Michigan Schedule of Shareholders and Officers

Schedule of Shareholders and Officers
4577, 2019 Michigan Business Tax Schedule of Shareholders and Officers
Attachment 07

Michigan Department of Treasury
4577 (Rev. 04-19), Page 1 of 2

2019 MICHIGAN Business Tax Schedule of Shareholders and Officers

For all Corporations claiming the Small Business Alternative or Start-Up Business Credits
Issued under authority of Public Act 36 of 2007.
Taxpayer Name (If Unitary Business Group, Name of Designated Member)

Federal Employer Identification Number (FEIN) or TR Number

Unitary Business Groups Only: Name of Unitary Business Group Member Reporting on This Form

Federal Employer Identification Number (FEIN) or TR Number

PART 1: SHAREHOLDERS AND OFFICERS.
1. A
Member
Number

See instructions.

B

C

Name of shareholder (including corporation, trust, partnership, or family member
who is a shareholder through attribution) or officer (Last, First, Middle)

D

FEIN or
Check
Social Security number (X) if an
of shareholder or officer officer

E

F

G

% Stock
directly owned

% Stock with
attribution
(See instructions.)

% Stock from Col. F less
any attribution between
two active shareholders

%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%

%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%

Percent of stock (not listed above) owned by shareholders who own less than 10% and receive no compensation:

Total:

100

%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%
%

Continue below using the same Member Number references from column 1A.
H

I

Member
Number

Dividends
(used to determine
active shareholders)

J

K

Salaries, wages and/ Employee insurance
or director fees
plans, pensions, etc.

L

M

N

Total compensation and director
fees for officers and/or shareholders. Add columns J and K.

Share of business income/loss
(See instructions.)

Total shareholder/officer
income. Add columns L and M.

If more space is needed, include additional 4577 forms. Identify taxpayer and complete Part 1 and Part 2 on each additional form. (See instructions.)

+

0000 2019 47 01 27 3

Continue on Page 2.

2019 Form 4577, Page 2 of 2

FEIN or TR Number
UBG Member FEIN or TR Number

PART 2: LIST OF FAMILY MEMBERS AND THEIR CORRESPONDING RELATIONSHIP
Using the same Member Number references from Part 1, indicate your attributable family relationship (if any) to each shareholder.
(An attributable family relationship is defined as either a spouse, parent, child or grandchild.)
•
•

If an attributable family relationship exists, designate in columns P through S
If no attributable family relationship exists, check box in column T.

2. O
Member
Number

P

Q

R

S

Spouse

Parent

Child

Grandchild

T

Check (X) if
No Attributable
Relationship

PART 3: SMALL BUSINESS ALTERNATIVE CREDIT. See instructions for definition of active shareholder.
3.

Compensation and director fees of active shareholders. Add amounts in column L for each active
shareholder. Enter here and on Form 4571, line 6 .............................................................................

3.

00

4.

Compensation and director fees of officers. Add amounts in column L for each officer who is not
an active shareholder. Enter here and on Form 4571, line 7..............................................................

4.

00

+

0000 2019 47 02 27 1

Instructions for Form 4577
Michigan Business Tax (MBT) Schedule of Shareholders and Officers

For all Corporations claiming the Small Business Alternative or Start-Up Business Credits
Purpose
To	 determine	 eligibility	 for	 all	 Corporations	 to	 qualify	 for	
the	 Small	 Business	 Alternative	 Credit.	 Corporation	 means	 a	
taxpayer	 that	 is	 required	 or	 has	 elected	 to	 file	 as	 a	 Corporation	
under	the	Internal	Revenue	Code	(IRC).

General Instructions
If	 filing	 as	 a	 Corporation	 (including	 Limited	 Liability	
Companies	 federally	 taxed	 as	 such)	 and	 claiming	 a	 Small	
Business	 Alternative	 Credit,	 complete	 this	 form	 and	 include	 it	
as	part	of	the	annual	return	to	report:
• Shareholder	 and	 C	 Corporation	 officer	 qualifications	 for	 the	
Small	Business	Alternative	Credit;
• Compensation	 and	 director	 fees	 of	 active	 shareholders	 and	
all	 C	 Corporation	 officers	 for	 the	 computation	 of	 the	 Small	
Business	Alternative	Credit.
NOTE:	 A	 member	 of	 a	 Limited	 Liability	 Company	 (LLC)	 is	
characterized	 for	 MBT	 purposes	 as	 a	 shareholder	 if	 the	 LLC	 is	
taxed	as	a	corporation	for	federal	purposes.
NOTE:	 A	 federally	 disregarded	 entity	 is	 required	 to	 file	 as	 if	
it	 were	 a	 sole	 proprietorship	 if	 owned	 by	 an	 individual,	 or	 a	
branch	or	division	if	owned	by	another	business	entity.
This	 form	 also	 is	 required	 to	 be	 completed	 and	 included	 as	
part	 of	 the	 return	 whenever	 a	 corporation	 claims	 a	 Start-Up	
Business	Credit.	To	qualify	for	the	Start-Up	Business	Credit,	the	
compensation,	 director	 fees,	 or	 distributive	 shares	 paid	 by	 the	
taxpayer	to	a	shareholder	of	a	C	Corporation	or	S	Corporation,	or	
an	officer	of	a	C	Corporation,	cannot	exceed	$135,000.

