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Michigan Department of Treasury (Rev. 06-21)                                                                                    Issued under authority of Public Act 281 of 1967, as amended. 

MICHIGAN Net Operating Loss Schedule MI-1045 
Type or print in blue or black ink.                                                                                                                       Attachment 29
                   Year (YYYY)                                    Month-Year (MM-YYYY)                                                              Month-Year (MM-YYYY) 
For loss year                          or for loss year beginning                                                                   and ending 
Filer’s First Name                           M.I. Last Name                                                                     Filer’s Full Social Security No. (Example: 123-45-6789) 

If a Joint Return, Spouse’s First Name       M.I. Last Name                                                                     Spouse’s Full Social Security No. (Example: 123-45-6789) 

1.      Check the box to forgo the entire carryback period for the farming NOL. When you check the box, you are electing to carry 
        the farming NOL forward instead of carrying it back to previous years. Once the election is made, it is irrevocable. 
PART 1:  COMPUTE THE NET OPERATING LOSS (NOL) 
2.   Adjusted Gross Income (AGI). Enter the amount from MI-1040, line 10 of the loss year  ..................                                       2.                                  00 
Additions. Enter the corresponding amounts from Schedule 1. 
3.  Gains from Michigan column of MI-1040D and MI-4797 from Schedule 1, 
     line 3  ..............................................................................................................  3.     00 
4.  Losses attributable to other states from Schedule 1, line 4..........................  4.                                       00 
5.  Net loss from federal column of your Michigan MI-1040D or MI-4797 from 
     Schedule 1, line 5  ..........................................................................................  5.             00 
6.  Oil, gas, and nonferrous metallic mineral expenses (Michigan sourced) 
     deducted to arrive at AGI from Schedule 1, line 6  .........................................  6.                               00 
7.  Federal net operating loss deduction included in AGI from Schedule 1, line 7.  7.                                               00 
8.   Total. Add lines 3 through 7 ................................................................................................................. 8.                                  00 
Subtractions. Enter the corresponding amounts from Schedule 1. 
9.  Gains from federal column of Michigan MI-1040D and MI-4797 from 
     Schedule 1, line 12 .....................................................................................  9.                  00 
10.  Income attributable to another state from Schedule 1, line 13  .....................  10.                                      00 
11.  Oil, gas, and nonferrous metallic minerals income (Michigan sourced)  
     included in AGI from Schedule 1, line 19     ........................................................ 11.                      00 
12.  Miscellaneous subtractions from Schedule 1, line 21 (see instructions) ......  12.                                             00 
13.  Total. Add lines 9 through 12. Enter as a negative number  ..................................................................  13.                                                 00 
14.  Michigan NOL before required modifications. Combine lines 2, 8, and 13. If zero or greater, STOP; you  
     do not have a Michigan NOL.....................................................................................................................  14.                               00 
Modifications. Complete Part 2 before continuing. 
15.  Excess nonbusiness deductions from line 30.......................................................                          15. 00 
16.  Excess capital loss (see instructions). Enter as a positive number  .............  16.                                         00 
17.  Michigan sourced adjustments (see instructions)........................................  17.                                   00 
18.  Total Modifications. Add lines 15 through 17  .....................................................................................  18.                                           00 

19.  Michigan NOL. Combine lines 14 and 18. If zero or greater, you do not have a Michigan NOL  ..................  19.                                                                 00 

PART 2: EXCESS NONBUSINESS DEDUCTIONS 
Michigan-sourced Nonbusiness Deductions 
20.  Payments to a retirement plan as an individual or self-employed person ..... 20.                                               00 
21.  Alimony deducted and/or penalty for early withdrawal of savings  ................. 21.                                         00 
22.  Other adjustments to income......................................................................... 22.                       00 
23.  Subtotal. Add lines 20 through 22.................................................................. 23.                        00 
Michigan-sourced Nonbusiness Income 
24.  Interest income  .............................................................................................. 24.            00 
25.  Dividend income  ............................................................................................ 25.              00 
26.  Net nonbusiness capital gains (before any allowable exclusion)  .................. 26.                                         00 
27.  Pension, IRA and annuities  ........................................................................... 27.                    00 
28.  Taxable alimony and other income  ................................................................ 28.                         00 
29.  Subtotal. Add lines 24 through 28.................................................................. 29.                        00 
30.  Excess nonbusiness deductions. Subtract line 29 from line 23. If line 29 
     is greater than line 23, enter “0”. Enter here and carry to line 15  .................. 30.                                    00 



