Michigan Schedule of Unitary Apportionment for Flow-Through Withholding (OBSOLETE)

Schedule of Unitary Apportionment for Flow-Through Withholding (OBSOLETE)
4919, 2016 Michigan Schedule of Unitary Apportionment for Flow-Through Withholding
Reset Form
Attachment 3

Michigan Department of Treasury
4919 (Rev. 03-16)

2016 MICHIGAN Schedule of Unitary Apportionment
for Flow-Through Withholding
Issued under authority of Public Act 38 of 2011.
Name of Flow-Through Entity (FTE) filing this form

FTE Federal Employer Identification Number (FEIN)

Name of Corporate Income Tax (CIT) taxpayer that is unitary with this FTE

Unitary CIT Taxpayer FEIN

The face-of-the-form instructions below are for a C Corporation that is unitary with the FTE filing this return. For a flow-through entity that withholds on an
individual who will report income using combined apportionment for unitary flow-through entities, refer to the line-by-line instructions.

PArT 1: APPorTIoNMeNT PerCeNTAGeS
1.

2.

Apportionment percentage for the C Corporation that is unitary with this flow-through entity
a.

Michigan sales .............................................................................................................................................

1a.

00

b.

Total sales....................................................................................................................................................

1b.

00

c.

Apportionment percentage. Divide line 1a by line 1b ..................................................................................

1c.

%

Apportionment percentage for C Corporations that are not unitary with this flow-through entity
a.

Michigan sales .............................................................................................................................................

2a.

00

b.

Total sales....................................................................................................................................................

2b.

00

c.

Apportionment percentage. Divide line 2a by line 2b ..................................................................................

2c.

%

PArT 2: DISTrIbUTIve bUSINeSS INCoMe

b.
Non-Unitary C Corps

3. Net Distributive Business Income from Form 4918, line 9A (see instructions) ....

3.

00

00

4. Distributive business income subject to withholding after apportionment.
Column A, multiply line 3 by line 1c; column B, multiply line 3 by line 2c ............

4.

00

00

5.

+

A.
Unitary C Corporation

Total distributive business income subject to withholding for C corporations.
Add lines 4, column A and column B, and carry to Form 4918, line 14, column A .......................................

9999 2016 52 01 27 4

5.

00

Instruction for Form 4919
Schedule of Unitary Apportionment for Flow-Through Withholding
Purpose
To allow a flow-through entity (FTE) that is unitary with
a Corporate Income Tax (CIT) taxpayer to calculate the
distributive business income that is subject to Flow-Through
Withholding (FTW) for its members that are C Corporations
and with which the CIT taxpayer is unitary.
This form will also allow a flow-through entity that withholds
on a non-resident individual for purposes of the Individual
Income Tax (IIT) who will report income using combined
apportionment for unitary flow-through entities to calculate the
distributive taxable income using a combined sales factor.
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.

Filing When Unitary for CIT or IIT
The entire amount of a Michigan-based flow-through entity’s
business income is subject to FTW unless the flow-through
entity is subject to tax in another state or foreign country. If the
flow-through entity is subject to tax in another state or foreign
country, then its business income that is subject to FTW is
apportioned to Michigan. Generally, if the flow-through entity
is subject to tax in another state or foreign country, it will
apportion its business income to Michigan using the flowthrough entity’s sales factor. The flow-through entity’s sales
factor is a fraction. The numerator is the flow-through entity’s
sales that have been sourced to Michigan and the denominator
is the flow-through entity’s total sales.
Flow-Through entities Unitary with a CIT Taxpayer
If the flow-through entity is unitary with a CIT taxpayer, then
it will use a combined sales factor to apportion the distributive
share of business income for that unitary CIT taxpayer. The
flow-through entity will be unitary with a CIT taxpayer if:
• The CIT taxpayer owns or controls, directly or indirectly,
more than 50 percent of the ownership interest of the flowthrough entity with voting rights or ownership interests that
confer comparable rights to voting rights and
• The CIT taxpayer and flow-through entity have business
activities or operations which result in a flow of value
between the CIT taxpayer and the flow-through entity, or
between the flow-through entity and another flow-through
entity unitary with the taxpayer, or has business activities or
operations that are integrated with, are dependent upon, or
contribute to each other.
If the unitary requirements are satisfied, then the numerator
of the sales factor used to apportion the flow-through entity’s
business income must include the Michigan sales of the unitary
CIT taxpayer, the proportionate share of the Michigan sales of
the flow-through entity filing this return, and the proportionate
share of the Michigan sales of other flow-through entities that