Line-by-Line Instructions
Lines not listed are explained on the form.
Name and Account Number: Enter	name	and	account	number	
as	reported	on	page	1	of	the	MBT Annual Return	(Form	4567).
Unitary Business Groups (UBGs):	 Complete	 one	 form	 for	
each	 member	 that	 is	 a	 corporation	 (including	 an	 entity	 taxed	
federally	 as	 such).	 Enter	 the	 Designated	 Member	 name	 in	 the	
Taxpayer	 Name	 field	 and	 the	 member	 to	 whom	 the	 schedule	
applies	 on	 the	 line	 below.	 On	 the	 copy	 filed	 to	 report	 the	 DM’s	
data	 (if	 applicable),	 enter	 the	 DM’s	 name	 and	 account	 number	
on	each	line.
PART 1: SHAREHOLDERS AND OFFICERS
Line 1 (Columns A through N):	 In	 column	 1A,	 assign	
numbers	 (beginning	 with	 1)	 to	 all	 shareholders	 and	 C	
Corporation	 officers	 in	 order	 of	 percentage	 of	 stock	 ownership	
(percentage	 in	 column	 G),	 starting	 with	 the	 highest	 percentage	
first.	(Repeat	this	numbering	in	Part	1,	line	1H,	and	Part	2,	line	
2O.	 It	 is	 essential	 that	 this	 numbering	 system	 is	 followed.)	 All	
shareholders’	 family	 members,	 as	 defined	 by	 IRC	 §	 318(a)(1),	
are	 considered	 shareholders	 and	 must	 be	 listed	 in	 Part	 1	 and	

Part	 2	 if	 they	 receive	 compensation	 from	 the	 business.	 List	 all	
shareholders	and	C	Corporation	officers	who:
• Are	employees	of	the	Corporation;
• Are	directors	of	the	Corporation;	or
• Own	 10	 percent	 or	 more	 of	 the	 stock	 of	 the	 Corporation,	
including	those	by	attribution.
Shareholder	 means	 a	 person	 who	 owns	 outstanding	 stock	 in	
a	 business	 or	 is	 a	 member	 of	 a	 business	 entity	 that	 files	 as	 a	
corporation	 for	 federal	 income	 tax	 purposes.	 An	 individual	
is	 considered	 as	 the	 owner	 of	 the	 stock	 owned,	 directly	 or	
indirectly,	by	or	for	family	members	as	defined	by	IRC	§	318(a)
(1).
An	 officer	 of	 a	 C	 Corporation	 includes	 the	 chairperson	 of	 the	
board,	 president,	 vice	 president,	 secretary,	 and	 treasurer,	 or	
persons	performing	similar	duties.
A	 family member,	 as	 defined	 by	 IRC	 §	 318(a)(1),	 includes	
spouses,	parents,	children	and	grandchildren.
NOTE:	 Rules	 of	 attribution	 in	 IRC	 §	 318(a)(1)	 do	 not	
differentiate	between	an	adult	and	a	minor	child.
Outstanding stock	 means	 all	 stock	 of	 record,	 regardless	 of	
class,	 value,	 or	 voting	 rights,	 but	 outstanding	 stock	 does	 not	
include	treasury	stock.
All	 attributable	 family	 members	 of	 persons	 directly	 owning	
stock	during	the	tax	year	must	be	listed	in	Parts	2	and	3.
If	 more	 lines	 are	 needed	 for	 listing	 the	 shareholders	 and	 C	
Corporation	 officers,	 include	 additional	 copies	 of	 this	 form.	
Complete	 the	 taxpayer	 name	 and	 account	 number	 on	 each	
copy	 (and	 UBG	 member	 if	 applicable),	 and	 lines	 1	 and	 2	 as	
necessary.		 If	 using	 more	 than	 one	 copy	 of	 the	 form,	 continue	
the	 sequential	 number	 system	 for	 the	 Member	 Number	 in	
columns	A,	H	and	O.
NOTE: Rules	 of	 attribution	 in	 IRC	 §	 318(a)(1)	 do	 not	
differentiate	between	an	adult	and	a	minor	child.
Columns B and C:	 Identify	 each	 shareholder	 (including	
Corporations,	 Trusts,	 or	 Partnerships)	 and	 C	 Corporation	
officers	 by	 name	 and	 Social	 Security	 number.	 Corporations,	
Trusts,	 and	 Partnerships	 should	 be	 identified	 using	 the	 Federal	
Employer	 Identification	 Number	 (FEIN)	 or	 Michigan	 Treasury	
(TR)	assigned	number.
NOTE: Column C:	 An	 individual	 or	 foreign	 entity	 that	 does	
not	 have	 a	 Social	 Security	 number	 or	 FEIN	 may	 enter	 in	
Column	C	“APPLD	FOR”	(an	abbreviation	for	“applied	for”)	or	
“FOREIGNUS”	(an	abbreviation	for	“foreign	filer”).
Column E:	 Enter	 the	 percentage	 of	 outstanding	 stock	
each	 shareholder	 or	 C	 Corporation	 officer	 owns	 directly.	
If	 a	 shareholder	 owned	 stock	 for	 a	 period	 less	 than	 the	
Corporation’s	 tax	 year,	 multiply	 that	 shareholder’s	 percentage	
of	 ownership	 by	 the	 number	 of	 months	 owned	 and	 divide	 the	

