4577 - Michigan Business Tax Schedule Of Shareholders And Officers - 2012 Page 5

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