MaxGhenis · Oct 6, 2026 · Oct 4, 2026 · Oct 4, 2026 · Oct 4, 2026 · Oct 4, 2026
diff --git a/changelog.d/mi-household-resources-business-losses.fixed.md b/changelog.d/mi-household-resources-business-losses.fixed.md
@@ -0,0 +1 @@
+Michigan household resources net business and rental income within MI-1040CR lines 16 and 17 before flooring each total at zero, count only the claimant's and spouse's business and rental items on those two lines (MCL 206.508(3)), count estate and trust income and Form 4797 ordinary gains on line 16, and no longer subtract business, rental or capital losses again as Schedule 1 adjustments on line 30.
diff --git a/policyengine_us/parameters/gov/states/mi/tax/income/household_resources.yaml b/policyengine_us/parameters/gov/states/mi/tax/income/household_resources.yaml
@@ -5,9 +5,17 @@ values:
     - strike_benefits
     - dividend_income
     - interest_income
+    # MI-1040CR line 16, net business income: U.S. Schedule C, Form 4797
+    # Part II, Schedule E Parts II and III, and Schedule F, netted and
+    # floored at zero as a total.
     - farm_operations_income
     - total_self_employment_income
     - partnership_s_corp_income
+    - estate_income
+    - other_net_gain
+    # MI-1040CR line 17, net royalty or rent income: U.S. Schedule E Parts I,
+    # IV (REMIC income, which has no input) and V, netted and floored at zero
+    # as a total.
     - rental_income
     - farm_rent_income
     - pension_income
@@ -45,5 +53,7 @@ metadata:
     href: https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/IIT/TY2024/MI-1040-Instructions.pdf#page=31
   - title: Michigan 2025 Individual Income Tax Instructions
     href: https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/IIT/TY2025/MI-1040-Book.pdf#page=31
+  - title: Michigan 2025 Individual Income Tax Instructions, Total Household Resources
+    href: https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/IIT/TY2025/MI-1040-Book.pdf#page=26
   - title: Michigan Compiled Laws Chapter 9 Section 206.508 - Definitions. (4)
     href: https://law.justia.com/codes/michigan/2022/chapter-206/statute-act-281-of-1967/division-281-1967-1/division-281-1967-1-9/section-206-508/
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		Michigan household resources net business and rental income within MI-1040CR lines 16 and 17 before flooring each total at zero, count only the claimant's and spouse's business and rental items on those two lines (MCL 206.508(3)), count estate and trust income and Form 4797 ordinary gains on line 16, and no longer subtract business, rental or capital losses again as Schedule 1 adjustments on line 30.