97

result	by	the	number	of	months	in	the	Corporation’s	tax	year.

Stock Percentage

Taxpayers	must	account	for	100	percent	of	the	stock.	If	it	is	not	
accounted	for,	processing	of	the	return	may	be	delayed.

Column E

Column F:	 Enter	 the	 percentage	 of	 outstanding	 stock	 each	
shareholder	 owns,	 including	 attribution	 of	 ownership	 from	 family	
members	 under	 IRC	 §	 318(a)(1).	 If	 no	 attribution	 exists,	 enter	 the	
percentage	from	column	E	in	column	G	and	leave	column	F	blank.	
Column G:	 When	 reporting	 ownership	 of	 a	 person	 who	
is	 an	 active	 shareholder,	 do	 not	 include	 in	 Column	 G	 any	
stock	 ownership	 attributed	 to	 this	 person	 from	 another	
active	 shareholder.	 See	 definition	 of	 active	 shareholders	 in	
the	 Part	 3	 instructions.	 For	 the	 purposes	 of	 determining	
disqualification	 for	 the	 Small	 Business	 Alternative	 Credit,	 an	
active	 shareholder’s	 share	 of	 business	 income	 is	 not	 attributed	
to	another	active	shareholder.

Column F

Column G

Husband
(active)

40%

100%
70%
(all shareholders) (husband/wife/son)

Wife
(inactive)

10%

100%
(all shareholders)

100%
(all shareholders)

Son
(inactive)

20%

70% (husband/
wife/son)

70%
(husband/wife/son)

Daughter
(active)

30%

80% (husband/
wife/daughter)

40%
(wife/daughter)

Column I:	 Enter	 total	 dividends	 received	 by	 each	 shareholder	
during	the	tax	year	from	this	business	(used	to	determine	active	
shareholders).	 This	 includes	 regular	 distributions	 for	 an	 S	
Corporation.

EXAMPLE:	 In	 this	 case,	 the	 husband	 and	 daughter	 are	 active	
shareholders	 because	 their	 total	 compensation,	 director	 fees,	 and	
dividends	 from	 the	 business	 are	 greater	 than	 $10,000	 and	 they	
own	 more	 than	 5%	 of	 stock	 (column	 E).	 The	 wife	 and	 son	 are	
not	 active	 because	 their	 total	 compensation,	 director	 fees,	 and	
dividends	 from	 the	 business	 are	 less	 than	 $10,000	 (even	 though	
they	own	more	than	5%	of	stock).

Column J:	 Enter	 salaries,	 wages,	 and	 director	 fees	 that	 are	
attributable	 to	 each	 shareholder	 or	 C	 Corporation	 officer.	
Compensation	 paid	 by	 a	 professional	 employer	 organization	 to	
the	 officers	 of	 a	 client	 (if	 the	 client	 is	 a	 C	 Corporation)	 and	 to	
employees	 of	 the	 professional	 employer	 organization	 who	 are	
assigned	 or	 leased	 to	 and	 perform	 services	 for	 a	 client	 must	 be	
included	in	determining	the	eligibility	of	the	client	for	this	credit.
NOTE:	 If	 a	 shareholder	 owned	 stock	 for	 less	 than	 the	 entire	
tax	 year	 of	 the	 corporation,	 or	 an	 officer	 served	 as	 an	 officer	
less	 than	 the	 entire	 tax	 year,	 report	 only	 the	 salaries,	 wages	
and	 director	 fees	 attributable	 while	 serving	 as	 an	 officer	
or	 shareholder.	 These	 amounts	 must	 be	 annualized	 when	
determining	 disqualifiers,	 but	 should	 be	 reported	 as	 actual	

