Michigan 5674 needed for ZERO federal NOL deduction?

[Flutesss]

I live in Michigan and own one rental property in Indiana. I am working with TT Premier. I spent a lot of money replacing flooring last year which resulted in a loss of $549 on my federal taxes for 2021. I am now attempting to complete my Michigan state taxes and TT says "Since you claimed a federal net operating loss deduction of ZERO on your federal return, you must request Michigan Form 5674 (Mich NOL Deduction), complete it manually, and attach it to your return. 

Whaaat? I am not a business. I do not claim the safe harbor deduction yet TT gave me a credit on federal taxes of $10 for this. 

1) Is there a way to remove the $10 QBI safe harbor credit? I answered no when asked if I want to take the deduction. I don't know what else to do? Having this credit is making things complicated.

2) Must I really fill out the Michigan Form 5674 since I have a ZERO deduction on my federal taxes?

Thank you for your help. This is so frustrating.

[RobertB4444]

@Flutesss  I have bad news - a rental property IS a business and is treated as such.  If you invested so much into your rental property (AND expensed it in the same year) that it made your AGI end up in a negative number there are all sorts of hoops that you will get to jump through in order to prove this deduction.  

The question that I have is why the NOL is on your Michigan return at all.  If the property is in Indiana then all of the deductions and income for that house should be on your Indiana return and you should be paying taxes on the Michigan source income on your Michigan return without the benefit of any deductions related to the rental house.  It sounds like you need to go back through the state tax returns and make sure that these different states are aware of what should be on the different returns.