C18. Does Schedule C (sole proprietor) income of over $180,000.00 preclude the taxpayer from using the Small Business Alternative Credit?

Yes. Section 417 of the Michigan Business Tax Act (MBTA) provides the alternate credit. MCL 208.1417. Section 417 instructs that the Small Business Alternate Credit is available to any taxpayer with gross receipts that do not exceed $20 million and with adjusted business income minus the loss adjustment that does not exceed $1.3 million (adjusted annually for inflation).

Regarding disqualifiers, section 417 expressly directs that, "An individual ... is disqualified [credit] if the individual ... receives more than $180,000.00 as a distributive share of the adjusted business income minus the loss adjustment of the individual ..."

Note: the distributive share disqualifier has been raised from $115,000.00 in the SBT's comparable Small Business Credit to $180,000.00 in the MBT's Small Business Alternative Credit.