ATTRIBUTION EXAMPLE:
Larry David Stone
Betty Ann Stone
Mary Elizabeth Stone

Husband of Betty Stone, Father of Mary Stone, Stepfather of Tammie Rock, Step Grandfather of Kathy Rock
Daughter of Bob Pebble, Wife of Larry Stone, Mother of Tammie Rock, Stepmother of Mary Stone, Grandmother of Kathy Rock
Daughter of Larry Stone, Stepdaughter of Betty Stone

Tammie Marie Rock

Daughter of Betty Stone, Stepdaughter of Larry Stone, Spouse of Steve Rock, Mother of Kathy Rock, Granddaughter of
Bob Pebble

Steve Carl Rock
Kathy Evelyn Rock
Mike Joseph Rock
Bob Kenneth Pebble
Terry Robert Marble

Spouse of Tammie Rock, Father of Kathy Rock, Brother of Mike Rock
Daughter of Tammie and Steve Rock, Granddaughter of Betty Stone, Step Granddaughter of Larry Stone
Brother of Steve Rock
Father of Betty Stone, Grandfather of Tammie Rock
Friend

Part 1: Shareholders and officers - See instructions

Part 2: List of family members and their corresponding relationships

1.

2.

A

Member
Number

98

B
Name of shareholder (including corporation, trust, partnership,
or family member who is a shareholder through attribution) or
officer (Last, First, Middle)

O

Member
Number

P

Q

Spouse

1

Stone, Larry David

1

2

2

Stone, Betty Ann

2

1

3

Stone, Mary Elizabeth

3

4

Rock, Tammie Marie

4

5

5

Rock, Steve Carl

5

4

6

Rock, Kathy Evelyn

6

7

Rock, Mike Joseph

7

8

Pebble, Bob Kenneth

8

9

Marble, Terry Robert

9

R

Parent

Child

S

T

Grandchild

Check (X) if
No Attributable
Relationship

3
8

4

6

1
2

6
6

4-5
X
2

4
X

amounts	on	this	form.
NOTE:	 All	 compensation	 must	 be	 included,	 whether	 or	 not	 the	
shareholder	or	C	Corporation	officer	worked	in	Michigan.
Column K:	 Enter	 employee	 insurance	 payments	 and	 pensions	
that	are	attributable	to	each	shareholder	or	C	Corporation	officer.
NOTE:	 If	 a	 shareholder	 owned	 stock	 for	 less	 than	 the	 entire	 tax	
year	 of	 the	 corporation,	 or	 an	 officer	 served	 as	 an	 officer	 less	
than	 the	 entire	 tax	 year,	 report	 only	 the	 employee	 insurance	
payments,	 and	 pensions	 that	 are	 attributable	 while	 serving	 as	
an	 officer	 or	 shareholder.	 These	 amounts	 must	 be	 annualized	
when	 determining	 disqualifiers,	 but	 should	 be	 reported	 as	 actual	
amounts	on	this	form.
NOTE:	All	employee	insurance	payments	and	pensions	must	be	
included,	whether	or	not	the	shareholder	of	C	Corporation	officer	
worked	in	Michigan.
Column L:	 If	 any	 shareholder	 or	 officer	 of	 a	 C	 Corporation	
has	 total	 compensation	 and	 director	 fees	 in	 column	 L	 of	 over	
$180,000	 after	 loss	 adjustment,	 the	 C	 Corporation	 is	 not	 eligible	
for	the	Small	Business	Alternative	Credit.
Column M:	 Multiply	 the	 percentage	 in	 column	 G	 by	 line	 5c	 on	
the	MBT Common Credits for Small Businesses	(Form	4571).
UBGs:	 Multiply	 the	 percentage	 in	 column	 G	 by	 the	 sum	 of	 the	
MBT Unitary Business Group Combined Filing Schedule for
Standard Members	 (Form	 4580),	 Part	 2A,	 lines	 30	 and	 34,	 plus	
capital	loss	deducted	on	the	federal	returns	of	all	members.
Column N:	 If	 any	 shareholder	 	 or	 officer	 has	 total	 income	 in	
column	 N	 of	 over	 $180,000	 after	 loss	 adjustment,	 the	 taxpayer	
is	 not	 eligible	 for	 the	 Small	 Business	 Alternative	 Credit.	 If	 any	
shareholder	 	 or	 officer	 has	 total	 income	 in	 column	 N	 of	 over	
$135,000,	 the	 taxpayer	 is	 not	 eligible	 for	 the	 Start-Up	 Business	
Credit.
PART 2: LIST OF FAMILY MEMBERS AND THEIR
CORRESPONDING RELATIONSHIP TYPE
Columns	 P	 through	 S	 represent	 relationships	 affected	 by	
attribution.
For	 each	 shareholder	 listed	 in	 Part	 1,	 column	 A,	 enter	 the	
corresponding	 number	 of	 the	 shareholder’s	 spouse,	 parent,	
child,	or	grandchild,	if	any,	listed	in	Part	1,	column	A.

