MI-461: Excess Business Loss (2024)
Michigan · Michigan Treasury · Used for tax years 2024
The 2024 Michigan MI-461, Excess Business Loss, determines the Michigan portion of federal business income or loss included in adjusted gross income. It also calculates the possible Michigan portion of excess business loss treated as a Michigan net operating loss in the following
Who files this form
Taxpayers who have a federal excess business loss limitation must file Michigan Form MI-461.
The form determines the Michigan portion of federal business income or loss included in adjusted gross income (AGI). It also determines the possible Michigan portion of excess business loss that becomes a Michigan net operating loss (NOL) in the following tax year.
For 2024, the federal business loss limits are:
- $305,000 for single filers, married taxpayers filing separately, and fiduciary filers.
- $610,000 for joint filers.
What you'll need
Include a copy of your federal income tax return with the applicable schedules and statements supporting the excess business loss. The instructions list:
- U.S. Form 1040.
- U.S. Form 1040 Schedules 1, B, C, D, E, and F, as applicable.
- U.S. Forms 461, 4797, and 4835, as applicable.
- Schedule K-1 forms.
- Any other applicable documentation.
Also provide a statement showing the type of business activity and its location, including city and state, for each source of income or loss.
Include Form MI-1040H if any income or loss is subject to apportionment. If you have more than 12 entries, use the 2024 Excess Business Loss Continuation Schedule, Form 5606.
Common mistakes
- Completing lines 4 through 10 without the instructions. The form specifically says you must use the line-by-line instructions for these lines.
- Adding income or loss that is not on U.S. Form 461, line 14. Column D must include only the income or loss reported on that federal line.
- Leaving out continuation schedule totals. Include amounts from all Forms 5606 on line 3. Line 3, column D must match U.S. Form 461, line 14.
- Duplicating adjustments. Do not adjust for the same income or loss more than once on Michigan Schedule 1 or report it more than once on Schedule NR.
Questions people ask
What identifying number should I enter?
Individual income tax filers enter their full nine-digit Social Security number. Fiduciary filers enter the estate or trust's full Federal Employer Identification Number (FEIN).
How do I show income and losses?
Enter income as a positive number and losses as negative numbers in the allowable and excess business loss table.
Are guaranteed payments to partners Michigan business income?
No. Michigan does not consider guaranteed payments to partners business income. The instructions require guaranteed payments included in U.S. Form 461, line 14 to be combined as one entry, with adjustments reported on line 6.
When can I claim a Michigan excess business loss as an NOL?
A Michigan excess business loss becomes a Group 2 NOL available to claim in the following tax year. See Form 5674 and its instructions for more information. The excess business loss in line 10, column F is not attributable to Michigan and is not a Michigan NOL.