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2021 Schedule MI-1045, Page 2 
    Instructions for  Michigan Net Operating Loss Schedule (Schedule MI-1045) 

Purpose                                                             Federal CARES Act of 2020 
Michigan  Net Operating Loss  Schedule        (Schedule             For tax years 2018, 2019, and 2020 the federal CARES Act 
MI-1045) is used to compute the Michigan net operating              replaced many of the provisions of the federal TCJA. The 
loss  (NOL)  and  is  now  filed  with  the  loss  year  return     2020 Schedule MI-1045 accommodates the changes set by 
(including e-filed returns).                                        the CARES Act and should be used if you are claiming a 
Michigan Net Operating Loss Deduction (Form 5674) is                loss created in 2018, 2019 or 2020. 
used to compute the current year Michigan NOL deduction.            What is a Net Operating Loss? 
Form 5674 is required to claim an NOL deduction on 
                                                                    An  NOL  occurs  when  business  loss  exceeds  income 
Schedule 1. 
                                                                    in  a  particular  year.  In  general  terms,  a  federal  NOL  is 
Michigan Net Operating Loss Carryforward deduction 
                                                                    computed  by  starting  with  federal  taxable  income  and 
is claimed on Michigan Schedule 1. A completed Schedule                                                                
                                                                    making the following modifications by eliminating:
MI-1045  for  the  loss  year(s)  and  Form  5674  are  required 
                                                                      • Capital losses  in excess  of capital gains  and 
before an NOL carryforward deduction can be claimed.
                                                                        any  excluded  capital  gains.  The  excess  capital 
Michigan Farming Loss Carryback Refund Request 
                                                                        loss  deduction  is  calculated  on  a  U.S.  Form  1045    
(Form 5603), is used to claim a refund from a farming loss 
carryback.                                                              Schedule A,  line  21  or  22.  An  excess  capital  loss 
                                                                        includes a U.S. Form Schedule D loss that is limited to 
Federal Tax Cuts and Jobs Act of 2017                                   $3,000. The capital loss may be greater than $3,000 if 
The federal Tax Cuts and Jobs Act (TCJA) of 2017 limits                 nonbusiness capital losses were offset by business gains 
business losses that are included in adjusted gross income              that are also reported on U.S. Form Schedule D. 
(AGI)  for  2021  and  future  tax  years.  The  limitation  is 
                                                                        Example: U.S.  Form  1045,Schedule  A  ,  line  22 
computed  by  aggregating  business  income  and  business 
                                                                        computed  a  $15,000  excess  capital  loss.  The  $15,000 
losses.  If  the  computation  results  in  a  loss,  the  Internal 
                                                                        excess capital loss cannot be used to increase the NOL. 
Revenue Code (IRC) 461(l) limits business losses in 
excess  of  business  income.  The  limitation  is  adjusted  for     • NOL carryovers from other years 
inflation each year. Losses in excess of the limitation are           • Excess  of  nonbusiness  deductions  over  nonbusiness 
not included in AGI and become an NOL available to claim                income 
in  the  following  year  computed  on  the Michigan Excess             Example:  $10,000 nonbusiness stock loss and $50,000 
Business Loss Form MI-461.                                              gain from the sale of a business asset (U.S. Form 4797) 
New Terminology                                                         produce a U.S. Form Schedule D  gain of $40,000. The 
Due  to  the  federal  TCJA,  limitations  were  imposed  on            $10,000 stock loss is nonbusiness and cannot be used to 
NOL deductions for losses incurred in 2018 and future tax               increase an NOL. 
years.  This  created  two  groups  of  NOLs.  For  Michigan        If the end result is negative, a federal NOL has been 
forms  and  instructions  these  are  identified  as  Group  1  created  for  use  in  another  tax  year.  For  additional 
NOLs  and  Group  2  NOLs.  Group  2  NOLs  are  further            information on federal NOLs, see Internal Revenue Service 
divided  into  two  subcategories  as  Group  2  CARES  and  (IRS) Publication 536. 
Group 2 TCJA.                                                       The Michigan NOL 
Group 1 NOLs are those created in 2017 and prior.               The  Michigan  NOL  is  computed  independently  of  the 
Group 2 NOLs:                                                   federal NOL.  The calculation of a Michigan NOL follows 
    •    Group 2 CARES NOLs are those created in 2018,              the same general format as the federal NOL calculation 
      2019  and  2020.  The  carryforward  of  these  NOL  but  begins  with  federal  AGI  rather  than  federal  taxable 
      deductions  are  limited  to  80  percent  of  Michigan  income. Therefore, federal itemized or standard deductions 
      taxable  income  before  exemptions  and  previously  that  may  be  used  to  create  or  contribute  to  the  federal 
      claimed  NOL  deductions  beginning  in  tax  year            NOL are not considered when calculating the Michigan 
      2021.                                                         NOL. The Michigan NOL is subject to the allocation and 
    •    Group 2 TCJA NOLs   are  those  created  in  2021          apportionment provisions of Chapter 3 of the Income Tax 
      and  future  tax  years.  These  NOL  deductions  are         Act  which  excludes  income  and  loss  attributable  to  other 
      limited to 80 percent of Michigan taxable income              states. Additionally, income from the production of oil and 
                                                                    gas and nonferrous metallic mineral extraction subject to 
      before  exemptions  and  previously  claimed  NOL 
                                                                    Michigan severance tax and expenses of production are 
      deductions. 
                                                                    excluded. 
The  TCJA  eliminates  most  NOL  carrybacks  for  NOLs             To determine whether an NOL was incurred from 
incurred in tax years after 2020 and allows the NOL to be           Michigan sources, regardless of whether or not there 
carried  forward  indefinitely  until  fully  absorbed.  A  two-    was a corresponding federal NOL, complete the  
year carryback is available for farming NOLs.                       Schedule MI-1045 for the year of the loss. 