are unitary with the CIT taxpayer and the flow-through entity
filing this return.
The denominator must include the total sales everywhere of
the CIT taxpayer, the proportionate share of the total sales
everywhere of the flow-through entity filing this return, and the
proportionate share of the total sales everywhere of other flowthrough entities that are unitary with the CIT taxpayer and the
flow-through entity filing this return.
All sales between the CIT taxpayer and the flow-through
entities unitary with that CIT taxpayer, as well as sales between
the flow-through entities unitary with the CIT taxpayer,
must be eliminated when calculating the numerator and the
denominator.
This combined sales factor can be calculated using the
following equations:
Numerator = [(CIT taxpayer’s ownership percentage of the
flow-through entity) x (flow-through entity’s Michigan sales –
Michigan sales eliminations)] + (CIT taxpayer’s Michigan sales
– Michigan sales eliminations)
Denominator = [(CIT taxpayer’s ownership percentage of the
flow-through entity) x (flow-through entity’s total sales – total
sales eliminations)] + (CIT taxpayer’s total sales – total sales
eliminations)
Ultimately, the apportionment percentage used by the flowthrough entity to apportion the distributive shares of business
income received by its C Corporation members will be the
same apportionment percentage that will be used by that C
Corporation when computing its CIT liability. This also means
that if the flow-through entity is owned by two C Corporations,
one of which is unitary with the flow-through entity, the
flow-through entity must use separate sales factors for each
C Corporation. This form allows the flow-through entity to
apportion the distributive shares of its business income using
two, separate factors.
Flow-through entities Withholding on an Individual
Who Will report Income Using Combined
Apportionment for Unitary Flow-through entities
If the flow-through entity withholds on an individual who
will elect to report income using combined apportionment
for unitary flow-through entities, the flow-through entity
filing this return will use a combined sales factor to apportion
the distributive share of taxable income attributable to the
individual member. The filer need only use this method when
the individual will elect to report income using combined
apportionment for unitary flow-through entities.
An individual owner of flow-through entities may elect to
apportion the business income of its flow-through entities
on a separate entity basis or a unitary combined basis. The
individual may elect combined apportionment when the
business operations of the flow-through entities show (1)
economic realities; (2) functional integration; (3) centralized
management; (4) economies of scale; and (5) substantial mutual

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interdependence. These factors are not exhaustive or exclusive,
and the ability to elect combined apportionment will depend on
the totality of the circumstances.
If the individual will elect to report income using combined
apportionment for unitary flow-through entities, the numerator
of the combined sales factor must should include the individual
taxpayer’s proportionate share of the Michigan sales of each
of the unitary flow-through entities in the group for which the
individual member has elected unitary apportionment.
The denominator of the combined sales factor must should
include the individual taxpayer’s proportionate share of total
sales everywhere of each of the flow-through entities in the
unitary group for which the individual member has elected
unitary apportionment.
The flow-through entity withholding on this individual will
use the combined apportionment factor to apportion the
distributive share of business income attributable to that
individual.
A combined sales factor can be calculated using the following
equations:
Numerator = [(Individual member’s ownership percentage
of the flow-through entity) x (flow-through entity’s Michigan
sales] + [(Individual member’s ownership percentage of another
flow-through entity unitary with the withholding flow-through
entity) x (the other flow-through entity’s Michigan sales)]
Denominator = [(Individual member’s ownership percentage
of the flow-through entity) x (flow-through entities’ total sales]
+ [(Individual member’s ownership percentage of another
flow-through entity unitary with the withholding flow-through
entity) x (the other flow-through entity’s total sales]
Ultimately, the apportionment percentage used by the flowthrough entity to apportion the distributive shares of taxable
income received by its individual members will be the same
apportionment percentage that will be used by that individual
when computing his or her IIT liability. This also means that
if the flow-through entity is owned by two individuals, one
of whom elects to combine apportionment with other entities
unitary with the withholding flow-through entity, the flowthrough entity must use separate sales factors for each of
those individuals. This form allows the flow-through entity to
apportion the distributive shares of taxable income using two,
separate sales factors.
For more information, see the document titled “MI-1040H
Unitary Apportionment Worksheet Example” on the Income
Tax forms page of Treasury’s web site. Search at www.
michigan.gov/taxes.
Sales
When calculating the sales factor for members that are C
Corporations or intermediate flow through entities, sale or sales
shall have the same meaning as those terms under the CIT.
When calculating the sales factor 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

