Michigan Annual Flow-Through Withholding Reconciliation Return (OBSOLETE)

Annual Flow-Through Withholding Reconciliation Return (OBSOLETE)
4918, 2016 Michigan Annual Flow-Through Withholding Reconciliation Return
Reset Form
Michigan Department of Treasury
4918 (Rev. 06-16)

Return is due on or before the last day of the second month after the close of the tax year.

2016 MICHIGAN Annual Flow-Through Withholding Reconciliation Return
Issued under authority of Public Act 38 of 2011.
1. Return is for calendar year 2016 or for tax year

MM-DD-YYYY

MM-DD-YYYY

beginning before 07-01-2016 on:

and ending:

2. Taxpayer Name (print or type)

3. Federal Employer Identification Number (FEIN)

4. Street Address

City

State

ZIP/Postal Code

Country Code

PART 1: APPoRTIoNMeNT PeRCeNTAGeS FoR INCoMe FRoM FloW-THRouGH eNTITIeS (FTes)
5.

Apportionment Percentage for C Corporations

6.

Apportionment Percentage for Individuals

a. Michigan sales .........................

00

a. Michigan sales
(include throwback sales) ........

00

b. Total sales................................

00

b. Total sales................................

00

c. Apportionment percentage.
Divide line 5a by line 5b...........

%

c. Apportionment percentage.
Divide line 6a by line 6b...........

%

PART 2: TeNTATIve DISTRIbuTIve INCoMe

A. — C Corporations
and Intermediate FTes

If unitary with an owner, see instructions.

b. — Individuals

7.
8.

00
00

00
00

Net distributive income subject to withholding before apportionment.
Subtract line 8 from line 7 ...................................................................................

9.

00

00

10. Net distributive income subject to withholding after apportionment. For
column A, multiply line 9 by line 5c. For column B, multiply line 9 by line 6c.......
11. Allocated/apportioned income from another FTE ................................................
12. Personal exemption amount ...............................................................................

10.
11.
12.

00
00

00
00
00

13.
14.
15.

00
00

00
00

7. Tentative distributive income ...............................................................................
8. Subtractions (see instructions)............................................................................
9.

13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.

For column A, add line 10 and line 11; for column B, add line 10 and line 11,
and subtract line 12 ............................................................................................
If unitary, see instructions ...................................................................................
Tax rate ...............................................................................................................

6%

Multiply line 15 by line 13 or line 14, as applicable.
If less than zero, enter zero ................................................................................ 16.
ToTAl WITHHolDING lIAbIlITy. Add line 16, column A, and line 16, column B ................................
Withholding paid on FTW Quarterly Returns (Form 4917) for this tax year............................................
Withholding paid on your behalf by another FTE (must complete and include Part 5; see instructions)
Total withholding paid. Add line 18 and line 19 .......................................................................................
WITHHolDING Due. Subtract line 20 from line 17. If less than zero, leave blank .................................
Annual return penalty (see instructions) .................................................................................................
Annual return interest (see instructions) .................................................................................................
PAyMeNT Due. If line 21 is blank, go to line 25. Otherwise, add lines 21, 22 and 23 ..........................
Overpayment. Subtract lines 17, 22 and 23 from line 20. If less than zero, leave blank and see instr. .
Amount from line 25 to be distributed to members .................................................................................
ReFuND. Subtract line 26 from line 25 ..................................................................................................

Taxpayer Certification. I declare under penalty of perjury that the information in this
return and attachments is true and complete to the best of my knowledge.

4.25%

00

00
00
00
00
00
00
00
00
00
00
00
00

17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.

Preparer Certification. I declare under penalty of perjury that this return
is based on all information of which I have any knowledge.
Preparer’s PTIN, FEIN or SSN

By checking this box, I authorize Treasury to discuss my return with my preparer.
Authorized Signature for Tax Matters
Authorized Signer’s Name (print or type)
Title

+

9999 2016 50 01 27 8

Preparer’s Business Name (print or type)
Date

Preparer’s Business Address and Telephone Number (print or type)

Telephone Number

Continue on Page 2

4918, Page 2

Taxpayer FEIN

PART 3: FloW-THRouGH WITHHolDING FoR oWNeRS THAT ARe C CoRPoRATIoNS AND INTeRMeDIATe FTeS

28.

A.

b.

C Corporation and FTe Information

Amount of Withholding
to be Distributed

Business Name

FEIN

Address

Tent. Distributive Share Bus. Income

City

State

ZIP/Postal Code

Tax Year End (MM-DD-YYYY)

Business Name

FEIN

Address

Tent. Distributive Share Bus. Income

City

State

ZIP/Postal Code

Tax Year End (MM-DD-YYYY)

Business Name

FEIN

Address

Tent. Distributive Share Bus. Income

City

State

ZIP/Postal Code

Tax Year End (MM-DD-YYYY)

Business Name

FEIN

Address

Tent. Distributive Share Bus. Income

City

State

ZIP/Postal Code

Tax Year End (MM-DD-YYYY)

Business Name

FEIN

Address

Tent. Distributive Share Bus. Income

City

State

ZIP/Postal Code

Tax Year End (MM-DD-YYYY)

Business Name

FEIN

Address

Tent. Distributive Share Bus. Income

City

State

ZIP/Postal Code

Tax Year End (MM-DD-YYYY)

Business Name

FEIN

Address

Tent. Distributive Share Bus. Income

City

State

ZIP/Postal Code

Tax Year End (MM-DD-YYYY)

Business Name

FEIN

Address

Tent. Distributive Share Bus. Income

City

+

State

9999 2016 50 02 27 6

ZIP/Postal Code

Tax Year End (MM-DD-YYYY)

Continue on Page 3

4918, Page 3

Taxpayer FEIN

PART 4: FloW-THRouGH WITHHolDING FoR oWNeRS WHo ARe NoNReSIDeNT INDIvIDuAlS

29.

