Reporting and Payment Requirements

(Note: The Department is reviewing the current reporting requirements. Check this section periodically for changes.)

Reporting and Payments to the Department

Effective January 1, 2012, payment for Flow-Through Withholding is required to be reported and paid on a quarterly basis using Form 4917, Flow-Through Withholding Quarterly Tax Return. These quarterly returns and payments are due April 15, July 15, and October 15 of the FTE's tax year and January 15 of the following year, or the appropriate corresponding due dates in a fiscal year FTE's tax year. FTEs will also file an annual reconciliation using Form 4918, Annual Flow-Through Withholding Reconciliation Return, due to the Department on February 28, or the last day of the second month following the end of the tax year for fiscal year FTEs. The first Annual Reconciliation for a fiscal year FTE with a tax year ending before December 31, 2012, will not be due to the Department until February 28, 2013.

Note:   Flow-Through Withholding should no longer be included with the taxes reported on Form 160, Combined Return for Michigan Taxes, or on Form 165, Annual Return For Sales, Use and Withholding Taxes. In addition, all Flow-Through Withholding should be remitted using the FTE’s FEIN. Account numbers previously assigned by the Department (ME numbers) may no longer be used.

Reporting to Members

Each FTE required to withhold must provide an annual statement to its members containing sufficient information for the members to accurately file either their Michigan CIT return or their Individual Income Tax return. The FTE must provide the statement to its members by the last date of the first month following the end of the FTE’s tax year, that being January 31 for calendar year FTEs. No specific form is required and in fact, Form 4119, Statement of Michigan Income Tax Withheld for Nonresidents from Flow-Through Entities, used prior to the 2012 tax year may no longer be used. Instead, the Department suggests conveying the following required information as supplemental information on the member’s federal Schedule K-1:

  1. The FTW paid on behalf of that member;
  2. That member's tentative distributive share of the FTE's business income;
  3. The FTE's sales sourced to Michigan; and
  4. The FTE's total sales.

If the FTE will be filing a Composite Individual Income Tax Return (Form 807), then it must instead report to members that participate in the composite filing the following information:

  1. The FTE's FEIN;
  2. The FTE's tax year;
  3. The tax paid by the FTE on behalf of the member;
  4. The member's tentative distributive share of the FTE's business income;
  5. The FTE's sales sourced to Michigan; and
  6. The FTE's total sales.

Any FTE required to withhold under the Income Tax Act holds the amount of tax withheld as a trustee of the State and is liable to pay this tax. Special provisions exist for an entity required to withhold that permanently ceases operations prior to the close of the calendar year.

EFT Payments

FTEs that are required to withhold may elect to make remittances by Electronic Funds Transfer (EFT). If payments are made using EFT, the requirement to file Form 4917 is waived. The EFT payment should be the same as the amount that would have been paid if Form 4917 had been used.

Note: A debit transaction will be ineligible for EFT if the bank account used for the electronic debit is funded or otherwise associated with a foreign account to the extent that the payment transaction would qualify as an International ACH Transaction (IAT) under NACHA Rules. Before this method is chosen, the FTE should contact its financial institution for questions about the status of its account. Contact Treasury’s Electronic Funds Transfer Unit at 517-636-6925 for more information on alternate payment methods.

FTEs previously required to remit withholding by EFT on a schedule other than quarterly will no longer be required to pay Flow-Through Withholding by EFT. If a FTE chooses to continue EFT payments, the FTE will need to register separately for quarterly Flow-Through Withholding EFT on either Form 2328 or Form 2248.

Calculating Michigan Flow-Through Business Income, Allocation and Apportionment

For Calculating Michigan Flow-Through Business Income, Allocation and Apportionment, please view Instructions For Flow-Through Withholding Quarterly Return (Form 4917)