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of property, and providing of services that constitute business
activity. Exclude all receipts from non-business income. For
more information on what is a “sale” for either purpose see
the instructions for the Annual Flow-Through Withholding
Reconciliation Return (Form 4918).

Line by Line Instructions
Name and FEIN: On the first line, enter the name and Federal
Employer Identification Number (FEIN) of the flow-through
entity that is completing this form.
On the second line enter the name and FEIN of the CIT
taxpayer that is unitary with the flow-through entity that is
filing this form.
If reporting information on a non-resident individual, on
the second line enter the name and Social Security Number of
that individual.
Part 1: Apportionment Percentages
Use this part to calculate either the combined sales factor to
be used to apportion the distributive share of income received
by a CIT taxpayer that is unitary with the flow-through entity,
OR, the combined sales factor to be used to apportion the
distributive share of income received by an individual who will
report income using combined apportionment for unitary flowthrough entities. If the flow-through entity filing this form must
calculate a combined sales factor for both CIT and individual
purposes, file more than one 4919. If the filer must calculate a
combined sales factor for more than one corporate member,
or more than one individual who will report income using
combined apportionment for unitary flow through entities, file
one 4919 per each such member. Do not blend the sales factors.
Note for Tiered Structures
For CIT withholding: If the flow-through entity filing this
form (intermediate) earns income as a distributive share from
another flow-through entity (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.
For Individual Withholding: If the flow-through entity filing
this form earns income as a distributive share from another
flow-through entity (source) that is not applying the same
combined apportionment factor used by the filer, that source
income will be apportioned according to the source entity’s
sales factor.
To achieve proper apportionment, a subtraction is permitted
for the non-unitary source income on line 8 of Form 4918. On
that form, income received as a distributive share from a source
flow-through entity is subtracted prior to apportionment of the
filer’s own tentative distributive income and added back to the
total after application of the filer’s apportionment factor. This
subtraction preserves the source entity’s sales apportionment
as applied to the distributive share income received by the filer
from the source entity.
Line 1a: For a flow-through entity that is unitary with a
CIT taxpayer: Enter on this line the combined Michigan
sales of the flow-through entity that is filing this form, the
CIT taxpayer that is unitary with the flow-through entity,

