Are estimated tax payments required for flow-through entities for tax years beginning July 1, 2016 or later?
Flow-Through Entities (FTEs) whose tax year begins July 1, 2016 or later are no longer subject to flow-through withholding requirements. FTEs who intend to file a Composite Individual Income Tax Return (807) may have to file estimated tax vouchers and pay estimated tax on behalf of all participants. Estimated vouchers and payments are required if the annual income tax liability for each participant is expected to exceed $500 after exemptions and credits.
The estimated payments must be remitted with a Fiduciary Voucher for Estimated Income Tax (Form MI-1041ES) with the name of the FTE and the FTEs federal employer ID number (FEIN). Write “Composite return” on the top of the voucher. Estimated payments should only be remitted for those members who will participate on the Composite Individual Income Tax Return (807).
FTEs using a calendar tax year must file vouchers and pay quarterly estimated tax by April 15, July 15, October 15, and January 15. FTEs that are not using a calendar year must file vouchers and pay quarterly estimated tax on the appropriate due dates that, in the FTEs fiscal year, correspond to the calendar year. Fiscal year filer due dates apply regardless of the tax years of the participants.