4746: Business Income Worksheet (Revision 2021-04)
Michigan · Michigan Treasury · Used for tax years 2024
Michigan Form 4746 is a worksheet for calculating business income for Michigan Business Tax purposes. It combines federal income and deduction amounts with Michigan depreciation adjustments, using separate sections for individuals and fiduciaries, C corporations, and partnerships
Who files this form
Complete this worksheet and attach it to your return. Use the part that matches your organization type:
- Part 1: Individuals and fiduciaries.
- Part 2: C corporations, including persons filing federal returns as C corporations.
- Part 3: Partnerships and S corporations, including persons filing federal returns as partnerships or S corporations.
A Unitary Business Group (UBG) must complete and attach a separate worksheet for each member.
What you'll need
Use the federal forms and schedules that apply to your part of the worksheet:
- Individuals and fiduciaries: U.S. Form 1040 Schedules C or C-EZ, D, and E, plus Form 4797, as applicable.
- C corporations: U.S. Form 1120.
- Partnerships and S corporations: Schedule K from U.S. Form 1065 or 1120S.
- Domestic production activities deduction: Form 8903, if the deduction was taken and applies to the worksheet line.
You will also need your FEIN or TR number and, where applicable, the UBG member's FEIN or TR number.
For applicable depreciation adjustments, use the federal depreciation amounts and the amounts that would have been claimed without the federal bonus depreciation allowance. Attach explanations for entries on lines 6, 13, 18j, and 20d, and for uncommon situations reported on another appropriate line.
How to file
Complete the appropriate part and attach the worksheet to your return. A UBG must attach a worksheet for each member.
Carry total business income after adjustment from line 10, 17, or 25 to Form 4567, line 28. For a UBG member, carry the amount to Form 4580, Part 2A, line 30.
Common mistakes
- Including personal gains or losses: For the Schedule D and Form 4797 entries, report only gains or losses from assets used in a business activity.
- Dropping a negative sign: Enter negative depreciation adjustments and negative adjustment totals as negative amounts.
- Leaving out explanations: Attach explanations for lines 6, 13, 18j, and 20d when used. Also explain uncommon business-income situations reported on an appropriate line.
- Electing Section 179 expensing only for Michigan Business Tax: You may not elect it for an asset for MBT purposes if you did not elect it for that asset federally.
- Deducting domestic production activities on line 20d: That line specifically excludes deductions under IRC Section 199.
Questions people ask
Does a UBG need one worksheet or a worksheet for each member?
A UBG must complete and attach a separate worksheet for each member.
Where does the final business income amount go?
Carry the amount from line 10, 17, or 25 to Form 4567, line 28. For a UBG member, use Form 4580, Part 2A, line 30.
What if a business-income item does not fit a specific line?
Report it on the most appropriate line and attach an explanation. Treasury may adjust the worksheet result to account properly for uncommon situations.
When is a net bonus depreciation adjustment required?
For MBT business-income calculations, a person who claimed a federal special depreciation deduction under IRC Section 168(k) on property first placed in service in 2008 or later must calculate the adjustment. It equals federal depreciation claimed for the tax year minus the depreciation that would have been claimed without the bonus depreciation allowance.