MI-1041 Schedule NR: Michigan Fiduciary Nonresident Schedule (2024)
Michigan · Michigan Treasury · Used for tax years 2024
The 2024 MI-1041 Schedule NR computes income attributable to Michigan for nonresident estates and trusts. It allocates income and deductions between Michigan and other states and calculates the income taxable to the fiduciary for Form MI-1041.
Who files this form
Nonresident estates and trusts must include Schedule NR with Form MI-1041. Use this schedule to compute the income attributable to Michigan.
What you'll need
Have the estate or trust’s name, Federal Employer Identification Number (FEIN), and U.S. Form 1041 available. Include all applicable federal schedules.
Depending on the income and deductions reported, you may also need:
- MI-1041D: Complete this capital gains and losses schedule before completing line 4.
- MI-1040H: Complete and include this apportionment schedule if business activity is conducted in Michigan and another state.
- MI-4797: Complete this before line 7 if the business-property gains or losses meet the conditions in the line 7 instructions.
- ESBT Tax Worksheet: Submit a copy with the Michigan return when reporting federal taxable income of an Electing Small Business Trust on line 8.
- MI-461: Use line 10 to report excess business loss on Schedule NR, line 8.
- Supporting documentation: Include documentation for each adjustment on line 15b.
- U.S. Form 8995 or 8995-A: Include the applicable form for the qualified business income deduction on line 20.
How to file
Include Schedule NR with Form MI-1041, along with all applicable federal schedules and any required supporting forms or documentation.
For lines 1 through 23, enter the corresponding U.S. Form 1041 amounts in column A, Michigan’s portion in column B, and the non-Michigan portion in column C, following the line-by-line instructions.
Enter the income taxable to the fiduciary from Schedule NR, line 28, on MI-1041, line 12.
The supplied text does not give a mailing address or e-filing instructions.
Common mistakes
- Using the wrong sign for capital losses: Enter the Michigan capital losses on lines 24 and 27 as positive numbers. Leave line 24 blank if MI-1041D, line 15B, shows a capital gain.
- Replacing a negative amount with zero: If line 26 is less than zero, enter the negative number, not “0.”
- Including excluded flow-through entity taxes on line 25: Do not include the allocated share of Michigan flow-through entity taxes deducted on the entity’s federal return.
- Putting the line 8 flow-through entity tax adjustment in column A: For that adjustment, enter the calculated result as a negative number in column B and a positive number in column C. Do not enter an amount in column A.
- Leaving out supporting documents: Include documentation for every line 15b adjustment and a copy of the ESBT Tax Worksheet when reporting ESBT taxable income.
Questions people ask
What do columns A, B, and C mean?
Column A shows the corresponding amounts from U.S. Form 1041. Column B shows Michigan’s portion, and column C shows the non-Michigan portion.
Which income belongs in the Michigan column?
The instructions list income earned, received, or acquired in Michigan; income from personal services performed in Michigan; income from real or tangible personal property located in Michigan; income from a business conducted in Michigan, including its interest, dividends, and other portfolio income; and income of an Electing Small Business Trust.
Which income is not subject to Michigan tax for a nonresident estate or trust?
The instructions list annuity income, retirement and pension income, nonbusiness interest, nonbusiness dividends, and income from a business, trade, profession, or occupation not conducted in Michigan. Enter these amounts in column C on the applicable lines 1 through 8.
What if a business operates in Michigan and another state?
Complete and include the Schedule of Apportionment, Form MI-1040H, to apportion that income.
Where do net operating loss deductions go?
On line 15b, enter any Michigan net operating loss deduction in column B and the entire federal net operating loss deduction, if any, in column C. Include documentation supporting each adjustment.