Michigan Free Printable  for 2017 Michigan Small Business Alternative Credit*

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Small Business Alternative Credit*
Form 4893

Attachment 2 Michigan Department of Treasury 4893 (Rev. 03-16), Page 1 2016 MICHIGAN Corporate Income Tax Small Business Alternative Credit Issued under authority of Public Act 38 of 2011. Taxpayer Name Federal Employer Identification Number (FEIN) The Small Business Alternative Credit is NOT available if any of the following conditions exist: • Gross receipts exceed $20,000,000; • Adjusted business income after loss adjustment exceeds $1,361,100; • Any shareholder or officer has allocated income after loss adjustment of over $180,000, as determined on the CIT Schedule of Shareholders and Officers (Form 4894). • Compensation and director fees of a shareholder or officer exceed $180,000. The Small Business Alternative Credit must be reduced if any of the following conditions exist (see Reduced Credit Table at bottom of the page): • Any shareholder or officer has allocated income after loss adjustment of over $160,000 but not over $180,000, as determined on Form 4894. • Gross receipts exceed $19,000,000 but are not more than $20,000,000. NOTE: All taxpayers claiming the Small Business Alternative Credit must include Form 4894. 1. 2. 00 00 3. 4. 5. 6. 7. 8. 9. 00 00 00 00 00 00 00 10. 11. 00 00 13. % 14. 00 Complete this section if gross receipts are more than $19,000,000 but not more than $20,000,000. 15. Excess gross receipts. Subtract $19,000,000 from line 1 ..................................................................................... 16. Excess percentage. Divide line 15 by $1,000,000 (enter as a percentage)........................................................... 17. Allowable percentage. Subtract line 16 from 100%................................................................................................ 15. 16. 17. 00 % % Small Business Alternative Credit. Multiply the percentage on line 17 by the credit on line 14. Carry amount to Form 4891, line 40....................................................................................................................... 18. 00 1. 2. Gross Receipts (see instructions).......................................................................................................................... Tax liability prior to this credit from Form 4891, line 39.......................................................................................... Adjusted Business Income 3. 4. 5. 6. 7. 8. 9. Business Income (see instructions)........................................................................................................................ Carryback or carryover of a capital loss. Enter as a positive number (see instructions)........................................ Carryback or carryover of a federal net operating loss from Form 4891, line 21. Enter as a positive number...... Subtotal. Add lines 3, 4 and 5 ................................................................................................................................ Compensation and director fees of active shareholders from Form 4894, line 1 .................................................. Compensation and director fees of officers from Form 4894, line 2 ...................................................................... Adjusted Business Income. Add lines 6, 7, and 8.................................................................................................. Small Business Alternative Credit Calculation 10. 11. 12. 13. Small Business Alternative Tax. Multiply line 9 by 1.8% (0.018). If less than zero, enter zero ............................. Small Business Alternative Credit. Subtract line 10 from line 2. If less than zero, enter zero ........................ Allocated income used for reduction (see instructions)....................................... 12. 00 Reduction percentage from Reduced Credit Table at bottom of this page (based on amount from line 12) ........ 14. Reduced Credit. Multiply the percentage on line 13 by the credit on line 11. If gross receipts from line 1 are less than or equal to $19,000,000, carry amount to Form 4891, line 40 (see instructions).................................... Reduction Based on Gross Receipts 18. REDUCED CREDIT TABLE If allocated* income is: The reduced credit is: $0 - $160,000.......................... 100% of the Small Business Alternative Credit $160,001 - $164,999 ������������ 80% of the Small Business Alternative Credit $165,000 - $169,999 ������������ 60% of the Small Business Alternative Credit $170,000 - $174,999 ������������ 40% of the Small Business Alternative Credit $175,000 - $180,000 ������������ 20% of the Small Business Alternative Credit * See instructions for tax years less than 12 months. + 0000 2016 16 01 27 4 26 Instructions for Form 4893 Michigan Corporate Income Tax (CIT) Small Business Alternative Credit Purpose To allow taxpayers to calculate the Small Business Alternative Credit (SBAC). The credit is calculated here and then carried to the CIT Annual Return (Form 4891). The CIT Schedule of Shareholders and Officers (Form 4894) also must be filed with a return to qualify for the SBAC. An SBAC claimed on Form 4893 will be denied if Form 4894 is not also included with the return. A taxpayer is disqualified from taking the SBAC under certain circumstances, which are detailed below. Financial institutions and insurance companies are not eligible for this credit. NOTE: A person that is a disregarded entity for federal income tax purposes under the Internal Revenue Code shall be classified as a disregarded entity for the purposes of filing the CIT annual return. Eligibility for the SBAC Taxpayers are not eligible for the SBAC if any of the following conditions exist: • Gross receipts exceed $20,000,000. • Adjusted business income after loss adjustment exceeds $1,361,100 for Corporations (and LLCs federally taxed as such). • Any shareholder or officer has allocated income after loss adjustment of over $180,000, as determined on Form 4894. In addition, the SBAC is reduced if any of the following conditions exist: • Gross receipts exceed $19,000,000 but are not more than $20,000,000. • A shareholder or an officer has allocated income after loss adjustment of more than $160,000 but not over $180,000. This reduction is based on the officer/shareholder with the largest allocated income. Allocated income is the greater of either: (a) A shareholder or officer’s compensation and director fees from Form 4894, column L, or (b) A shareholder’s compensation, director fees, and share of business income (or loss) after loss adjustment, from Form 4894, column N. If either (a) or (b) is greater than $180,000 for any shareholder or officer, the taxpayer is not eligible for the SBAC. In addition, if either (a) or (b) is over $160,000 but not more than $180,000 for any shareholder or officer, the taxpayer must reduce the SBAC based on the officer or shareholder with the largest allocated income. NOTE: Taxpayers leasing employees from professional employer organizations must include the compensation of officers (of the operating company) and