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16. What information must a flow-through entity report to nonparticipants of a composite return?
The following information must be conveyed to each nonparticipant of a Michigan Composite Individual Income Tax Return (Form 807):
- The FEIN of the flow-through entity (FTE)
- The tax year of the FTE
- The amount of estimated tax paid by the FTE on behalf of that member
- The member’s share of taxable income attributable to the FTE
- The FTE’s Michigan sales and the FTE’s total sales everywhere Additional reporting requirements exist if the FTE elected to pay flow-through entity tax. See Flow-Through Entity Tax FAQ.
The FTE may use any method to report the necessary information to its members so long as it conveys the information listed above. Treasury recommends that the FTE provides the information to the members as a supplemental attachment to their federal Schedule K-1, which provides the member with the information necessary to file a Michigan Individual Income Tax Return (Form MI-1040).