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Report and Pay PAA

Reporting and Making Payments

Public Act (PA) 148 of 2022 introduced Chapter 18 within Part 3 of the Income Tax Act, to establish a method for reporting and paying (or seeking a refund of) the Michigan income tax on final federal adjustments that arise from a partnership level audit or administrative adjustment request for partnerships subject to the federal Bipartisan Budget Act (BBA) of 2015. Generally, Chapter 18 requires the adjustments to be reported and paid in one of two ways – the partnership may report adjustments to members, who must then separately report and pay their share of the applicable Michigan income tax due (i.e., the “push out” method) or, alternatively, the partnership may elect to report and pay any applicable Michigan income tax on behalf of its members (i.e., the “pay up” method). The "pay up" method, if selected, is irrevocable.
Under either the pay up or push out method, Michigan Federal Adjustments Report (“FAR”) for Partnerships and Other Flow-through Entities (“FAR for partnerships”) must be used by partnerships to report information and adjustments to Treasury. The FAR for partnerships must be filed by the partnership's "state partnership representative," who is the individual vested with sole authority to act on behalf of the partnership, and can be, but is not required to be, the same individual selected as the federal partnership representative for federal tax purposes. 


Pay Up method:

Payments for partnerships selecting the "pay up" method are required to be made electronically using Treasury's online system, Michigan Treasury Online (MTO). Once logged into your account, select the Fast Pay option under Guest Services to make your payment.

Push Out method:

Payments for partners of partnerships that selected the "push out" method are required to be made either by using the Individual Income Tax Form 5839, Partnership Audit Adjustments Payment Voucher, or by amending the Corporate Income Tax return for the required tax year, whichever is appropriate.