What withholding is reported on the composite return for tax years 2012-2016?
Composite filers should report the withholding attributable to the participating members. This will be each participating member’s share of withholding paid and reconciled on Michigan Annual Withholding Reconciliation Return, (4918), excluding any withholding refunded to the Flow-Through Entity (FTE). Withholding refunded to the FTE on Form 4918 should never be included in the amount of withholding reported to members at year-end.
The withholding allocated to those members that participate in the composite filing is claimed on the composite return, just as an individual would claim his share as a credit on Michigan Individual Income Tax Return (MI-1040) if the member was not participating. Each participant’s share of withholding listed in Part 4 of Form 4918 is reported on the Composite Individual Income Tax Return (807), Schedule A (Schedule of Participants).