A.

Name

+

9999 2016 50 03 27 4

b.

C.

Check
(X) if a Social Security Number
Fiduciary or, if a Fiduciary, FeIN

D.

e.

Tentative Distributive
Share of Taxable Income

Amount of Withholding
to be Distributed

Continue on Page 4

4918, Page 4

Taxpayer FEIN

PART 5: SouRCe oF FloW-THRouGH INCoMe AlloCATeD, oR WITHHolDING PAID, by ANoTHeR TIeR
Carry the sum of all amounts entered in Column C to Part 2, line 19. If entering an amount in line 19, Part 5 must be completed and
included with the return.
30.

A.

b.

C.

Source Tier Information

Allocated/Apportioned
Income

Amount of Withholding
Paid on your behalf

Business Name
Address
City

State

ZIP/Postal Code

FEIN

Tax Year End (MM-DD-YYYY)

Business Name
Address
City

State

ZIP/Postal Code

FEIN

Tax Year End (MM-DD-YYYY)

Business Name
Address
City

State

ZIP/Postal Code

FEIN

Tax Year End (MM-DD-YYYY)

Business Name
Address
City

State

ZIP/Postal Code

FEIN

Tax Year End (MM-DD-YYYY)

Business Name
Address
City

State

ZIP/Postal Code

FEIN

Tax Year End (MM-DD-YYYY)

Business Name
Address
City

State

ZIP/Postal Code

+

FEIN

9999 2016 50 04 27 2

Tax Year End (MM-DD-YYYY)

Instructions for Form 4918
Annual Flow-Through Withholding Reconciliation Return
If more space is needed for Parts 3, 4 or 5, flow-through entities should go online to www.michigan.gov/taxes to print
out additional pages. Repeat the flow-through entity Federal Employer Identification Number (FEIN) from page one
at the top right of each additional page. NoTe: A Form 4918 that is missing both Part 3 and Part 4 is incomplete and
unprocessable, and will be rejected. Include one, or the other, or both, as dictated by the nature of the members.

Purpose
This form is used to calculate the amount of Flow-Through
Withholding (FTW) due for the tax year, reconcile this amount
with the quarterly payments remitted to the state, and to
distribute the entire amount of FTW to the flow-through entity’s
(FTE’s) members. This form should be used by any FTE with
a tax year beginning before July 1, 2016, that withholds
amounts for purposes of the Individual Income Tax (IIT) or
Corporate Income Tax (CIT) for the tax year; whether source or
intermediate FTE.
NOTE: Under Public Act 233 of 2013, an FTE that has made
a valid election to file Michigan Business Tax (MBT) for the
current tax year is not subject to flow-through withholding with
respect to its members that are C Corporations.
NOTE: Under PA 158 of 2016, Flow-Through Withholding
is no longer required for FTEs with tax years beginning
after June 30, 2016. Treasury will no longer support the
processing of forms or withholding payments for FTEs with
tax years beginning after that date. For FTEs with tax years
beginning before July 1, 2016, a full year’s withholding
payments and annual return should be paid and filed.

General Instructions
Trusts: For purposes of withholding, trusts are not considered
to be flow-through entities or members of flow-through entities.
Because of this, a trust is not required to be withheld on and is
not required to withhold on its beneficiaries. However, if FTW
is done for a trust for the tax year, enter amounts in Column B,
“individuals.”
Exception: Grantor trusts that are disregarded entities for
tax purposes. The FTE is required to withhold directly on
the individual “grantor” if that individual is a nonresident
individual.
Withholding on nonresident individual members. For tax
years that begin before July 1, 2016, very flow-through entity
with business activity in Michigan must withhold on every
member that is a nonresident individual. This withholding is
done at the Individual Income Tax (IIT) rate on the distributive
share of taxable business income reasonably expected to accrue,
after allocation or apportionment, to the nonresident. A flowthrough entity will withhold on its nonresident individual
members at the rate of 4.25 percent.
Withholding on C Corporation members. For tax years that
begin before July 1, 2016, an FTE with business activity in
Michigan that reasonably expects to accrue more than $200,000
in apportioned or allocated business income for the tax year must
withhold on the distributive share of each member that is a C

