Unused SBT Credit Carryforeward to the MBT
In order to claim an Investment Tax Credit (ITC) to carryover from the Single Business Tax (SBT) into the Michigan Business Tax (MBT), the taxpayer must file a SBT return for the year of acquisition and for each of the intervening years if any. Then, and only then, can the unused credit be carried forward into the MBT and used as an offset against tax. The four year statute of limitations is not applicable in this situation because no return was filed and no claim of refund is made for the SBT years.
The above is a common situation with the SBT because of the separate return nature of the tax. If there is no tax due and gross receipts were $350,000 or less, then no return was needed and the credits were lost. However, the unused ITC can be carried forward for ten years. However, tax returns are needed to document the credits.
Ed - Could you please clarify the carryforward timeframe? Am I correct in my understanding that the SBT ITC credit can be carried forward 10 years but must be used on either the 2008 or 2009 MBT returns? After that, the credit is lost.
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Under the Single Business Tax (SBT), an unused Investment Tax Credit (ITC) can be carried forward ten years. Therefore, a taxpayer who did not file SBT tax returns can go back ten years to establish and document unused SBT ITC carryforewards to the MBT. The ITC carryforward to the MBT must be used in 2008 or 2009 or it will be extinguished.
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