FTE and Michigan IIT

If you are a direct or indirect member of a flow-through entity that elected to pay the Michigan FTE tax and deducted that Michigan FTE tax on its federal return, you must report your share of those taxes paid as an addition on the Michigan Additions and Subtractions (Schedule 1). Please refer to the instructions on Schedule 1 for details.

If you are a direct or indirect member of a flow-through entity that elected to pay the Michigan FTE tax and that entity received Michigan FTE tax refunds, you must subtract the amount of the refund included in your distributive share. This amount is reported as a subtraction on the Michigan Additions and Subtractions (Schedule 1). Please see the instructions on Schedule 1 for reporting this subtraction.

You are required to include a copy of the federal Schedule K-1 with the Schedule K-1 notes, or other supporting documentation received from the flow-through entity of which you are a direct or indirect member.

No, an electing flow-through entity that files a composite return on your behalf should claim your Michigan FTE tax credit on the Michigan Composite Individual Income Tax Return (Form 807). You may not claim the same credit again if you file a Michigan Individual Income Tax Return (Form MI-1040).  

Please see the instructions for the Form 807 and Form MI-1040 for additional information.