Corporation at the Corporate Income Tax (CIT) rate of 6 percent.
Withholding on intermediate FTE members (tiered
structures). For tax years that begin before July 1, 2016,
an FTE (a source FTE) with business activity in Michigan
that reasonably expects to accrue more than $200,000 in
apportioned or allocated business income for the tax year must
also withhold on the distributive share of each member that is
a flow-through entity (intermediate flow-through entity) at the
CIT rate of 6 percent.
However, the source flow-through entity may withhold at
the IIT rate instead of the CIT rate if it is able to identify the
ultimate member of the intermediate flow-through entity as a
nonresident individual. The source flow-through entity is not
required to withhold if it is able to identify the ultimate member
of the intermediate flow-through entity as a resident individual.
An intermediate FTE is not required to withhold on its
members under the following circumstances:
• The intermediate FTE’s tax year begins after June 30,
2016. In this case, the FTE should not file any quarterly or
annual Flow-Through Withholding returns. If any source FTE
withheld on behalf of that intermediate FTE, information
should be reported through every tier of FTE until it reaches
the ultimate owner/taxpayer that is eligible to claim the
withholding on a CIT or IIT return. See “What is the overall
structure of the Flow-Through Withholding process” for a list
of the required information.
• The intermediate FTE’s tax year begins before July 1, 2016,
and it has no business income sourced to Michigan, other than
business income from a source FTE. Although the FTE is not
required to pay withholding on behalf of its members, this
FTE is required to file an Annual Flow-Through Withholding
Reconciliation Return (Form 4918) in order to “push through”
the source withholding to the ultimate owner/taxpayers.
Information about each FTE in the tiered structure should be
reported to the ultimate owner/taxpayer.
• Publicly traded partnerships, as defined under Internal
Revenue Code 7704(b), and entities that are disregarded for
federal tax purposes are not required to withhold on their
members under Flow-Through Withholding.
For an FTE that had $200,000 or less in annual business
income after allocation or apportionment to Michigan, but
withheld on members that are C Corporations or other
flow-through entities: Skip line 5 and Column A, lines 7
through 17 and enter the amount withheld on line 18. Complete
Form 4918 from this point. Also complete Line 6 and Column
B where applicable.
This form may not be amended: When filing this form, the
FTE is required to use its “tentative business income” for

15

the tax year. The Department recognizes that this amount
potentially will not be known with certainty at the time this
form is filed. When filing this form, the FTE is required to
use its best estimate of business income based on all available
information. If, after this form is filed, the FTE determines
that its best estimate of business income was incorrect,
the FTE should report that difference to its members. The
members, when filing their respective annual returns, will
correct the over- or under-withholding created by the over- or
understatement of business income.
Parts 3 and 4 of this form distribute the FTW to the FTE’s
members. Part 5 of this form records the FTW paid by source
flow-through entities in a tiered structure that distribute income
and withholding to the FTE filing this form.

tax year. For example, a return for calendar year 2015 is due
February 29, 2016. A return for a fiscal year ending June 30,
2016 is due August 31, 2016.
Under PA 158 of 2016, no Flow-Through Withholding
returns are due for tax years beginning after June 30, 2016.

line-by-line Instructions
Lines not listed are explained on the form.
Line 1: If not a calendar-year FTE, enter the beginning and
ending dates (MM-DD-YYYY) that correspond to the taxable
period included in this return. The period included on this
return must begin before July 1, 2016.

When completing Parts 3 and 4, include only those members
that have been withheld on and only if the FTE’s tax year ends
with or within the tax year of that member. When completing
Part 5, include only source flow-through entities that withheld
on the FTE filing this form.

Tax year means the calendar year, or the fiscal year ending
during the calendar year, of which the withholding base of an
FTE is computed. If a return is made for a part of a year, tax
year means the period for which the return is made. Generally,
an FTE’s tax year is for the same period as is covered by its
federal income tax return. The 2013 form should be used for
the 2013 calendar year or a fiscal year ending in 2014.

Filing When unitary for CIT or IIT

Line 2: Enter the FTE’s name.

For an FTE that is unitary with a CIT taxpayer: If the
FTE filing this form is unitary with a CIT taxpayer, fill out
the Schedule of Unitary Apportionment for Flow-Through
Withholding (Form 4919), and enter the amount from line
5 of Form 4919 on line 14A of this form. Leave lines 5a, 5b,
5c, and 10A of this form blank. For more information on what
constitutes a unitary relationship between an FTE and a CIT
taxpayer, see the instructions for Form 4919.
Flow-through Entities Withholding on an Individual Who
Will Report Using Combined Apportionment for Unitary
Flow-through Entities: An individual owner of flow-through
entities may elect to apportion the business income of its flowthrough entities on a separate entity basis or a unitary basis if
certain criteria are met. If the FTE filing this form withholds
on an individual owner who will report income using combined
apportionment for unitary flow-through entities, the filer
of this form will use a combined sales factor to apportion
the distributive share of business income attributable to the
individual member.
An FTE filing this form that withholds on an individual who
will report income using combined apportionment for unitary
flow-through entities, must fill out Form 4919, using the
instructions provided with that form. Enter the amount from
line 5 of Form 4919, minus available personal exemptions,
on line 14B of this form. Leave lines 6a, 6b, 6c, and 10B and
12B of this form blank. The filer need only use this method
when the individual will report income using combined
apportionment for unitary flow-through entities. For more
information on withholding for an individual who will
report income using combined apportionment for unitary
flow-through entities see the instructions for Form 4919.

