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Unitary Business Groups: Disregarded Entities

Unitary Business Groups: Disregarded Entities

Situational Explantion

A disregarded entity owned by a Unitary Business Group (UBG) member cannot claim the Research and Development (R&D) Tax Credit on its own. However, its Michigan Qualified Research Expenses (MQREs) may still count toward the group’s credit if the UBG meets the eligibility requirements.

Employees of a disregarded entity cannot be counted when determining the employer size of the UBG. The disregarded entity is treated as a separate employer for this purpose.