I run it on the output of my return after the manifold not on the drain. Hard to explain, but easy once you understand how the Bypass works. From the pump I go through 4 Ts that are the manifold I then have a gate valve on the main return right after manifold as this allows you to build some pressure to push things through manifold so they do not free flow. After this it is heading to my returns and this is where you put the Bypass.
I like to use Street T's for the manifold as they allow you to plumb your valves closer together. supplyhouse.com has quick shipping and carries 4 fittings I like to have on hand when plumbing a tank. They have Street T, Sweep 90's, Street 45, and street 22.5 Spears fittings. They do not offer all these fittings in Grey schedule 80, but schedule 40 is plenty strong and flows more than schedule 80. I got caught up in grey fittings on my first build and realized it is way cheaper to go schedule 40 white fittings and plenty strong. I did just buy some red pipe from BRS to go on my new office build in keeping with the red white bubble king look that the tank has.
Here are links to the fittings that help me keep things clean and efficient when plumbing in all these accessories to run one pump for everything.
Street T awesome for building manifolds!
http://www.supplyhouse.com/Spears-444-015-1-1-2-PVC-Sch-40-Street-Tee-Spigot-x-Socket-x-Socket
Sweep bends, 1/4th the head of a standard 90 fitting added for more efficiency when changing direction.
http://www.supplyhouse.com/Spears-406-010S-1-PVC-Sch-40-90-Sweep-Elbow
Street 45 able to make things tight and close when out of room.
http://www.supplyhouse.com/Spears-427-010-1-PVC-Sch-40-45-Street-Elbow
Street 22.5 a few of these can jog around a tight spot or get you out of a bind I like the street and standard ones.
http://www.supplyhouse.com/Spears-442-010-1-PVC-Sch-40-22-5-Street-Elbow
http://www.supplyhouse.com/Spears-416-010-1-PVC-Sch-40-22-5-Elbow
These are the best quality PVC fittings that I have found and all you will not find in a local plumbing store, Marine Depot and BRS should take note and carry these fittings because they will help you plumb your tank like a pro or like me