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3. Is a composite return required?

No, a Michigan Composite Individual Income Tax Return (Form 807) is optional. A flow-through entity (FTE) may file a composite return on behalf of its nonresident members who elect to participate** or each individual member must file a Michigan Individual Income Tax Return (Form MI-1040)Michigan Nonresident and Part-Year Resident Schedule (Schedule NR),  Schedule 1 and all other applicable schedules for a complete Michigan filing.

** Limitations may apply on an intermediate FTE’s ability to participate in another FTE’s composite return if the intermediate FTE elected to pay Michigan flow-through entity tax. See Flow-Through Entity (FTE) Tax Credit FAQs.