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RPD-41367 12

New Mexico Taxation and Revenue Department

Rev. 12/04/2012

2012 Annual Withholding of Net Income From a Pass-Through Entity Detail Report

Instructions

Page 3 of 4

to its owners, must refer the forms applicable to the specific

to New Mexico in accordance with the Uniform Division of

tax credit to determine how the tax credit is passed from the

Income for Tax Purposes Act.

PTE to its owners.

“Pass-through entity” means a personal services business

or any other business association other than:

Line 5. Enter the payments made using Form RPD-41355,

• a sole proprietorship;

Quarterly Pass-Through Entity Withholding Tax Return, or

the PTW-R, Pass-through Entity Withholding Tax Return Pay-

• an estate or trust that does not distribute income to ben-

ment, web application on the Department’s web site. Payments

eficiaries;

made using these payment methods must be subtracted to

• a corporation, limited liability company, partnership or other

determine the amount due on this report.

entity not a sole proprietorship taxed as a corporation for

federal income tax purposes for the tax year;

Line 6. Subtract the sum of lines 4 and 5 from line 3. This

• a partnership that is organized as an investment partner-

is the amount of withholding tax due on this report. The

ship in which the partner’s income is derived solely from

amount entered should not fall below zero. If it does, check

interest, dividends and sales of securities;

your figures or see the instructions for amending this report

• a single member limited liability company that is treated

in these instructions.

as a disregarded entity for federal income tax purposes,

Line 7: Add penalty if the entity fails to file timely or to pay the

• a publicly traded partnership as defined in Subsection (b)

amount on line 6 when due. Calculate the penalty by multiply-

of Section 7704 of the Internal Revenue Code.

ing the unpaid amount on line 6 by 2%, then by the number

of months or partial months for which the return or payment

“Personal Services Business” means a business organization

is late, not to exceed 20% of the tax due. The penalty may

that receives payments for the services of a performing artist

not be less than $5.00.

for purposes of the film production tax credit.

Line 8: Interest accrues daily on the unpaid principal of tax

“Owner” means a partner in a partnership not taxed as a

due, and can change on a quarterly basis. The effective an-

corporation for federal income tax purposes for the tax year,

nual and daily interest rates are posted on the Department’s

a shareholder of an S corporation or of a corporation other

web page at

or can be obtained by

than an S corporation that is not taxed as a corporation for

contacting the Department.

federal income tax purposes for the tax year, a member of

The formula for computing interest is:

a limited liability company or any similar person holding an

ownership interest in any pass-through entity. Owner also

Tax due x the daily interest rate for the quarter

means a performing artist to whom payments are due from

x number of days late = interest due.

a personal services business.

Line 9: Add lines 6, 7 and 8 to compute the total due.

“Partnership” means a combination of persons, including a

Signature: The form is not complete until the PTE or the PTE’s

partnership, joint venture, common trust fund, association,

pool or working agreement, or any other combination of per-

authorized agent has signed and dated the report. Enter the

sons treated as a partnership for federal income tax purposes.

e-mail address of the PTE or the PTE’s authorized agent.

Adjustments to the amount withheld:

IMPORTANT DEFINITIONS

•

The amount of tax withheld from the owner’s net income

“Net Income” means, for any pass-through entity (PTE), the

may be reduced, but not below zero, by the amount re-

income reported to an owner, by the PTE for federal income

quired to be withheld for oil and gas proceeds.

tax purposes, including ordinary business income or loss, net

•

If a PTE has deducted and withheld an amount pursuant

rental income or loss, guaranteed payments to a partner of

to the Oil and Gas Proceeds and Pass-Through Entity

a partnership, dividends, royalties and capital gain or loss,

Withholding Tax Act, from the net income of an owner

less associated deductions, plus interest earned on a state

that is also a PTE, the payee PTE may take credit for

or local bond, less interest earned on a bond issued by the

that amount in determining the amount the payee PTE

State of New Mexico or its political subdivisions, less income

must withhold and deduct.

from obligations of the United States less expenses incurred

to earn that income; in the case of a subchapter S corporation,

Reasonable Cause for Not Withholding.

“net income” also includes income taxable to the corporation

1. If the amount to be withheld from an owner’s allocable

for federal income tax purposes. Net income also includes

share of the net income in any calendar year is less than

appropriate allocation and apportionment of that income

Form Rpd-41367 12 - Annual Withholding Of Net Income From A Pass-Through Entity Detail Report - New Mexico Taxation And Revenue Department Page 5

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