Due Dates of Annual Returns
The Flow-Through Withholding annual return is due on or
before the last day of the second month after the end of the

16

Line 3: Enter the FTE’s Federal Employer Identification
Number (FEIN). Be sure to use the same account number on
all forms.
NOTE: The FTE must register for FTW before filing a
this return. Taxpayers are encouraged to register online at
www.michigan.gov/businesstaxes. Taxpayers that register
with Treasury online receive their registration confirmation
within seven days.
NOTE: If the FTE does not have an FEIN, the FTE must
obtain an FEIN before filing. To obtain an FEIN, go to www.
irs.gov and enter “apply for an EIN” in the search field.
Returns received without a registered account number will
not be processed until such time as a number is provided.
Line 4: Enter the FTE’s complete address, including the twodigit abbreviation for the country code. See the list of country
codes in the Corporate Income Tax Forms and Instructions for
Standard Taxpayers (Form 4890).
NOTE: Any refund and/or correspondence regarding the
return filed and/or refund will be sent to the address listed here.
The FTE’s primary address in Treasury records, identified as
the legal address and used for all purposes other than refund
and correspondence on a specific FTW return, will not change
unless the FTE files a Notice of Change or Discontinuance
(Form 163).
FOREIgN FILERs: Complete the address fields as follows:
Address: Enter the postal address for this taxpayer.
City: Enter the city name for this taxpayer. DO NOT
include the country name in this field.
state: Enter the two-letter state or province abbreviation.
If there is no applicable two-letter abbreviation, leave this
field blank.
ZIP/Postal Code: Enter the ZIP Code or Postal Code.

Country Code: Enter the two-letter country code
provided in this tax booklet.
PART 1: APPoRTIoNMeNT PeRCeNTAGeS
FoR INCoMe FRoM FloW-THRouGH eNTITIeS
NOTE: Percentages should be carried out four digits to the
right of the decimal point. Do not round percentages to whole
numbers. For example, 24.154266 percent becomes 24.1542
percent. When converting a percentage to a decimal number,
carry numbers out six digits to the right of the decimal point.
For example, 24.154266 percent becomes 0.241542. Do not
enter a percent symbol (%).
The FTE must only withhold on business activity that is
allocated or apportioned to Michigan. An FTE that has not
established nexus with one other state or a foreign country at
the member level, as explained below, is subject to Michigan
FTW on its entire business activity. If the FTE is able to
apportion its business income, it will be apportioned to
Michigan based on sales. For a Michigan-based FTE, all sales
are Michigan sales unless the FTE’s business activity causes
its members to be subject to tax in another state or foreign
country.
An FTE will cause its C Corporation and intermediate FTE
members to be subject to a tax at the member level in another
state or foreign country if the entity’s business activity is
subject to a business privilege tax, a net income tax, a franchise
tax measured by net income, a franchise tax for the privilege of
doing business, a corporate stock tax; or if the state or foreign
country has jurisdiction to subject the FTE’s business activity
to one or more of the above listed taxes at the member level,
regardless of whether the tax is imposed.
An FTE will cause its nonresident individual members to
be subject to a tax at the member level in another state or
foreign country if the entity’s business activity is subject to
a net income tax, a franchise tax measured by net income, a
franchise tax for the privilege of doing business, or a corporate
stock tax; or if that state or foreign country has jurisdiction to
subject the FTE’s business activity to a net income tax at the
member level, regardless of whether, in fact, the state does or
does not so tax.
Line 5: When calculating the sales factor to use for members
that are C Corporations or intermediate flow-through entities,
sale or sales means the amounts received by the FTE as
consideration from the following:
• The transfer of title to, or possession of, property that is
stock in trade or other property of a kind which would
properly be included in the inventory of the FTE if on hand
at the close of the tax period, or property held by the FTE
primarily for sale to customers in the ordinary course of
its trade or business. For intangible property, the amounts
received will be limited to any gain received from the
disposition of that property.
• Performance of services which constitute business activities.
• The rental, leasing, licensing, or use of tangible or intangible
property, including interest, that constitutes business
activity.

• Any combination of business activities described above.
• For flow-through entities not engaged in any other business
activities, sales include interest, dividends, and other income
from investment assets and activities and from trading
assets and activities.
Use the information in the “Sourcing of Sales to Michigan”
section in the Form 4890 to determine Michigan sales for
members that are C Corporations or intermediate flow-through
entities.
Entities unitary with one or more C corporation members:
Leave lines 5a through 5c blank and continue to line 7.
Entities not unitary with one or more C Corporation
members: Complete line 5 using amounts for the FTE’s
business activity only.
Line 5a: Enter the Michigan sales, as defined for members that
are C Corporations or intermediate flow-through entities, that
are attributable to the FTE.
Transportation services that source sales based on revenue
miles: Enter on this line the FTE’s total sales, as defined for
members that are C Corporations or intermediate flow-through
entities, multiplied by the ratio of Michigan revenue miles
over revenue miles everywhere as provided in the “Sourcing
of Sales to Michigan” chart in Form 4890 for that type of
transportation service. Revenue mile means the transportation
for consideration of one net ton in weight or one passenger the
distance of one mile.
NOTE: Only transportation services are sourced using revenue
miles. To the extent the taxpayer has business activities or
revenue streams not from transportation services, those
receipts should be apportioned accordingly.
Line 5b: Enter the total sales, as defined for members that are
C Corporations or intermediate flow-through entities, that are
attributable to the FTE.
Transportation services that source sales based on revenue
miles: Enter on this line the total sales, as defined for members
that are C Corporations or intermediate flow-through entities,
that are attributable to the FTE.
Line 6: When calculating the sales factor to use for members
that are individuals, sale or sales means all gross receipts of
the taxpayer not allocated under the Individual Income Tax
sections MCL 206.110 through MCL 206.114. Sale or sales
includes gross receipts from sales of tangible property, rental
of property, and providing of services that constitute business
activity. Exclude all receipts from nonbusiness income.
NOTE: Throwback sales for individual income tax follow
federal P.L. 86-272 standards. The business must have physical
presence in the other state or activity beyond solicitation of
sales of tangible personal property in order to exclude sales
into another state or country from the numerator. The Michigan
income tax act definition of “state” includes a foreign country.
Therefore, foreign sales are considered Michigan sales unless
the business entity is taxable in the foreign country.
Sales of tangible personal property are in this state if:
• The property is shipped or delivered to a purchaser (other
than the United States government) within Michigan

17

regardless of the free on board (F.O.B.) point or other
conditions of the sale, or
• The property is shipped from an office, store, warehouse,
factory or other place of storage in Michigan and the
purchaser is the United States government or the taxpayer is
not taxable in the state of the purchaser.

