What income is reported on the composite return?

The Flow-Through Entity (FTE) reports the distributive share of income of participating nonresident members by using its federal return and adjusting to Michigan taxable income through additions, subtractions, allocation and/or apportionment.  If there are Michigan resident members or nonparticipating members, the return allows for a separation of this income so that only the income of the participating nonresidents is taxed on the return.

The Composite Individual Income Tax Return (807) is a calendar year return for individuals.  If an FTE has a fiscal tax year for federal purposes, the composite return will include all the FTEs income for the full fiscal year which ended during the calendar year.