If you are reporting combined apportionment on your Michigan return, Michigan requires you to provide a separate schedule showing your calculations and supporting information.
In our software, this requirement is referenced in the Basic Information section through the attachment option:
Attach PDF(s) Copy of your Unitary Calculation(s)
This attachment is used to provide the supporting documentation required by Michigan when income must be apportioned using a combined or unitary method.
Program Entry
- State
- Edit the Michigan return using the three dots
- Basic Information
- Attach PDF(s) Copy of your Unitary Calculation(s)
What Is Form MI-1040H?
Form MI-1040H, Apportionment Schedule for Individual Income Tax, is used to calculate the portion of income taxable to Michigan when income is earned both within and outside of Michigan.
The form is commonly used by taxpayers who:
- Operate a business in more than one state.
- Receive income from a business activity that is conducted both inside and outside Michigan.
- Must allocate or apportion business income to determine the portion subject to Michigan tax.
The form calculates a Michigan apportionment percentage based on business activity attributable to Michigan.
If you are reporting a combined apportionment, Form MI-1040H is located in the Subtractions from Income → Income Attributable to Another State → Schedule of Apportionment MI-1040H
What Is Combined Apportionment?
Combined apportionment is a method used to determine what portion of income is taxable by Michigan when income is generated in multiple states or through multiple related business activities.
When combined apportionment is used, Michigan requires documentation showing how the taxable Michigan income was calculated.
This is why the software provides an option to attach a PDF containing the taxpayer's calculations and supporting schedules.
Information Reported on Form MI-1040H
Form MI-1040H is used to report information such as:
- Business income subject to apportionment.
- Michigan sales.
- Total sales everywhere.
- Michigan apportionment percentage.
- Income allocated to Michigan.
The resulting calculation determines the percentage of income taxable by Michigan.
Attach PDF(s) Copy of Your Unitary Calculation(s)
If you are reporting combined apportionment, attach a PDF that includes:
- Your apportionment calculations.
- Supporting schedules.
- Any worksheets used to determine Michigan income.
- Any unitary or combined business computations required to support the return.
Michigan may request this information to verify how income was allocated or apportioned to Michigan.
How Does This Affect My Return?
Completing Form MI-1040H or attaching unitary calculation schedules may affect:
- Michigan taxable income.
- Michigan business income calculations.
- The amount of Michigan tax due.
- Allocation of income between Michigan and other states.
Notes
- Most individual taxpayers will not need Form MI-1040H.
- The form is generally associated with business income earned both within and outside Michigan.
- If Michigan requires combined apportionment, supporting schedules should be attached to the return.
- Retain copies of all calculations and supporting documentation used to determine the Michigan apportionment percentage.