Line 7 and the worksheet should account for total tentative
distributive income, including, where applicable, distributive
share income of a source entity that distributed withholding
directly to the filer instead of the filer’s members on an
Annual Flow-Through Withholding Reconciliation Return
(Form 4918).

Sales other than of tangible personal property are in Michigan
if:

NOTE: For an FTE with a tax year beginning before July 1,
2016, that had $200,000 or less in annual business income after

• The business activity is performed in Michigan, or
• The business activity is performed both in Michigan and in
another state(s), but based on cost of performance, a greater
proportion of the business activity is performed in Michigan.
If the FTE filing this form withholds on a non-resident
individual who will report income using combined
apportionment for unitary flow-through entities: Leave
lines 6a through 6c blank and continue to line 7. Otherwise,
complete line 6 using the sales that are attributable to the FTE.
Line 6a: Enter the Michigan sales, as defined for members that
are individuals, that are attributable to the FTE. Include on this
line any “throwback sales” of the FTE.
Transportation services that source sales based on revenue
miles: Enter on this line the FTE’s total sales, as defined
for members that are individuals, multiplied by the ratio
of Michigan revenue miles over revenue miles everywhere
as provided in the “Sourcing of Sales to Michigan” chart in
Form 4890 for that type of transportation service. Revenue
mile means the transportation for consideration of one net ton
in weight or one passenger the distance of one mile.
Line 6b: Enter the total sales, as defined for members that are
individuals, that are attributable to the FTE.
Transportation services that source sales based on revenue
miles: Enter on this line the total sales, as defined for members
that are individuals, that are directly attributable to the FTE.
PART 2: TeNTATIve DISTRIbuTIve INCoMe
If unitary with an owner, see “Filing When Unitary for CIT or
IIT” earlier in these instructions.
Line 7: Because this reconciliation return is required to be filed
before the FTE’s federal form, Treasury recognizes that this
amount will be “tentative.” When completing this form, use the
best available information to come up with the most reasonable
estimate for business income at the time this form is filed. If it
is later determined that the distributive income is different
than what was reported on line 7A or 7B, report this
difference to the members that have been withheld on. The
members can then account for this change when filing the CIT
Annual Return (Form 4891) if the member is a C Corporation,
or the Michigan Individual Income Tax Return (MI-1040) or
Michigan Composite Individual Income Tax Return (Form 807)
if the member is an individual. The FTE is not permitted to
amend this reconciliation return.
Use the following Tentative Distributive Income Worksheet to
calculate the FTE’s tentative distributive income. Retain a copy
of this worksheet for your files.

18

allocation or apportionment to Michigan but withheld on members
that are C corporations or other flow-through entities, skip line 5
and Column A, lines 7 through 17 and enter the amount withheld
on line 18. Complete Form 4918 from this point. Also complete
line 6 and Column B where applicable.

Distributive Income Worksheet
Column A is the list of amounts that are added together to total tentative
distributive income for C Corporation members that is reported on line 7A of
Form 4918. Column B is the list of amounts that are added together to total
tentative distributive income for individual members that is reported on line 7B
of Form 4918. If the FTE is a partnership or an entity that files federally as a
partnership, this information can be found on U.S. Form 1065, Schedule K. If
the FTE is an S Corporation or an entity that files federally as an S Corporation,
these amounts can be found on U.S. Form 1120S, Schedule K. Enter in column
A only the amounts that are attributable to members that are intermediate flowthrough entities that have been withheld on or C Corporations (including C
Corporations that have opted out of FTW) as reported on the Schedule K-1
that has been issued to each member. Do not report amounts in column A
if the FTE had $200,000 or less in annual business income after allocation
or apportionment to Michigan and did not withhold on members that are C
corporations or other flow-through entities. Enter in Column B only the amounts
that are attributable to members that are individuals — this includes resident
and nonresident individuals — as reported on the Schedule K-1 that has been
issued to each member.

Tentative Distributive Income for
C Corporations and other FTes
Ordinary income (loss) from trade or
business activity
Net income (loss) from rental real estate
activity
Net income (loss) from other rental
activity

A

b

Tentative
Distributive
Income for
C Corporations

Tentative
Distributive
Income for
Individuals

Portfolio income (loss):
Interest income
Dividend income
Royalty income
Net short-term capital gain (loss)
Net long-term capital gain (loss)
Guaranteed payments

*

Net gain (loss) under section 1231
Other income (loss)
ToTAl DISTRIbuTIve INCoMe
Add all amounts in Column A and carry
to Form 4918, line 7A. Add all amounts
in Column B and carry to Form 4918,
line 7B.