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2021 Schedule MI-1045, Page 3 
The  Michigan  NOL  may  be  carried  over  in  the  same           Amending the NOL 
manner and to the same time periods as provided for                 If   you  file  an  amended  MI-1040  for  a  loss  year  which 
in  IRC  172  in  effect  for  the  year  the  loss  was  incurred. changes  your  NOL,  you  must  include  the  applicable 
An  NOL  must  be  claimed  in  consecutive  years.  If             amended  MI-1045  for  the  loss  year.  Provide  all  required 
there  is  a  change  in  filing  status,  Michigan  follows        supporting  documentation  to  substantiate  the  change. 
federal  regulations.  Additionally,  the  amount  of  the          If  you  need  to  amend  an  NOL  carryforward,  see  the 
combined  Michigan  NOL  carryover  must  be  reduced               applicable  year’s  MI-1040  booklet  on  filing  an  amended 
by  any  Michigan  sourced  excess  capital  loss  and  other       MI-1040.  Include  all  required  documentation  to 
modifications  required  under  IRC  172  or  elections  under      substantiate  the  change.  An  NOL  must  be  claimed  in 
IRC 965 claimed in the previous carryover year.                     consecutive years. Do not amend Form MI-1040 to request 
For additional information regarding NOLs, see IRS                  a refund for the carryback year, see Form 5603 to claim a 
Publication 536 and Michigan      Revenue Administrative            farming loss carryback. 
Bulletin 2020-23.                                                   Statute of Limitations for NOL Refund Claims 
Nonresidents and Part-Year Residents 
                                                                    A  claim  for  a  refund  based  on  an  NOL  must  be  filed 
Nonresidents and part-year residents may also be entitled           within the four-year statute of limitations period (open tax 
to  a  Michigan  NOL  deduction.  Only  Michigan-sourced            year). If an NOL is sustained in a year that is outside the   
income  or  loss  may  create  a  Michigan  NOL.  Complete          four-year statute of limitations period (closed tax year), a 
Schedule MI-1045 to determine if a Michigan NOL was                 taxpayer  may  still  claim  the  NOL  deduction  in  open  tax 
incurred.   In  a  carryforward  year,  enter  the  total  amount   years. However, the election to forgo the carryback of an 
of  the  federal  NOL  deduction  included  in  AGI  on             NOL is not allowed if the NOL was established outside the 
Michigan Nonresident and Part-Year Resident Schedule                statute of limitations period. The taxpayer must calculate 
(Schedule  NR),  line  11,  column  C.  The  Michigan  NOL          the amount of the Michigan NOL that would have been 
deduction is computed on Form 5674 and claimed as a                 absorbed by Michigan taxable income before exemptions 
subtraction on the Michigan Schedule 1.                             in the closed tax year(s) to determine the amount that can 
NOTE: Do not report a Michigan NOL deduction                        be carried forward to the first open tax year(s). Treasury 
on Michigan Schedule NR or claim the federal NOL                    may  redetermine  the  correct  taxable  income  before 
deduction as an addition on Michigan Schedule 1.                    exemptions  in  a  closed  tax  year  to  ascertain  either  the 
                                                                    amount of an NOL or the amount of an NOL deduction 
                                                                    absorbed in the closed tax year(s) to determine the correct 
                                                                    NOL carryforward to the first open tax year. 

