4595: Renaissance Zone Credit Schedule (2024)
Michigan · Michigan Treasury · Used for tax years 2024
Michigan Form 4595 calculates the nonrefundable Renaissance Zone Credit for Michigan Business Tax taxpayers. It reports property values, payroll, and business activity within a designated Zone to determine the credit carried to Form 4573 or Form 4596.
Who files this form
Use Form 4595 to calculate and claim the 2024 Michigan Business Tax (MBT) Renaissance Zone Credit if you are an eligible taxpayer located and conducting business activity in a designated Renaissance Zone. To obtain the credit, you must file an MBT annual return.
The form covers both certificated and non-certificated Renaissance Zone credits. A taxpayer without a certificated Renaissance Zone credit may claim this credit if it has properly elected to remain taxable under the MBT based on another certificated credit.
For a Unitary Business Group (UBG), calculate the credit separately for each eligible member and include the schedules with the group's combined annual return.
Businesses delinquent in filing or paying Property Tax, SBT, MBT, or City Income Tax as of December 31 of the prior tax year are not eligible. Casino-related business activities, including related parking lots, hotels, motels, and retail stores, cannot be used to calculate the credit.
What you'll need
Have the following information available to complete the schedule:
- Your taxpayer name and FEIN or TR number. UBGs also need the designated member's and reporting member's information.
- The property's street address, city, parcel number, and Zone or Subzone name.
- Property values and rental amounts for the Zone and for Michigan, including subrental amounts used to calculate net rent.
- Payroll for services performed in the Zone and total Michigan payroll.
- Applicable depreciation, amortization, or accelerated write-off amounts for qualifying tangible property in the Zone.
- Form 4573, line 13, or Form 4596, line 14, for tax liability before this credit. UBG members use a pro forma member-level liability.
- If applicable, business income and apportionment figures from Form 4567 or member-level figures from Form 4580.
- The Zone's designation period to determine the reduced credit percentage.
Taxpayers first located in the Zone before December 1, 2002, also need their 2007 Renaissance Zone Credit, Michigan payroll, and Business Activity Factor.
The instructions direct insurance companies and financial institutions to use Business Income Worksheet 4746 to calculate pro forma business income and attach it to the return.
How to file
Include completed Form 4595 as part of your tax return filing. The supplied text does not give a mailing address or e-file directions.
- File a separate Form 4595 for each Zone and each credit type, certificated or non-certificated.
- Check the certificated credit box when calculating a certificated Renaissance Zone credit.
- Standard taxpayers and financial institutions carry line 25b to Form 4573, line 14. Insurance companies carry it to Form 4596, line 15.
- If filing multiple schedules for different Zones, carry the total of line 25b to the applicable credit form.
- UBGs include each eligible member's schedules with the combined annual return. If filing multiple schedules, enter the total of line 25b for all members on Form 4573, line 14.
Common mistakes
- Combining Zone-specific information. Use a separate schedule for each Zone and credit type. Enter only the identified Zone's activity on lines requiring Zone-specific data.
- Using the wrong historical cutoff. The instructions clarify that the special calculation applies to taxpayers first located in the Zone before December 1, 2002, not December 31, 2002. All other taxpayers must leave lines 22a through 22e and line 23 blank.
- Eliminating UBG intercompany transactions too soon. Calculate the member's credit before eliminating transactions such as rent paid to another group member.
- Leaving the schedule out of the return. Include completed Form 4595 with the tax return filing.
Questions people ask
Is this credit refundable?
No. The Renaissance Zone Credit is nonrefundable.
Does the credit decrease as the Zone's designation ends?
Yes. Based on when the tax year begins, the allowed percentage of the tentative credit is 75% in the second year before the final designation year, 50% in the year immediately before the final year, and 25% in the final year. The table allows 100% in the third or any earlier year before the final year.
Can an LLC complete line 19?
Yes, if it files its federal return as a partnership or S corporation. Line 19 applies to taxpayers reporting under an MBT organization type of Individual, Partnership, or S Corporation, including those LLCs.
How long can the credit continue?
The credit continues through the tax year in which the Renaissance Zone designation expires.