shareholders who receive compensation in determining the eligibility for the SBAC even though their compensation is paid by the professional employer organization. Tax Years Less Than 12 Months If the reported tax year is less than 12 months, gross receipts, adjusted business income, and shareholders’ and officers’ allocated income must be annualized to determine eligibility and reduction percentage. Where those same amounts are reported on SBAC forms, they are reported on forms as actual, not annualized, amounts. If annualized gross receipts exceed $19,000,000 but do not exceed $20,000,000, annualize figures to compute the Reduction Based on Gross Receipts, lines 15 through 18. NOTE: If a shareholder owned stock for less than the entire tax year of the corporation, or an officer served as an officer less than the entire tax year: • For purposes of determining credit disqualifiers and credit reduction, compensation and director fees must be annualized. The determination of credit disqualifiers and credit reduction is performed off-form. • For purposes of determining active shareholders, compensation, director fees, and dividends must be annualized. The determination of active shareholders is performed off-form. Annualizing Where annualization applies (see above NOTE), multiply each applicable amount, total gross receipts, adjusted business income, and allocated income, by 12 and divide the result by the number of months in the tax year. Generally, a business counts a month if the business operated for more than half the days of the month. If the tax year is less than one month, consider the tax year to be one month for the purposes of the calculation. Loss Adjustment If the adjusted business income was less than zero in any of the five tax years immediately preceding the tax year for which a taxpayer is claiming an SBAC and an SBAC was received for that same tax year, the taxpayer may be able to reduce the current year’s adjusted business income or allocated income amounts by the loss. See CIT Loss Adjustment for the Small Business Alternative Credit (Form 4895) for more details. If the SBAC is reduced or eliminated because gross receipts exceed $19,000,000, a loss adjustment cannot be used to prevent that reduction or elimination. Similarly, if the SBAC is reduced or eliminated due to compensation reported on Form 4894, column L, a loss adjustment cannot be used to prevent that result. Special Instructions for Unitary Business Groups (UBGs) Recent Statutory Change: UBGs calculate the gross receipts and adjusted business income disqualifiers at the UBG level AFTER intercompany eliminations. For a UBG to claim an SBAC, each member of the UBG that is a corporation, as that term is defined under the CIT, must file Form 4894. 27 The allocated income disqualifier is based on all items paid or allocable to a shareholder or officer by all members of the UBG. All items paid or allocable to a single individual must be combined when calculating this disqualifier. UBGs: Combine for all members all carryback or carryover of a capital loss, to the extent deducted in determining federal taxable income (as defined for CIT purposes), from Form 4897, line 12, and enter on line 4. Enter as a positive number. In addition, a disqualifier applies to a UBG if such disqualifier applies to any member of that UBG. For example, a UBG is disqualified from taking the SBAC if that UBG includes a member for which the allocated income of a shareholder after loss adjustment is in excess of $180,000. The reduction percentages for the credit also apply to the entire group if they apply to one member. SBAC Calculation Line 12: The SBAC is reduced if a shareholder or an officer has allocated income after loss adjustment of more than $160,000 but not more than $180,000. This reduction is based on the officer/ shareholder with the largest allocated income. Enter the allocated income of the shareholder or officer with the highest allocated income after loss adjustment, even if that amount is $160,000 or less. For more information on UBGs, see the “Supplemental Instructions for UBGs” in the Corporate Income Tax Forms and Instructions for Standard Taxpayers (Form 4890). Line-by-Line Instructions Lines not listed are explained on the form. Taxpayer Name and Account Number: Enter taxpayer name and account number as reported on page 1 of Form 4891. UBGs: Complete one form for the group. Enter the Designated Member (DM) name in the Taxpayer Name field and the DM account number in the Federal Employer Identification Number (FEIN) field. Line 1: Enter amount from Form 4891, line 10a. Non-UBG taxpayers reporting a tax year of less than 12 months must annualize the amount on Form 4891, line 10a, and report the result here. For guidance, see the “Annualizing” section at the beginning of these instructions. UBG taxpayers reporting a tax year of less than 12 months will report on this line the amount from Form 4891, line 10a. For UBGs with a member(s) reporting a period of less than 12 months, Form 4891, line 10a, reflects the already annualized gross receipts after eliminations for purposes of the SBAC. Adjusted Business Income Line 3: In general, enter business income from Form 4891, line 18. Exclude distributive share of business income from a flowthrough entity (FTE) that files a Michigan Business Tax (MBT) return for its tax year that ends with or within this taxpayer’s tax year. The distributive share business income from FTEs that is being excluded must be appropriately reported on the Corporate Income Tax: Non-Unitary Relationships with Flow-Through Entities (Form 4898), columns A through C only. NOTE: The adjusted business income (ABI) disqualifier is based on annualized ABI, but the credit calculations performed here are based on actual ABI. UBGs: Combine all business income for all members from CIT Data on Unitary Business Group Members (Form 4897), line 26. Line  4: Enter, to the extent deducted in determining federal taxable income (as defined for CIT purposes), a carryback or carryover of a capital loss from Schedule D of federal Form 1120. Enter as a positive number. 28 If loss adjustment is successfully applied to fully or partially cure a shareholder’s allocated income disqualifier, enter on line 12 the number from Form 4895, line 12. Line  13: For a taxpayer whose shareholders and officers all have allocated income after loss adjustment of $160,000 or less, enter 100 percent. All other taxpayers, see the table at the bottom of page 1 of this form to determine what percent to enter on this line. Line 14: All taxpayers must complete this line. Multiply Line 11 by the percentage on Line 13 and enter that amount on this line. If gross receipts from line 1 are $19,000,000 or less, carry the amount on line 14 to Form 4891, line 38. Reduction Based on Gross Receipts Complete this section if gross receipts on Line 1 are more than $19,000,000 but not more than $20,000,000. Line 17: For a result less than zero, enter zero. Include completed Form 4893 as part of the tax return filing. Form 4894 must be included with the filing of Form 4893.
Extracted from PDF file 2016-michigan-form-4893.pdf, last modified December 2016