                              Line-by-Line Instructions for Schedule MI-1045 

Lines not listed are explained on the form.                         Line 19:   This is the Group 2 NOL available to claim as 
                                                                    a  carryforward  to  the  next  tax  year  on  Form  5674  or 
Part 1: Compute the Net Operating Loss                              carryback on Form 5603, if eligible. 
To  complete  Part  1,  use  entries  from  your    Michigan 
                                                                    Part 2: Excess Nonbusiness Deductions 
Individual Income Tax Return     (MI-1040) and Michigan 
Schedule 1 for the year the loss occurred.                          To  complete  Part  2,  use  the  Michigan  portion  of  entries 
                                                                    from your U.S. Form    1040  for the year the loss occurred. 
Line 12: Miscellaneous subtractions are limited to:
                                                                    Michigan follows  the general NOL provisions  of IRC 
  • Losses from the disposal of property reported in the 
                                                                    172  for  determining  nonbusiness  deductions.  See          
    Michigan  column  of  MI-1040D,  line  13,  or  MI-4797,                                               
                                                                    IRC Reg 1.172-3 for more information.
    line 18b 
                                                                    Lines 20 through 22:        Enter  the  Michigan-sourced 
  • Adjustments  for  out  of  state  business  activity  not                                                                    
                                                                    nonbusiness deductions from U.S. Form 1040 Schedule 1.
    reported on another line of Schedule 1 or this form. 
                                                                    Lines 24 through 28:   Enter  the  Michigan-sourced 
Line 15:  Complete Part 2 and enter amount from line 29                                                      
                                                                    nonbusiness income included in line 14.
on this line. 
Line 16:    The excess capital loss deduction must be 
calculated on a U.S. Form     1045 Schedule A, line 21 or 22, 
then  entered  on this line.  
Line 17:      Enter  the  following  Michigan  sourced 
adjustments  from  U.S.  Form    1040 Schedule 1, used to 
arrive at federal AGI: 
  • Deduction for self-employment tax 
  • Deduction for self-employed health insurance 
  • Educator expenses and/or moving expenses 



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 Required Supporting Documentation 

To help reduce processing delays, review the following to ensure all supporting documents 
are included when establishing an NOL. 

r    U.S. Form 1040 

r    U.S. Form 1040 Schedule(s) 1, A, B, C, D, E, F 

r    U.S. Form 4797 

r     U.S. Form 4835 

r  U.S. Form 1045 Schedule A 

r  Schedule K-1(s)  

r    MI-1041 and final Schedule K-1 from the U.S. Form 1041 when an NOL is created from 
 the termination of a trust 

r    For all business activity, provide a statement indicating the type and location (city and 
 state) of each source of income or loss. For assistance, refer to the “Business, Rental & 
 Royalty Activity Worksheet” available on Treasury’s website. 

r  Any other applicable documentation to support the NOL. 






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