How to make the Michigan PTET election.

Michigan’s Michigan Flow-Through Entity Tax lets your business pay state income tax for its owners and deduct it federally, outside the SALT cap. Here’s when and how to elect for 2026, and how to pay.

Can your business elect?

S corporations, partnerships (including LPs, LLPs, and general partnerships), and LLCs filing federal returns as partnerships can elect. Publicly traded partnerships, entities subject to the financial institutions tax, disregarded entities such as single-member LLCs, and LLCs taxed as corporations cannot.

The tax covers the Michigan portion of the business income tax base attributable to direct members that are individuals, estates, trusts, or other flow-through entities. It excludes the share of members that are C corporations, insurance companies, or financial institutions. Owners cannot opt out, and no owner consent rule was found. In tiered structures, income from a lower-tier entity that elected is deducted from the upper tier's base.

Rate: 4.25% for tax year 2026, the same as the individual income tax rate under MCL 206.51.

The Michigan portion of the positive business income tax base, apportioned with a single sales factor. This applies to resident and nonresident members alike. It is federal taxable income plus separately stated items, with adjustments such as adding back income taxes (including the FTE tax) and guaranteed payments to individual members.

Available for 2026. The flow-through entity tax, enacted by 2021 PA 135 and amended by 2024 PA 216, applies to tax years beginning on and after January 1, 2021. It continues as long as the federal SALT deduction limit exists. New to PTET? See how the election works.

Deadlines

Step	Due for 2026
1st estimated payment	April 15, 2026
2nd estimated payment	June 15, 2026
3rd estimated payment	September 15, 2026
4th estimated payment	January 15, 2027
Form 5772 and balance due	March 31, 2027
Extended return, election deadline	September 30, 2027

These dates are for a calendar-year business. Pay at least two business days early, since state payment sites slow down on deadline days.

Electing, step by step

Deadline: By the last day of the 9th month after the end of the first tax year of the election: September 30, 2027 for an election beginning with tax year 2026. An entity already inside a three-year election that began in 2024 or 2025 is covered for 2026 without a new election.

Log in to Michigan Treasury Online (MTO), or select Create My User Profile to set up a personal MTO user profile.
Register the business for the flow-through entity tax if it is not already registered. Treasury's MTO tutorial says this can be done through Start a New Business Registration or when prompted during Fast Pay.
Submit an electronic FTE tax payment through MTO and designate it for tax year 2026. Any amount counts, even a nominal one. Payments made outside MTO, or toward composite or individual estimates, are not elections.
Make the payment by September 30, 2027 (the last day of the 9th month after the 2026 tax year). The election then covers 2026, 2027, and 2028.

Paying the tax, step by step

Required if the annual liability is reasonably expected to exceed $800. For a calendar-year 2026 entity, payments are due April 15, June 15, and September 15, 2026, and January 15, 2027. Penalty and interest are generally not charged on quarterly payments due before the entity makes a valid election. Payments due after the election must be caught up by the next due date.

What you need

An account with Michigan Treasury Online (MTO) for the business. Set it up before the first deadline.
A personal MTO user profile (username and password).
The business account number used for Michigan Treasury business taxes.
The bank routing and account numbers, or a debit or credit card.

Start at Michigan Treasury Online (MTO), Michigan's official site.

Log in to MTO with a personal MTO user profile.
Select Fast Pay under Guest Services, or, if your profile is connected to the business, select the business on the FTE Dashboard and use File/Pay/Amend a Tax Return under FTE Actions.
For Fast Pay, enter the business account number, choose Flow-Through Entity Tax from the Tax Type menu, and select the Payment Type, Payment Year (2026), and Payment Period.
Enter the tax, penalty, and interest amounts, click Pay, and continue to the payment system hosted by JPM Chase. eCheck is free; debit and credit cards carry a fee.
Save the confirmation number. All FTE payments must go through MTO; there is no mailed voucher.

Filing the return: Form 5772, Michigan Flow-Through Entity Tax Annual Return, filed electronically through MTO. Due March 31, 2027 for a calendar-year entity. An extension extends filing only, not payment.

Keep the FTE tax separate from your personal estimates. The business pays the FTE tax from its own account under its own ID. Once it does, each owner's personal Michigan estimates can usually drop by the credit they expect, so the same tax is not paid twice.

Claiming the credit

Members claim a refundable credit for their share of FTE tax paid on Michigan Schedule FTE (Form 6072) and, for indirect members, Form 6074, carried to the MI-1040 or MI-1041. Members also add back FTE tax deducted at the entity level on Schedule 1. The entity gives members the needed figures in any reasonable format, such as federal K-1 notes.

Good to know

Because the election lasts three years, a 2026 election also commits the entity for 2027 and 2028.
Tax must be paid by the return due date, including extension, for members to claim the full credit for 2026. Tax paid later creates a credit for the year it is paid.
The tax base has no loss carryforward or carryback. A negative year produces no tax but cannot offset other years.
A member included on a composite return (Form 807) that claims the FTE credit cannot claim the same credit again on an MI-1040.
Paying your personal Michigan estimates? See how to pay Michigan estimated taxes.
Business in more than one state? Each state has a guide of its own.

Official sources

Checked October 2026 against the Michigan Department of Treasury's own publications and Part 4 of the Income Tax Act, MCL 206.801 et seq..

This guide is for general education and reflects rules as of October 2026. Tax law and agency websites change, and your situation may have details that change the answer. Please talk with your tax professional before acting on it.