Key Takeaways from New MI Flow-Through Entity Tax Guidance



Michigan is among the latest states to pass its own state and local tax (SALT) reform, and a new notice from the Michigan Department of Treasury now includes more implementation guidance for the Michigan flow-through entity tax. Some key takeaways for tax and accounting professionals include:

  • The MI flow-through entity tax is retroactive to Jan. 1, 2021, for certain electing flow-through entities and those entities may be required to pay quarterly estimated tax payments.
  • Fourth quarter estimated tax payment for calendar year flow-through entities electing into the tax are due Jan. 18, 2022.
  • Fiscal year flow-through entities elected into the tax will pay quarterly estimated tax on due dates determined in accordance with that entity’s fiscal year.
  • Finally, due to the nature of this retroactive application to 2021 tax situations, quarterly estimated payments of tax otherwise due for tax year beginning in 2021 will not accrue any penalty or interest.

NOTE: The annual return due date for flow-through entities remains the last day of the third month after the tax year (Mar. 31,2022 for calendar-year filers), and penalty and interest may apply if the annual tax liability is not paid by that date.

MICPA members are invited to join the conversation on the MI flow-through entity tax happening now on MICPA Connect to exchange strategies, pose questions and share insights.

If you have specific questions for the Department of Treasury on this issue, please submit them to and the MICPA advocacy team will work with Treasury to get our member’s questions answered.

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