4594: Farmland Preservation Tax Credit (2024)
Michigan · Michigan Treasury · Used for tax years 2024
Michigan Form 4594 calculates the 2024 Farmland Preservation Tax Credit for corporate farm owners, estates, and trusts. It reports property taxes on land covered by farmland development rights agreements, any required gross receipts qualification, and the resulting credit. It mus
Who files this form
Form 4594 is used by eligible corporate farm owners, estates, and trusts to claim the 2024 Michigan Farmland Preservation Tax Credit. You must own farmland and have a Farmland Development Rights Agreement (FDRA) with the Michigan Department of Agriculture and Rural Development (MDARD).
The listed filers are:
- Estates, including property taxes from the date of death and farm income required on the estate’s U.S. Form 1041.
- Corporations other than S corporations that elected to file and pay Michigan Business Tax (MBT) beginning with their first tax year ending after December 31, 2011.
- S corporations that had an FDRA before January 1, 1989, and elected in 1991 to file under the Single Business Tax Act on Form C-8022.
- Trusts, except those directed to use MI-1040CR-5.
Individuals, partnerships, joint owners, most S corporation shareholders, certain grantor trusts, and trusts created by a spouse’s death that must distribute all income annually to the surviving spouse are directed to use MI-1040CR-5 instead.
Certain estates and trusts may make a later MBT election if the credit was previously claimed under individual income tax, became ineligible under that tax because of an owner’s death after December 31, 2011, and the farmland transferred into or reverted to the estate or trust.
Agreements entered into on or after January 1, 1978, must meet a gross receipts qualification in Part 1. Form 4594 must be filed with an MBT return, not by itself.
When it's due
- 2024 credit, new agreements: Local government approval is required by November 1, 2024.
- 2024 credit, recorded agreements: The FDRA is not final until MDARD receives a recorded copy. If MDARD has not received it before April 30, file the MBT return without that agreement, then amend the return when the FDRA is completed. The text does not specify a calendar year for April 30.
The supplied text does not state a general filing due date for the 2024 MBT return.
What you'll need
Include these forms and attachments:
- Form 4567, Michigan Business Tax Annual Return.
- Form 4574, MBT Refundable Credits; Form 4946, Schedule of Corporate Income Tax Liability for a Michigan Business Tax Filer; and Form 4947, Schedule of Certificated Credits.
- Page 1 of your 2024 U.S. Form 1120, 1120S, or 1041, and all supporting federal schedules.
- Copies of 2024 property tax statements showing taxable value, millage rates, taxes levied, and the corresponding agreement numbers.
- Copies of receipts showing payment of 2023 or 2024 property taxes.
- An official assessor allocation for statements covering multiple agreements or including land outside an FDRA.
For shareholder compensation on line 26, complete and include Form 4577, MBT Schedule of Shareholders and Officers. An eligible member of a Unitary Business Group must also attach the supporting pro forma Business Income Tax base calculation.
Have your agreement details and the property tax and agricultural gross receipts records needed for Part 1 available.
How to file
File completed Form 4594 as part of your Form 4567 MBT return, with Forms 4574, 4946, and 4947 and the required attachments. Do not file Form 4594 alone.
E-file: All eligible MBT returns prepared using tax preparation software or computer-generated forms must be e-filed. Treasury will not process eligible computer-generated paper returns. Follow your software’s instructions for attaching supporting documents, and keep copies of all documentation. E-file information and exclusions are available at www.MIfastfile.org.
Paper filing: The mailing instructions say to include Form 4594 with Form 4567. Put Form 4567 on top, followed by the other forms in their printed sequence order, then the required attachments. The supplied text does not give a mailing address.
Type or print in blue or black ink. Enter Part 2 amounts in whole dollars, without cents. Carry the credit from Form 4594, line 29, to Form 4574, line 15.
Common mistakes
- Changing the gross receipts formula later. Once you elect a qualification formula, all future claims must use it.
- Leaving agreement numbers off tax statements. Write the corresponding agreement number on each 2024 property tax statement and use the contract number from the most recently recorded agreement.
- Omitting paid tax receipts. If receipts are missing, the credit check is issued jointly to the taxpayer and county treasurer. A replacement payable only to the taxpayer will not be issued if payment is proved later.
- Including ineligible taxes. Do not include penalties, interest, or special assessments. Reduce taxes for land outside an FDRA and separate taxes among agreements when a statement covers more than one.
- Changing covered property or ownership without checking first. Consult MDARD before making changes because some changes may make the property ineligible for credit.
- Trying to revoke the MBT election by amendment. The instructions say the election to remain taxable under the MBT cannot be revoked by amending a return.
Questions people ask
Which year’s property taxes qualify for the 2024 credit?
Property taxes levied in 2024 on enrolled land are eligible, regardless of when they are paid. Eligible collection fees may be included up to 1% of the taxes. Special assessments, penalties, and interest cannot be claimed.
Do all agreements need the gross receipts test?
No. Part 1 applies to agreements entered into on or after January 1, 1978. If all agreements began before that date, skip to Part 2.
What if I bought an already-enrolled farm in 2024?
The instructions require a qualifying MBT election. Ownership on the FDRA filed with MDARD must match your deed before the credit will be processed. Prorate the 2024 taxes for the period you owned the land and claim only those taxes.
What should I do with a jointly payable refund check?
Take the check, check stub, and a copy of the FDRA agreements to the county treasurer or treasurers. You will endorse the check, the refund will be used to pay delinquent taxes, and any remaining amount will be returned to you.