4900: Unitary Relationships with Flow-Through Entities* (2024)
Michigan · Michigan Treasury · Used for tax years 2024
Michigan Form 4900 reports flow-through entities that have a unitary relationship with a Corporate Income Tax taxpayer for apportionment purposes. It lists ownership percentages, Michigan and total sales, and intercompany sales eliminations to calculate the taxpayer’s proportiona
Who files this form
Form 4900 is for a Michigan Corporate Income Tax (CIT) taxpayer that is unitary for apportionment purposes with one or more flow-through entities (FTEs). It helps calculate the taxpayer’s apportionment factor.
The taxpayer and FTE must meet both requirements:
- The taxpayer owns or controls, directly or indirectly, more than 50% of the FTE’s voting interests or interests with comparable rights.
- Their activities meet the flow-of-value or business-integration test described in the form’s instructions.
Include only unitary FTEs whose tax year ends with or within the tax year covered by the taxpayer’s CIT Annual Return, Form 4891.
For a Unitary Business Group (UBG), determine ownership at the group level and complete Form 4900 for the entire group. Use Form 4898 for FTEs that are not unitary with the taxpayer.
What you'll need
Have the following information available to complete Form 4900:
- The taxpayer’s name and Federal Employer Identification Number (FEIN), as reported on page 1 of Form 4891. A UBG uses its Designated Member’s name and FEIN.
- Each unitary FTE’s name, FEIN and tax-year ending information.
- Ownership percentages, including the timing of any ownership changes during the taxpayer’s tax year. A UBG uses the entire group’s ownership percentage.
- Each FTE’s Michigan sales and total sales, including sales to the taxpayer and other unitary FTEs reported on this form.
- For transportation services sourced using revenue miles, total sales and Michigan and everywhere revenue miles.
Common mistakes
- Assuming ownership alone makes an FTE unitary. The form requires both the ownership test and the flow-of-value or integration test. The affiliated-group election for corporations does not replace this two-part test for an FTE.
- Including non-unitary FTEs. Report those on Form 4898, not Form 4900.
- Including income from a profits interest. The apportionment calculation uses the FTE’s business activity only. Do not include amounts received from a profits interest in a partnership, S corporation or LLC.
- Using revenue miles for other types of receipts. Only transportation services are sourced using revenue miles. Other business receipts use the sales factor.
- Eliminating sales to an entity excluded from the UBG. Sales to an otherwise related entity cannot be eliminated if that entity is excluded from the UBG.
- Losing track of FTE identifying numbers. Use the same number for each FTE in Columns A, F and K. Continue sequential numbering on additional copies, and repeat the taxpayer’s name and FEIN at the top of every copy.
Questions people ask
What counts as a flow-through entity?
For the applicable tax year, an FTE is an entity treated as an S corporation under Internal Revenue Code section 1362(a), a general partnership, a trust, a limited partnership, a limited liability partnership, or an LLC that is not taxed as a C corporation for federal income tax purposes.
What if my ownership percentage changed during the year?
Enter an average ownership percentage in Column E, weighted by how long each percentage was held during the taxpayer’s tax year. Show four digits after the decimal point.
Does each member of a UBG complete a separate Form 4900?
No. Complete one Form 4900 for the entire group, using additional copies if needed. Use the Designated Member’s name and FEIN and the entire group’s ownership percentages.
Where do the sales totals from Form 4900 go?
Add the entries in Column J and enter the total on Form 4891, line 9b. Add the entries in Column O and enter the total on Form 4891, line 9e.
What if there is not enough space for all unitary FTEs?
Use additional copies of Form 4900. Repeat the taxpayer’s name and FEIN on every copy and continue numbering FTEs from the previous copy.