More about the Michigan Form 4893 Corporate Income Tax Tax Credit TY 2016

We last updated the Small Business Alternative Credit* in February 2017, so this is the latest version of Form 4893, fully updated for tax year 2016. You can download or print current or past-year PDFs of Form 4893 directly from TaxFormFinder. You can print other Michigan tax forms here.

Other Michigan Corporate Income Tax Forms:

TaxFormFinder has an additional 97 Michigan income tax forms that you may need, plus all federal income tax forms.

Form Code Form Name
Form 4884 Pension Schedule
Form MI W-4P Withholding Certificate for Michigan Pension or Annuity Payments
Form 5049 Worksheet for Married, Filing Separately and Divorced 5049
Form 4891 CIT Annual Return
Form 777 Michigan Resident Credit for Tax Imposed by a Canadian Province

Download all MI tax forms View all 98 Michigan Income Tax Forms


Form Sources:

Michigan usually releases forms for the current tax year between January and April. We last updated Michigan Form 4893 from the Department of Treasury in February 2017.

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Form 4893 is a Michigan Corporate Income Tax form. States often have dozens of even hundreds of various tax credits, which, unlike deductions, provide a dollar-for-dollar reduction of tax liability. Some common tax credits apply to many taxpayers, while others only apply to extremely specific situations. In most cases, you will have to provide evidence to show that you are eligible for the tax credit, and calculate the amount of the credit to which you are entitled.

About the Corporate Income Tax

The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.

Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).

Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.

Historical Past-Year Versions of Michigan Form 4893

We have a total of four past-year versions of Form 4893 in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:


4893, Corporate Income Tax Small Business Alternative Credit 2012 Form 4893

4893, Corporate Income Tax Small Business Alternative Credit


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