Michigan Schedule of Apportionment (MI-1040H) is not limited to businesses with assets or employees. It is used to apportion business income when that income is taxable both within and outside Michigan. The form uses a sales factor apportionment method which is calculated by dividing total Michigan sales by total sales everywhere. “Sales” includes gross receipts from sales of tangible property, rental of property, proceeds from the sale of property used in the business, and providing services that constitute business activity.

Business income subject to apportionment includes ordinary, portfolio, and other business income from the business activity. Receipts from nonbusiness income are excluded.

To enter or review this information in the TaxAct program:

TaxAct Online

1. From within the TaxAct return, navigate to the State tab from the side menu.
2. Click Michigan under the State tab to access the Michigan Quick Q&A Topics screen.
3. Click Basic Information to expand the category and select Residency.
4. Select the appropriate answer (Part-year resident or Nonresident).
5. On the Michigan Quick Q&A Topics screen, click Adjustments to expand the category and select Form MI-1040H, Schedule of Apportionment
6. Click +Add Form M1-1040H and answer the questions as appropriate to determine the sales factor and apportionment of Michigan and non-Michigan portions of the income

Desktop

1. From within the TaxAct return, navigate to the Q&A tab via the menu bar at the top of the program.
2. Click Tools and select Topics Assistant from the dropdown list.
3. Navigate to the Summary portion of the California return and click Review Q&A Topics to access the Michigan Quick Q&A Topics screen.
4. Click Basic Information to expand the category and select Residency.
5. Select the appropriate answer (Part-year resident or Nonresident).
6. On the Michigan Quick Q&A Topics screen, click Adjustments to expand the category and select Form MI-1040H, Schedule of Apportionment
7. Click +Add Form M1-1040H and answer the questions as appropriate to determine the sales factor and apportionment of Michigan and non-Michigan portions of the income

Once you have completed this section of the Q&A, the correct amounts will be reflected on Line 7 of Michigan Schedule NR.