5298: City of Detroit Corporate Renaissance Zone Schedule (2024)
Michigan · Michigan Treasury · Used for tax years 2024
Form 5298 is the 2024 City of Detroit Corporate Renaissance Zone Schedule. It reports property, rent, wages and net income to calculate the Renaissance Zone deduction carried to the City Corporate Income Tax Return, Form 5297.
Who files this form
Use Form 5298 to claim the 2024 City of Detroit corporate Renaissance Zone deduction. Include the completed schedule with the tax return.
To qualify, a corporation must:
- Have real and/or personal property in a Detroit Renaissance Zone and conduct business activity there.
- File a Statement of Eligibility with the City of Detroit and obtain approval for tax relief.
- Include a Renaissance Zone Deduction confirmation letter with the return.
Delinquent city or state taxes can disqualify a corporation. The instructions also list eligibility restrictions involving residential rental property, moves into a zone without City approval, and certain job relocations.
When it's due
For the 2024 deduction, a corporation that owns residential rental property must have filed an affidavit with the City Treasurer’s Office by December 31 of the prior tax year. The affidavit must attest that the property substantially complies with applicable state and local zoning, building, and housing laws or codes.
The supplied text does not state a filing due date for Form 5298.
What you'll need
Have these documents and details ready:
- Form 5297, City Corporate Income Tax Return, completed through line 36.
- A photocopy of the business’s Renaissance Zone Deduction confirmation letter, to include with the return.
- The corporation’s name and FEIN. For a consolidated return, also provide the name and FEIN of the entity in the zone.
- The beginning and ending dates the corporation qualified for the deduction during the tax year.
- Average net book values of owned real and tangible personal property, gross annual rent for real property, and employee compensation, separately for Detroit locations and Renaissance Zone locations.
- The zone’s designation period, to determine whether the deduction must be reduced.
How to file
- Complete Form 5297 through line 36 before completing Form 5298.
- Enter the corporation’s identifying information and qualification dates on Form 5298.
- Complete lines 7 through 9 using property, rent, and compensation amounts for Detroit and the Renaissance Zone to calculate the apportionment percentage.
- Enter Form 5297, line 36 net income on line 10. Multiply it by line 9d to calculate the tentative deduction on line 11.
- Apply the percentage from the Reduced Deduction Table on line 12, then calculate the deduction on line 13.
- Carry line 13 to Form 5297, line 37. If filing multiple Forms 5298, enter the total of all their line 13 amounts on Form 5297, line 37.
- Include the completed Form 5298 and a photocopy of the confirmation letter with the tax return.
The supplied text does not provide a mailing address or e-filing directions.
Common mistakes
- Leaving out the confirmation letter. The deduction will not be allowed without it.
- Claiming the deduction while disqualified by tax delinquencies. The instructions list delinquent filing or payment of specified state and local taxes as disqualifying conditions.
- Rounding percentages. Carry percentages to four digits after the decimal point without rounding. When converting a percentage to a decimal, carry it to six digits after the decimal point.
- Starting Form 5298 too soon. Complete Form 5297 through line 36 first.
- Omitting schedules from the total. When filing multiple Forms 5298, carry the total of all line 13 amounts to Form 5297, line 37.
Questions people ask
What income can the corporation deduct?
A corporation may deduct the portion of its net income from business activity within a qualified Renaissance Zone. Lines 7 through 9 calculate the apportionment percentage used to determine that portion.
Does the deduction decrease near the end of the zone’s designation?\n
Yes. The allowed percentage of the tentative deduction depends on when the tax year begins: 75% in the second year before the final year, 50% in the year before the final year, and 25% in the final year. The table allows 100% in the third or an earlier year before the final year.
What if the business was in the zone for less than a year?
The instructions allow a monthly average basis for determining the average net book value of owned real and tangible personal property when the business was in the zone for less than a year.
When does qualification end?
Qualification continues until the corporation stops being located and conducting business activity in a city Renaissance Zone, or until the zone’s designation expires.