XXXXXXXX

ColuMN A
Business income means federal taxable income. For CIT purposes, federal
taxable income means taxable income as defined in IRC § 63, except that federal
taxable income shall be calculated as if section 168(k) (bonus depreciation for
qualified property) and section 199 (qualified production activities deduction)
were not in effect. For a tax-exempt taxpayer, business income means only
that part of federal taxable income (as defined for CIT purposes) derived from
unrelated business activity.
ColuMN b
* Guaranteed payment as defined under the Internal Revenue Code of 1986
Section 707(c) is determined to be compensation for services rendered or
for the use of capital and is not considered to be a distributive share of the
partnership’s profits. The payment, to the extent included in federal adjusted
gross income, is characterized as compensation or interest on the individual’s
return. A nonresident partner is taxed on a guaranteed payment to the extent the
payment is includable in federal adjusted gross income and is for compensation
received for personal services performed in this State. A guaranteed payment for
the use of capital is allocated to the nonresident partner’s state of domicile. For
nonresident individual members, no adjustments for “bonus depreciation” or the
domestic production activities deduction are required.

Taxpayers and tax professionals are expected to be familiar
with uncommon situations within their experience, which
produce income not identified by specific lines on the
preceding worksheet, and report that amount on line 7A or 7B,
as applicable. Treasury may adjust the figure resulting from the
worksheet to account properly for such uncommon situations.
Line 7A: Enter on this line the FTE’s total tentative distributive
income that is attributable to members that are flow-through
entities or C Corporations; including C Corporations that have
opted out of FTW. Also include, where applicable, distributive
share income of a source entity that distributed withholding
directly to the filer instead of the filer’s members.
NOTE: If a source FTE withheld on behalf of an intermediate
FTE with a tax year beginning after June 30, 2016, that
intermediate FTE should not file this form, not even to report
or “push though” source FTE income and withholding.
Instead, that intermediate FTE should report information about
itself and the source FTE, including owners’ shares of the
withholding the source entity paid, through tiers to the ultimate
owner/taxpayers. See “Reporting Withholding to Members” in
booklet 5014 for more information.
Line 7B: Enter on this line the FTE’s tentative distributive
income that is attributable to members that are individuals,
including individuals that are residents of Michigan. Also
include, where applicable, distributive share income of a source
entity that distributed withholding directly to the filer.
NOTE: If a source FTE withheld on behalf of an intermediate
FTE with a tax year beginning after June 30, 2016, that
intermediate FTE should not file this form, not even to report
or “push though” source FTE income and withholding.
Instead, that intermediate FTE should report information about
itself and the source FTE, including owners’ shares of the
withholding the source entity paid, through tiers to the ultimate
owner/taxpayers. See “Reporting Withholding to Members” in
booklet 5014 for more information.
Line 8A: Enter as a positive number the sum of the following
amounts:
• Income received by the FTE filing this form (intermediate)
as a distributive share from another FTE (source) that

is not unitary with the intermediate FTE and another C
corporation member. In a tiered structure, if the FTE filing
this form (intermediate) earns income as a distributive
share from another FTE (source) that is not unitary with the
intermediate and a C corporation member, that income will
be apportioned according to the source entity’s sales factor.
Thus, income received as a distributive share from a source
FTE is subtracted prior to apportionment of the filer’s own
tentative distributive income and added back to the total
after the filer’s apportionment. This subtraction preserves
the source entity’s sales apportionment as applied to the
distributive share income received by the filer from the
source entity. Note that this subtraction applies only if the
intermediate FTE is not unitary with the source and the C
corporation taxpayer, plus,
• The sum of the amounts listed in column C of the FlowThrough Withholding Opt-Out Schedule (Form 4920), if
the FTE received an exemption certificate from one or more
members. Include with this filing a completed Form 4920.
Retain the exemption certificates received by the FTE for
your records.
• This entity’s allocable share of income from a source FTE
that has a valid election for the current year to file MBT.
• Distributive income that would lead to withholding that
is in violation of distribution restrictions under certain
federal and state housing programs. See “Exemption Where
Withholding Violates Distribution Restrictions” in the
“Exemptions from Flow-Through Withholding” section of
the Flow-Through Withholding Instruction Booklet (Form
5014).
Line 8B: Enter as a positive number, the sum of the following:
• The amount of the distributive share income reported on line
7B from the FTE filing this return and from a source FTE
that is allocated to members that are both individuals and
Michigan residents, plus,
• Income received by the filer as a distributive share from
a source FTE to the extent that income is allocated to
nonresident individual members, unless the source FTE will
apply the same combined apportionment factor which will
be used by the filer of this form.
Line 9: Subtract line 8A from line 7A and subtract line 8B
from line 7B. This line represents the net distributive income
subject to withholding which will be apportioned using the
filer’s apportionment factor.
Line 10A: If unitary with a CIT taxpayer, leave line 10A blank.
This amount is calculated on Form 4919 and brought into Form
4918 on line 14.
Line 10B: If the FTE filing this form withholds on an
individual who will report income using combined
apportionment for unitary flow-through entities, leave line 10B
blank. This amount is calculated using Form 4919 and brought
into Form 4918 on line 14.
Line 11A: Enter on this line, apportioned or allocated income
received as a distributive share from a source FTE that is not
unitary with the filer and the filer’s owner, to the extent that
the income was subtracted on line 8A. The amount entered

