4894: Schedule of Shareholders and Officers* (2024)
Michigan · Michigan Treasury · Used for tax years 2024
Form 4894 is the 2024 Michigan Corporate Income Tax Schedule of Shareholders and Officers for corporations claiming the Small Business Alternative Credit. It reports shareholder ownership, officer and shareholder compensation and income, and family relationships used to determine
Who files this form
Corporations claiming the Small Business Alternative Credit (SBAC) must complete Form 4894 and include it when filing Form 4893 as part of their annual tax return.
This includes limited liability companies that have elected to be taxed federally as C corporations.
A unitary business group (UBG) must complete a separate Form 4894 for each standard member, meaning a member that is not an insurance company or financial institution.
What you'll need
Have these forms and details available to complete the schedule:
- Form 4891, CIT Annual Return: Use the taxpayer name and account number reported on page 1.
- Form 4893, CIT Small Business Alternative Credit: You will transfer compensation totals to this form and use its line 6 to calculate each shareholder's share of modified business income or loss.
- Shareholder and officer details: Names, Social Security numbers or FEINs, officer status, stock ownership percentages, and attributable family relationships.
- Income and compensation details: Dividends, salaries, wages, director fees, employee insurance payments, and pensions attributable to each shareholder or officer.
- For UBGs: The designated member's and reporting member's identifying information, plus Form 4897, CIT Data on UBG Members, for the column M calculation.
How to file
Include completed Form 4894 with Form 4893 as part of your annual tax return filing. The supplied text does not give a mailing address or e-file directions.
Complete Parts 2 and 3 before Part 1. Transfer Part 1, line 1 to Form 4893, line 7, and Part 1, line 2 to Form 4893, line 8.
If you need more space, include additional copies of Form 4894. Repeat the taxpayer name and FEIN on each copy of page 1 and carry the FEIN to pages 2 and 3. Continue the identifying-number sequence across copies. If more than one Form 4894 is included, put the combined totals for lines 1 and 2 on the top form.
Common mistakes
- Not accounting for all stock: You must account for 100% of the stock. Missing stock ownership information may delay processing.
- Entering annualized amounts on the form: For short tax years or part-year shareholders or officers, report actual amounts for the applicable period. Perform required annualization calculations off-form to determine eligibility, credit reduction, and active shareholder status.
- Leaving out compensation earned outside Michigan: Include all applicable compensation, insurance payments, and pension payments, whether or not the person worked in Michigan.
- Using inconsistent identifying numbers: Use matching numbers in columns A, H, and O, and continue the sequence on additional copies.
- Using commas or number ranges in Part 3: Separate relationship numbers with dashes and list every number. For example, use “5-6-7-8,” not “5-8” to mean 5 through 8.
Questions people ask
Who counts as an active shareholder?
An active shareholder owns at least 5% of outstanding stock, including ownership through attribution, and receives at least $10,000 in compensation, director fees, or dividends from the business. For short-period returns or part-year shareholders, annualize those payments off-form when applying this test.
Which family relationships must be reported?
Attributable family relationships include spouses, parents, children, and grandchildren. All attributable family members of people who directly owned stock during the tax year must be listed in Parts 2 and 3. The attribution rules do not distinguish between adult and minor children.
What if a shareholder has no attributable family relationship?
Enter an “X” in Part 3, column T when no attributable relationship exists and columns P through S are blank.
What if someone does not have a Social Security number or FEIN?
An individual or foreign entity without either number may enter “APPLD FOR” or “FOREIGNUS” in column C.
How does a UBG determine the allocated income disqualifier?
Combine all items paid or allocable to the same shareholder or officer by all members of the UBG when calculating this disqualifier.