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Treasury Form 4913 for Quarterly Corporate Income Tax Payments

The Corporate Income Tax (“CIT”) took effect on January 1, 2012 and replaced the Michigan Business Tax (“MBT”) for most taxpayers, except those electing to continue the MBT to claim certain credits.  The CIT consists of a franchise tax for financial institutions, a premium tax for insurance companies, and a flat 6% income tax for C Corporations and entities taxed as C Corporations for federal income tax purposes. As discussed in prior blog postings, the CIT does not apply to pass-through entities, such as LLCs or partnerships.

Please be aware that taxpayers must make quarterly estimated tax payments if the taxpayer reasonably expects the CIT liability to exceed $800.  The sum of the quarterly estimated payments must equal at least 85% of the final tax liability or penalties may apply. The amount of each payment must approximate the tax liability for the applicable quarter.  If a tax year is less than 12 months (e.g., a business was opened or closed during the year), the taxpayer should annualize the tax to determine if estimated payments are required.  However, no quarterly estimated taxes are required if the taxpayer has a short year of less than 4 months.

To facilitate the filing of quarterly estimated CIT payments, the Michigan Department of Treasury has issued Form 4913.  For a calendar year taxpayer, quarterly returns are due the 15th day of April, July, October and January.  For a fiscal year taxpayer, quarterly returns are due the 15th day of the first month following the end of the quarter. Penalties apply if the quarterly payments are not timely paid.

If you have questions on the CIT or quarterly filings, contact a Foster Swift tax attorney.

Categories: Corporate Income Tax, Income Tax

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focuses his practice in the areas of Michigan non-property tax disputes, business entity selection, corporate transactions, and information technology.

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