Should I file an Individual Income Tax return (MI-1040) or a Michigan Business Tax return (Form 4594) to claim my Farmland Preservation Tax Credit?

The following should file an Individual Income Tax return (MI-1040) with a MI-1040-CR5:

  • You own your farm independently.

  • You are in possession under a life estate with remainder to another person.

  • Representative of a deceased single person. Include property taxes and income prorated from January 1 to the date of death.

  • Partnerships.

  • Joint owners.

  • Limited Liability Companies.

  • S Corporation shareholders, except shareholders of S corporations who had an FDRA before January 1, 1989 and in 1991 elected to file under the Single Business Tax (SBT) Act on C-8022.

  • Grantor Trusts (if treated as an owner under the Internal Revenue Code (IRC) Sections 671 through 679).

  • Trusts created by the death of a spouse if the trust requires 100 percent of the income from the trust to be distributed each year to the surviving spouse.

The following should file a Michigan Business Tax (MBT) return (Form 4567) with a Farmland Preservation Tax Credit (Form 4594):

  • Estates, including property taxes prorated from the date of death to December 31, and farm income required to be reported on the entity’s U.S. Form 1041.

  • Corporations other than S corporations, who made the election to file and pay under the MBT beginning with the taxpayer’s first tax year ending after December 31, 2011.If you did not make this election, you cannot file for a farmland preservation tax credit under the MBT; this includes new corporations established after the 2012 tax year.

  • S corporations that had an FDRA before January 1, 1989, and in 1991 elected to file C-8022.

  • Trusts, except as noted previously, who made the election to file and pay under the MBT beginning with the taxpayer’s first tax year ending after December 31, 2011, or who had claimed the credit in a previous year under the Income Tax Act but are no longer eligible as a result of the death of the owner of the grantor trust.Trusts who do not meet this criteria are not eligible to file under the MBT: this includes new trusts which are not grantor trusts and are not eligible to file under the Income Tax Act and were established after 2012.