O,	 the	 corresponding	 relationship,	 and	 the	 number	 of	 the	
member(s)	with	that	relationship.
Column T:	 Check	 column	 T	 for	 each	 shareholder	 listed	 only	
if	 columns	 P	 through	 S	 are	 blank	 (no	 attributable	 relationship	
exists).
PART 3: Small Business Alternative Credit
Line 3:	 Add	 compensation	 and	 director	 fees	 in	 column	 L	 for	
each	 active	 shareholder	 and	 enter	 the	 result	 on	 line	 3	 and	 on	
Form	4571,	line	6.
An	active	shareholder:
• Is	 a	 shareholder	 of	 the	 Corporation,	 including	 through	
attribution,	AND
• Owns	 at	 least	 5	 percent	 of	 outstanding	 stock,	 including	
through	 attribution	 (column	 E	 or	 F	 =	 5	 percent	 or	 more),	
AND
• Receives	 at	 least	 $10,000	 in	 compensation,	 director	 fees,	
and	 dividends	 from	 the	 business	 (sum	 of	 columns	 I	 and	 L	
=	 $10,000	 or	 more).	 Important:	 For	 short-period	 returns	
or	 a	 part-year	 shareholder,	 compensation,	 director	 fees,	 and	
dividends	of	each	individual	must	be	annualized	to	meet	this	
requirement.
Annualizing
Multiply	 each	 applicable	 amount	 by	 12	 and	 divide	 the	 result	
by	 the	 number	 of	 months	 in	 the	 tax	 year	 the	 business	 operated	
or	 the	 person	 was	 a	 shareholder.	 Generally,	 a	 business	 is	
considered	 in	 business	 for	 one	 month	 if	 the	 business	 operated	
for	more	than	half	the	days	of	the	month.
NOTE: If	the	business	was	in	operation	for	less	than	a	month	it	
is	considered	to	have	been	in	business	for	1	month.
Line 4: Add	the	compensation	and	director	fees	in	column	L	for	
each	 C	 Corporation	 officer	 who	 is	 not	 an	 active	 shareholder	 and	
enter	the	result	on	line	4	and	on	Form	4571,	line	7.
REMINDER: Active	 shareholders	 of	 an	 S	 Corporation	 are	
included	in	the	line	3	calculation,	even	if	the	shareholder	is	also	
a	 C	 Corporation	 officer.	 Because	 the	 definition	 of	 “officer”	 for	
this	 purpose	 does	 not	 apply	 to	 an	 S	 Corporation,	 line	 4	 will	
always	be	blank	for	an	S	Corporation.
Include completed Form 4577 as part of the tax return filing.

If	 more	 than	 one	 number	 is	 entered	 in	 boxes	 P	 through	 S,	
separate	numbers	with	a	dash.	For	example,	if	a	family	member	
has	 three	 children,	 each	 child’s	 member	 number	 should	 appear	
in	the	“Child”	column	with	dashes	separating	them	(“2-3-4”).
Do	 not	 use	 a	 dash	 to	 imply	 included	 numbers	 (such	 as	 “5-8”	
meaning	 “5	 through	 8”),	 but	 instead	 include	 each	 member	
number	(“5-6-7-8”).	Do	not	use	commas.
EXAMPLE (SEE THE ATTRIBUTION EXAMPLE ON
THE PREVIOUS PAGE):	Kathy	Rock’s	(6)	parents	(4	and	5)	
work	for	the	company.	Kathy	will	list	“4-5”	in	column	Q.
NOTE:	 If	 the	 space	 provided	 in	 the	 line	 2	 columns	 is	 not	
adequate	 to	 list	 all	 of	 the	 corresponding	 relationships,	 attach	 a	
separate	 sheet	 of	 paper	 with	 the	 member	 number	 from	 column	

99