19. What withholding is reported on the composite return for tax years 2012-2016?
Flow-through withholding was repealed in 2016 and is no longer required for entities with tax years beginning after June 30, 2016. Flow-through withholding will not be claimed on composite returns filed for tax years 2018 and beyond.
On returns for tax years before 2018, fiscal composite filers who were subject to flow-through withholding should report the withholding attributable to the participating members. This will be each participating member's share of withholding paid and reconciled on Michigan Annual Withholding Reconciliation Return (Form 4918), excluding any withholding refunded to the flow-through entity (FTE). Withholding refunded to the FTE on Form 4918 should never be included in the amount of withholding reported to members at year-end.
The withholding allocated to those members that participate in the composite return is claimed on the composite return, just as an individual would claim his share as a credit on Michigan Individual Income Tax Return (Form MI-1040) if the member was not participating. Each participant's share of withholding listed in Part 4 of Form 4918 is reported on the Michigan Composite Individual Income Tax Return (Form 807), Schedule A (Schedule of Participants).