Credits 3. How does a taxpayer with a qualifying certificated credit under MCL 208.1107(1) make the election to remain under the MBT? When must the election be made?

A taxpayer with a qualifying certificated credit, as defined at MCL 208.1107(1), will make the election to continue filing under the MBT by filing an MBT return.

Except for taxpayers holding either historic preservation or brownfield certificated credits, section MCL 208.1500 requires a taxpayer to make the election "for the taxpayer's first tax year ending after December 31, 2011." That section further provides that, once the election is made, the taxpayer is required to continue to file and pay tax under the MBT until the certificated credit and carryforward of that credit are used up. MCL 208.1500(1). Therefore, most taxpayers making the election will have to make the election for the first tax year of the CIT and will not be permitted to change the election.

Taxpayers with a pre-approval letter for a brownfield credit or a pre-approval letter, approved rehabilitation plan, or approved enhanced or special high community impact plan for a historic preservation credit have greater flexibility. A taxpayer with one of these certificated credits may elect to pay under the MBT in "the tax year in which that certificated credit may be claimed." MCL 208.1500(2)-(3). Or, in the case of a multi-phase project for either of these credits, a taxpayer may elect to claim the amount payable in the tax year; except that a taxpayer with a multi-phase brownfield credit under MCL 208.1437(10) must continue to file and pay under the MBT until the certificated credit, and any carryforward of the credit, are used up, once the election is made. MCL 208.1510(2), (3). These taxpayers may be CIT taxpayers for tax years in which a credit is not available.