19

on this line may not be greater than the amounts entered in Part
5, line 30B.
Line 11B: Enter on this line, to the extent that the income
was subtracted on line 8B, apportioned or allocated income
received as a distributive share from a source FTE to the extent
the distributive share income is attributable to members that
are non-resident individuals and the source FTE did not apply
the same combined apportionment factor as the filer of this
form. This process of subtraction and addition preserves the
source entity’s sales apportionment factor as applied to the
distributive share income received by the filer from the source
entity. The amount entered on this line may not be greater than
the amounts entered in Part 5, line 30B.
Line 12B: If the FTE filing this form does not withhold on an
individual who is an owner of unitary flow-through entities,
enter as a positive number the amount of personal exemption
claimed on individuals. An FTE may deduct the same
proportion of the total amount of personal and dependency
exemptions that its nonresident individual members would
be entitled to deduct on an MI-1040. Please note that these
exemptions should only be taken one time throughout multiple
levels of income in a tiered structure situation.
The amount of personal exemption available must be deducted
after allocation or apportionment. Therefore, if the FTE filing
this form withholds on any individual who will report income
using combined apportionment for unitary flow-through
entities, leave line 12B blank. This amount is calculated using
the instructions to Form 4919. The result carried to line 14B.
Line 13A: Add lines 10 and 11. This is total net distributive
income after apportionment but before application of the
unitary apportionment factor for flow-through entities that are
unitary with the CIT taxpayer.
Line 13B: Add lines 10 and 11 and subtract line 12. If less
than zero, enter zero. This is total net distributive income after
apportionment, less allowable personal exemptions.
Line 14A: If the FTE is unitary with the CIT taxpayer, the
FTE must complete Form 4919. Enter on this line the amount
entered on line 5 of Form 4919 plus any amount reported on
line 11A of Form 4918. Include a completed Form 4919 with
this Annual Reconciliation. If the FTE is not unitary with a
CIT taxpayer, leave line 14A blank.
Line 14B: If the FTE filing this form withholds on an
individual who will report income using combined
apportionment for unitary flow-through entities, the FTE must
complete Form 4919. Enter on this line the amount entered on
line 5 of Form 4919 plus any amount reported on line 11B of
Form 4918 and minus the entire amount of personal exemption
claimed on individuals. If the FTE must complete Form 4919,
line 12B of the 4918 must be blank. Include a completed Form
4919 with this Annual Reconciliation.
If the FTE does not withhold on an individual who will report
income using combined apportionment for unitary flowthrough entities, leave line 14B blank.
For a further explanation of what constitutes a unitary
relationship, see the instructions to Form 4919.

20

Line 16A: If the FTE is not unitary with the CIT taxpayer,
multiply line 15A by line 13A. If the FTE is unitary with the
CIT taxpayer, multiply line 15A by line 14A. If less than zero,
enter zero. The sum of all of the amounts entered on line 28B
may be equal to or greater than (when line 26 is greater than
zero) the amount entered on this line.
Line 16B: If the FTE does not withhold on an individual who
will report income using combined apportionment for unitary
flow-through entities, multiply line 15B by line 13B. If the
FTE withholds on an individual who will report income using
combined apportionment for unitary flow-through entities,
multiply line 15B by line 14B. The sum of all of the amounts
entered on line 29E may be equal or greater (when line 26 is
greater than zero) than the amount entered on this line.
Line 18: Enter the total FTW paid with the FTW Quarterly
Tax Return (Form 4917) or the amount paid through Electronic
Funds Transfer (EFT). Include all payments made that apply
to the tax year included in this return. For example, consider
an FTE partnership with a December 31, 2016 year end and
its owner/taxpayer with a June 30, 2017 year end. The FTE
will make quarterly FTW payments by April 15, 2016, July
15, 2016, October 15, 2016, and January 15, 2017, and will file
an annual FTW reconciliation return (Form 4918) for its year
ending December 31, 2016 by February 28, 2017. Because the
FTE’s tax year ends within the owner/taxpayer’s 2016-2017 tax
year, all the FTW payments on behalf of that owner/taxpayer
are attributable to the owner/taxpayer’s 2016-2017 fiscal year,
regardless of the dates of the quarterly payments.
Line 19: If the FTE filing this return is an intermediate
member of a source FTE and has been withheld on by a source
FTE, enter on this line amounts that have been withheld on this
FTE by its source FTE. The sum of all of the amounts entered
in Part 5, line 30C, may not be greater than the amount entered
on this line.
Line 21: If the amount entered on Line 20 is less than the
amount entered on Line 17, enter the difference on this line. If
the amount on Line 20 is greater than the amount entered on
Line 17, leave this line blank and continue to line 22.
Line 22: Enter the overdue withholding penalty. Use the
following “Overdue Withholding Penalty” worksheet. Refer
to the “Computing Penalty and Interest” section in the FlowThrough Withholding Reconciliation Return booklet general
instructions to determine the appropriate penalty percentage.
WoRKSHeeT – oveRDue WITHHolDING PeNAlTy
A. Withholding due from
Form 4918, line 21 ...................................
B. Late or insufficient payment
penalty percentage ...................................
C. Multiply line A by line B .........................

00
%
00

Carry amount from line C to Form 4918, line 22.

Line 23: Enter the overdue withholding interest. Use the
following “Overdue Withholding Interest” worksheet. Refer
to the “Computing Penalty and Interest” section in the FlowThrough Withholding Reconciliation Return booklet general
instructions to determine the appropriate penalty percentage.

