4587: Schedule of Recapture of Certain Business Tax Credits (2024)
Michigan · Michigan Treasury · Used for tax years 2024
Michigan Form 4587 is a schedule used to report recapture of certain previously claimed business tax credits and deductions for 2024. It totals the recapture amounts to carry to the applicable Michigan Business Tax annual return.
Who files this form
Complete Form 4587 if you have a recapture in tax year 2024 of a previously claimed credit or deduction listed on the schedule. Recapture means reporting an amount that must be added back after a credit or deduction was claimed.
The schedule covers certain MEGA credits, the MBT Brownfield Redevelopment Credit, the Film Infrastructure Credit, Anchor Company credits, and Qualified Affordable Housing deductions.
If any member of a Unitary Business Group (UBG) reports recapture, the group includes one Form 4587 with its annual return and a statement showing each reporting member’s recapture amounts.
Qualified Affordable Housing deduction recapture is mandatory even if the taxpayer would otherwise not have to file because it does not meet the $350,000 filing threshold.
What you'll need
Have the following information available, as applicable:
- Your name and account number as shown on page 1 of your MBT annual return.
- Previously filed Forms 4574 or 4584 showing credits subject to recapture.
- Form 4584, line 47, for Brownfield Redevelopment Credit recapture.
- Film infrastructure asset records showing descriptions, locations, acquisition and sale dates, gross proceeds, and gains or losses. If taxable in another state, you also need the percentage from Form 4567, line 11c.
- For Qualified Affordable Housing recapture, the deduction allowed to the seller and the number of years the project qualified and complied with the operation agreement.
- For battery credit recapture, the amounts MEGA determined must be added back and the applicable credit codes.
Supporting calculation attachments are not required. Keep the recapture calculation information in your files for audit review.
A UBG must attach a statement identifying each reporting member and the recapture amount for each applicable credit.
How to file
Include completed Form 4587 as part of your tax return filing. The supplied text does not give a mailing address or e-file instructions.
Enter the total recapture on line 13 and carry it to the applicable return:
- Standard taxpayers: Form 4567, line 56.
- Insurance companies: Form 4588, line 26.
- Financial institutions: Form 4590, line 29.
A UBG includes only one copy of Form 4587. Use the Designated Member’s name and account number, total all reporting members’ amounts on the corresponding lines, and attach the required member-by-member statement.
Common mistakes
- Filling in expired recapture lines: Leave lines 1, 2b, 2c, 3, and 6 blank.
- Using the wrong date format: Enter dates as MM-DD-YYYY.
- Combining asset dispositions with different dates: Multiple dispositions may be listed as one entry only when both the acquisition dates and sale dates are the same. List dispositions with different dates separately.
- Treating a film infrastructure loss as a reduction in recapture: The form warns that a loss in line 8b, column F, increases recapture.
- Reporting battery credits separately on line 12a: If more than one eligible battery credit is being recaptured, enter the combined amount on line 12a.
- Discarding calculation records: Keep recapture calculations in your files even though supporting calculation attachments are not required.
Questions people ask
When does the MBT MEGA Employment Tax Credit have to be recaptured?
If a taxpayer removes 51 percent or more of the qualified new jobs from Michigan within three years after the first year the credit was claimed, the taxpayer must recapture the total of the applicable credits claimed on prior returns. Report the MBT MEGA Employment Tax Credit amount on line 2a.
How is Film Infrastructure Credit recapture calculated?
Line 8f is 25% of the adjusted proceeds on line 8c or, if taxable in another state, the apportioned adjusted proceeds on line 8e. The calculation adjusts proceeds for gains or losses.
Can a violation involving one affordable housing unit trigger recapture?
Yes. Failure to operate even one residential rental unit according to the operation agreement is a recapture event. The lien becomes payable in the year the recapture event occurs.
Which battery credit codes should I use?
Use code 11 for the MEGA Battery Manufacturing Facility Credit, 12 for the MEGA Large Scale Battery Credit, and 13 for the MEGA Advanced Lithium Ion Battery Credit. For one credit, enter its code on line 12b. For two credits, enter one code on line 12b and the other on line 12c.