The Association for Main Street
Accountants and Tax Professionals.

Michigan FTE Info

Michigan Flow-through Entity
Tax Information and Links

For Questions on the New MFT Law:
Call Michigan Treasury at 517-636-6925

Follow the prompts for the Corporate Income Tax/Flow-Through Entity Tax.

Bookmark These Links:

Revised Michigan Flow Through Tax Guidance
Michigan Flow-Through Q&As

Michigan Department of Treasury Notice on
March 15 Deadline for FTE Estimated Payments

March 2, 2022 - Effective for tax years beginning on or after January 1, 2021, the Michigan flow-through entity tax, enacted under 2021 PA 135, levies an elective income tax on flow-through entities with business activity in Michigan. The timely payment of the flow-through entity tax creates a refundable income tax credit and other adjustments that are passed through and ultimately reported on the Michigan income tax returns of certain members.

For calendar year flow-through entities that have elected to pay the Michigan flow-through entity tax for tax year 2021, only payments received by March 15, 2022, are eligible to be claimed as a credit on members' 2021 tax year returns. Tax year 2021 flow-through entity tax payments made after March 15, 2022, will delay the members' credits until tax year 2022 or later.

This credit cutoff date does not impact the March 31, 2022, date set for filing the annual tax return for calendar year flow-through entities. Additional information regarding flow-through entity tax payments and the computation of the member credit is available in Treasury's prior notice. 

Click here for additional instructions and guidance on the Michigan flow-through entity tax.

For more information on the FTW and other Michigan taxes, visit

Michigan Treasury Clarifies the March 2
Notice on Making Estimated Payments
and Elections for the New FTE Law

"The March 2 Notice is guidance on one, discrete issue—the timing of a payment that controls the timing of member credits for a calendar year electing flow-through entity (FTE)," said Julie Thelen, Assistant Administrator of the Department of Treasury's Bureau of Tax Policy. "That is, the notice addresses whether members of a calendar year flow-through entity can claim a credit on their 2021 returns (payments for FTE tax year 2021 made no later than March 15, 2022) or on their 2022 return (payments for FTE tax year 2021 made after March 15, 2022)."

"Therefore, if the intention of the flow-through entity is to give members a credit on their 2021 return, those payments would have to be for a 2021 tax levied on the flow-through entity and paid by March 15, 2022," Thelen continued. "This notice does not change the due dates of estimated payments or payments related to the election into the tax, both of which are detailed in Treasury’s January 16, 2022 notice."
Thelen clarified that "a taxpayer must designate the tax year for every payment, whether making an election payment, an estimated payment, or a payment for the annual return. The year the taxpayer designates is the tax year to which the payment will be applied, and the earliest tax year’s payments that a taxpayer makes will dictate the starting year of their three-year election."

MI Flow-through Entity Tax Payments Delayed
Due to MTO Registration Will Be Treated as Timely
for Taxpayers Registered as of March 15, 2022

March 15, 2022 - Michigan Treasury Online (MTO) is currently experiencing an unexpected technical issue that is causing a delay of payments from taxpayers registering for the Michigan flow-through entity tax. After completing registration, affected taxpayers are receiving the following instruction within MTO:

Registration successful.  Your Flow-Through Entity (FTE) registration is being reviewed. Your FTE account should be available for use in 2-3 business days. If you continue to experience issues with our business registration, please contact us.

The Michigan Department of Treasury is working quickly to restore immediate payment functionality within MTO.  However, because this technical issue may prevent some taxpayers from submitting a flow-through entity tax payment on or before March 15, 2022, special relief is necessary. 

Accordingly, for taxpayers who have registered within MTO as of March 15, 2022, but receive the message above, the Michigan Department of Treasury will regard any payment made through March 18, 2022, as having been paid as of the date of registration. Taxpayers who complete registration within MTO after March 15, 2022, will not be eligible for this relief. 

For future updates on the resolution of this issue, please visit the flow-through entity tax page located at

Updated Guidance on New
Michigan Flow-through Tax

NOTE: The Michigan Department of Treasury has published the link below providing guidance on the new Flow-Through Entity Tax legislation passed in late December:

The PDF provides overviews, select Q&As and how-tos.

January 27, 2022 - The Michigan Department of Treasury has issued updated and revised guidance on the new flow-through tax for qualifying entities. Here is the link:

Revised Michigan Flow-through Tax Guidance

Please see footnote 1 on the Notice for the changes: 
  • Sections I.B., I.D.a., I.E., and II.A.a. as they relate to limitations on the member credit have been corrected to refer to the fifteenth day of the third month after the tax year as the date by which flow-through entity tax payments will be eligible for the credit for a particular tax year. The previous version erroneously named the due date of the annual return as the cutoff.
  • Additionally, the election instructions in Section I.B. have been modified to clarify the irrevocable three-year election for 2021 and the amount of payment required to make a valid election into the tax.

For questions on the new law, call 517-636-6925.
Follow the prompts for the Corporate Income Tax/Flow-Through Entity Tax.

Here, again, is the link to on estimated payments and the waiving of penalties and interest for Michigan flow-through entities making the switch to the new tax:

Governor Signs Michigan Pass-Through Entity Tax
New Law Allows Deduction of State and Local Taxes
Quick Action on Behalf of Clients May Be Needed for 2021

by Gregory Nowak and Ryan Riehl, Miller Canfield Law Firm

December 23, 2021 - Michigan Gov. Gretchen Whitmer has signed legislation allowing Michigan pass-through entities to elect to pay a newly enacted 4.25% income tax and for the owners of those entities to claim a tax credit against that tax on their Michigan individual income tax returns.

The new tax mirrors the so-called State and Local Tax (SALT) cap workaround taxes enacted by several other states that are designed to avoid the $10,000 federal limit on individual itemized deductions for state and local taxes. Importantly, the new tax election is available retroactively for years beginning in 2021, and therefore pass-through entities and their owners may want to consider making this election for tax year 2021.

H.B. 5376 allows owners of LLCs, S corps and other pass-through entities to pay their state and local taxes at the business-entity level instead of individually. The new tax election is not available to disregarded entities, but only those entities treated as partnerships for federal tax purposes such as S Corporations and multiple-member LLCs, as well as estates and trusts.

Related: Summary of H.B. 5376
Related: Legislative Analysis of H.B. 5376

The bill is estimated to save the roughly 240,000 pass-through entity owners subject to tax in Michigan about $200 million in federal taxes annually. The law should level the playing field with competing out-of-state businesses because Michigan will join states that have already enacted SALT cap workarounds to benefit local business owners. According to a legislative bill analysis, the new Michigan law will have no impact on state revenue, with the exception of the incremental cost to administer the new tax.

Action to Consider for Tax Year 2021

Because the new tax and related tax credit are effective retroactively for years beginning in 2021, pass-through entities and their owners may wish to consider making the election to pay the new tax for the 2021 tax year. Annual returns are generally due by March 31 unless extended, but the election can be made for 2021 until April 15, 2022.

The new law generally requires estimated payments and imposes penalties and interest for the underpayment of those estimated taxes by the pass-through entity, but Treasury has indicated that no penalties will be imposed on pass-through entities that make the election for 2021 and pay the new 4.25% tax when filing their annual return by April 15, 2022. Interest may be assessed for taxes paid after March 31, 2022, but Treasury may also waive interest in the initial year for taxes paid by March 31, 2022.

MTAP P.O. Box 398 Bath, MI 48808-0398