WoRKSHeeT – oveRDue WITHHolDING INTeReST
A. Withholding due from
Form 4918, line 21 ...................................
B. Applicable daily interest percentage .......
C. Number of days return was past due .......
D. Multiply line B by line C ........................
E. Multiply line A by line D .......................

00
%
%
00

Carry amount from line E to Form 4918, line 23.

Line 28B: Enter on this line the amount withheld and reported
to this C Corporation or intermediate FTE. The total amount
of withholding entered in this column must be equal or greater
than the amount entered on line 16A.
PART 4: FloW-THRouGH WITHHolDING FoR
NoNReSIDeNT INDIvIDuAlS

NOTE: A Form 4918 that is missing both Part 3 and Part 4 is
incomplete and will be rejected. Include Part 3, Part 4, or both,
as dictated by the nature of the members.
Line 29A: Enter the name of each nonresident individual that
was withheld on during the filing period listed on this return.

NOTE: If the late period spans more than one interest rate
period, divide the late period into the number of days in each
of the interest rate periods identified in the “Computing Penalty
and Interest” section in Form 4890, and apply the calculations
in the “Overdue Withholding Interest” worksheet separately
to each portion of the late period. Combine these interest
subtotals and carry the total to line 23.

Line 29B: Trusts are not required to be withheld on under
FTW. However, if a trust was withheld on, enter an “X” on this
line for each trust that was withheld on.

Line 25: If the amount of tax overpayment is less than zero,
enter the difference as a positive number on line 24. This
means the filer does not have an overpayment but owes more
withholding. If the amount of tax overpayment is positive, that
amount may either be refunded to the FTE or distributed to the
members of the FTE, at the filer’s election. The overpayment
may not be carried forward to the FTE’s next tax period.

Line 29D: Enter on this line the distributive share of taxable
income allocated to this nonresident individual, before
allocation and apportionment, during the filing period listed on
this return. The total amount of taxable income entered in this
column D must be equal to (or greater than, if line 26 is greater
than zero) the amount entered on line 9B.

Line 29C: Enter the social security number of this nonresident
individual. If a trust was withheld on, enter the FEIN of the trust.

Line 26: Enter amount of overpayment from line 25 to be
distributed to the members of the FTE. Note that overpayment
amounts to be distributed to members must be accounted for in
Parts 3 and 4.

Line 29E: Enter on this line the amount withheld and reported
to this nonresident individual. The total amount of withholding
entered in this column must be equal or greater than the
amount entered on line 16B.

Line 27: Enter amount to be refunded to the FTE filing this
form.

PART 5: PART 5: SouRCe oF FloW-THRouGH
INCoMe AlloCATeD, oR WITHHolDING PAID, by
ANoTHeR TIeR

Reminder: The FTE must sign and date returns. Preparers
must provide a Preparer Taxpayer Identification Number
(PTIN), FEIN or Social Security number (SSN), as well as a
business name, business address and phone number.
PART 3: FloW-THRouGH WITHHolDING
FoR C CoRPoRATIoNS

NOTE: A Form 4918 that is missing both Part 3 and Part 4 is
incomplete, and will be rejected. Include Part 3, Part 4, or both,
as dictated by the nature of the members.
Line 28A: Enter the name, FEIN, address, and tax year end
of each C Corporation or intermediate FTE that the FTE has
withheld on during the filing period listed on this return. Also
enter on this line the distributive share of tentative business
income allocated to the C Corporation or intermediate FTE,
before allocation and apportionment, during the filing period
listed on this return. The total amount of distributive business
income entered in this column A must be equal to (or greater
than, if line 26 is greater than zero) the amount entered on line
9A.
If the FTE is unitary with a CIT taxpayer, enter that CIT
taxpayer first in this part.
NOTE FOR COMPLETINg PART 3: If the C Corporation
owner’s address is outside the United States, include the name
of the country immediately after the name of the city, separated
by a comma, in the City field.

Line 30A: Enter the name, FEIN, address, and tax year end of
each source FTE from which this filer (an intermediate FTE)
earned a distributive share. If the FTE withholds on an owner
that will report using combined apportionment, and the source
FTE is one of those unitary entities, enter those source FTEs first
in this list.
NOTE FOR COMPLETINg PART 5: If the source entity’s
address is outside the United States, include the name of the
country immediately after the name of the city, separated by a
comma, in the City field.
Line 30B: Enter on this line the allocated or apportioned
distributive share of income distributed by the source FTE
to the filer. The total amount of allocated or apportioned
distributive share income entered in this column must be equal
to or greater than the sum of amounts entered on lines 11A and
11B. (See the instructions for line 11A and line 11B.)
Line 30C: Enter on this line amounts withheld by the source
FTE on behalf of the filer and entered on line 19 of this return.
The total amount withheld on behalf of the filer and entered in
this column must equal the amount entered on line 19 of this
return.

21

Mailing Addresses
Mail the annual return and all necessary schedules to:
With payment:
Michigan Department of Treasury
PO Box 30806
Lansing MI 48909
Without payment:
Michigan Department of Treasury
PO Box 30805
Lansing MI 48909
Make all checks payable to “State of Michigan.” Print
taxpayer’s FEIN, the tax year, and “FTW” on the front of the
check. Do not staple the check to the return.

22