and all other flow-through entities that are also unitary with
the CIT taxpayer and the flow-through filing this form. The
Michigan sales used when calculating the unitary sales factor
for a CIT taxpayer that is unitary with the flow-through entity
includes all of the sales of the CIT taxpayer that are sourced
to Michigan and a proportionate amount of the flow-through
entity’s sales that have been sourced to Michigan. This can be
calculated using the equation for the numerator included in the
“Filing When Unitary for CIT or IIT” section earlier in these
instructions.
For a flow-through entity that withholds on an individual
who will report income using combined apportionment for
unitary flow-through entities: Enter on this line the combined
Michigan sales of the flow-through entities for which the
individual member has elected unitary apportionment.
Line 1b: For a flow-through entity that is unitary with a CIT
taxpayer: Enter on this line the combined total sales of the flowthrough entity that is filing this form, the CIT taxpayer that is
unitary with the flow-through entity, and all other flow-through
entities that are also unitary with the CIT taxpayer and the flowthrough filing this form. The total sales used when calculating
the unitary sales factor for a CIT taxpayer that is unitary with
the flow-through entity includes all of the sales of the CIT
taxpayer and a proportionate amount of the flow-through entity’s
total sales. This can be calculated using the equation for the
denominator included in the “Filing When Unitary for CIT or
IIT” section earlier in these instructions.
For a flow-through entity that withholds on individual
who will report income using combined apportionment for
unitary flow-through entities: Enter on this line the combined
total sales everywhere of the flow-through entities for which
the individual member has elected unitary apportionment.
Line 2a: For a flow-through entity withholding on a C
Corporation or other flow-through entity member: Enter
the Michigan sales that are attributable to the flow-through
entity. Do not include any sales that are attributable to the flowthrough entity’s members.
For a flow-through entity withholding on an individual: Enter
the Michigan sales, as defined for members that are individuals,
that are attributable to the flow-through entity. Include on this
line any “throwback sales” of the flow-through entity.
Line 2b: For a flow-through entity withholding on a C
Corporation or other flow-through entity member: Enter the
total sales that are attributable to the flow-through entity. Do
not include any sales that are attributable to the flow-through
entity’s members.
For a flow-through entity withholding on an individual:
Enter the total sales everywhere, as defined for members
that are individuals, that are attributable to the flow-through
entity.
Part 2: Distributive business Income
Use this part to calculate apportioned distributive income. If
the flow-through entity filing this form must calculate the sales
factor for both CIT and individual purposes, file more than
one 4919. Do not blend the sales factors. Do not combine the
calculations in this part.

To the extent a 4919 is calculated for CIT purposes, the results
will be carried to Form 4918, Column A, as directed below.
To the extent a 4919 is calculated for individual purposes, the
results will be carried to Form 4918, Column B, as directed
below. Do not combine the calculations in this part.
Line 3a: For a flow-through entity that is unitary with a
CIT taxpayer: Enter on this line the distributive share of the
flow-through entity’s business income that is attributable to
the CIT taxpayer that is unitary with the flow-through entity or
attributable to a flow-through entity that is unitary with a CIT
taxpayer and the flow-through entity filing this return. The
amount entered on this line combined with the amount entered
on line 3b must equal the amount entered on line 9A of Form
4918.
For a flow-through entity that withholds on an individual
who will report income using combined apportionment
for unitary flow-through entities: Enter on this line the
distributive share of the flow-through entity’s business income
that is attributable to the individual who will report income
using combined apportionment for unitary flow-through
entities. The amount entered on this line combined with the
amount entered on line 3b must equal the amount entered on
line 9B of Form 4918.
Line 3b: For a flow-through entity that is unitary with a
CIT taxpayer: Enter on this line the distributive share of the
flow-through entity’s business income, that is attributable to
members that are C Corporations or other flow-through entities
that are not unitary with the flow-through entity filing this
return. The amount entered on this line combined with the
amount entered on line 3a must equal the amount entered on
line 9A of Form 4918.
For a flow-through entity that withholds on an individual
who will report income using combined apportionment
for unitary flow-through entities: Enter on this line the
distributive share of the flow-through entity’s business income
that is not entered on line 3a. The amount entered on this line
combined with the amount entered on line 3a must equal the
amount entered on line 9B of Form 4918.
Line 4a: Multiply line 3a by line 1c and enter that amount on
this line.
Line 4b: Multiply line 3b by line 2c and enter that amount on
this line.
Line 5: For a flow-through entity that is unitary with a CIT
taxpayer: Add line 4a and line 4b. Enter this amount on this
line and carry this amount to line 14A of Form 4918.
For a flow-through entity that withholds on an individual
who will report income using combined apportionment
for unitary flow-through entities: Add line 4a and line 4b
and subtract the entire amount of personal exemption claimed
on individuals. Enter the result of this calculation on line
5 and carry this amount to line 14B of Form 4918. For more
information on personal exemption, see the instructions for
Form 4918, line 12B.
Include completed Form 4919 as part of the tax return filing.

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