Form Tc-65 Form Tc-65 Tax Return & Instructions Page 24
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27Schedule N · Pass-through Entity
Withholding Tax Instructions
The partnership, as a pass-through entity, must pay or
Requesting the waiver for all or specifi c partners does
withhold tax on behalf of each nonresident individual
not relieve the partnership from the responsibility for the
partner and each resident or nonresident business
payment of Utah tax on the income allocated to partners
partner (collectively referred to as pass-through entity
if the partners do not pay. If the partner or partners for
taxpayers) unless a withholding waiver request is made
whom you requested a waiver fail to fi le a return and
(see below). A partnership is not required to withhold
make the required payment in a timely manner, you will
Utah tax on a partner if:
be liable for the withholding on those amounts, plus any
associated penalties and interest.
the par tner is exempt from taxation under
UC §59-7-102(1)(a) or §59-10-104.1,
Line A – Name of Partner
(Pass-through Entity Taxpayer)
the partnership is a plan under IRC Sections 401, 408
or 457 and is not required to fi le a return under UC
Enter the name of each nonresident individual partner,
Chapter 7, or
or resident or nonresident business partner (referred
to as a pass-through entity taxpayer).
the partnership is a publicly traded partnership as
defi ned under UC §59-10-1403.2(1)(b).
Line B – Withholding Waiver for this Partner
If you entered either a “1” or a “2” in the Withholding
A partner’s share of taxable income is based on the
Waiver Request box at the top of the Schedule N,
percent determined in the partnership agreement for
enter an “X” on line B if this partner is included in the
the partner on the last day of the partnership fi ling
waiver request.
period, unless there was a change in ownership dur-
ing the fi ling period. If there was a change in partners
If you check this box, enter a “0” on line F for the partner.
during the year, each partner’s percentage of income
is prorated by the number of days the interest was
Line C – SSN/EIN of Partner
owned during the fi ling period.
Enter the social security number (SSN) of each non-
resident individual partner, or the federal employer
Partners may take a credit for the amount of tax paid
identifi cation number (EIN) of each resident or non-
by the partnership on their behalf. To claim the credit,
resident business partner.
the partner must fi le a Utah income tax return for the
taxable year. A partner subject to withholding by the
Line D – Percent of Income or Ownership for
partnership and who has no other Utah source income
Partner
may elect to forego the credit and not fi le a Utah income
Enter the percent of income for each partner based on
tax return. However, partners with income or loss from
the partnership agreement, or the percent of owner-
other Utah sources must fi le a Utah income tax return.
ship in the partnership by each partner, to four decimal
A partner who is eligible for Utah tax credits, in addi-
places. You must enter either the percent of income or the
tion to the pass-through tax withheld, must fi le a Utah
percent of ownership in the partnership for all partners;
income tax return to claim those credits.
do not mix the percentages. See Utah Rule R865-9I-13.
If the partner is a pass-through entity, it must fi le a Utah
return to report its income/loss and withholding alloca-
Line E – Income (Loss) Attributable to Utah
tions to its partners/members/shareholders.
Enter the income (loss) attributable to Utah and taxable
to the pass-through entity taxpayer.
Partnerships having partners for whom withholding is
required must complete Schedule N showing the amount
Calculate this income for a pass-through entity tax-
of Utah income attributable to the partner, the amount
payer by multiplying the amount on Schedule A, line
of Utah tax on such income (5%), any Utah mineral
16 by each pass-through entity taxpayer’s percentage
production withholding tax and upper-tier Utah pass-
shown on line D (or in accordance with the partnership
through entity withholding tax credited to the partners,
agreement, if different).
and the net amount of withholding tax this partnership
If the partner received a guaranteed payment attributable
must pay on behalf of such partners. Use additional
to Utah source income, include that guaranteed payment
forms TC-65, Schedule N, if needed,
(other than any health insurance included in the guaran-
teed payment) in the amount reported on line E. Utah
Withholding Waiver Request
pass-through withholding tax must include that payment.
Guaranteed payments are sourced to the state or country
(UC §59-10-1403.2(5))
where the income was generated, regardless of provisions
You may request a waiver from the requirement to with-
which are contrary in the partnership agreement.
hold Utah income tax on pass-through entity taxpayers
by entering a “1” in the box if the waiver is for all partners,
Line F – 5% of Income
or a “2” if the waiver is for only certain partners. Also
Multiply the amount of income attributable to Utah for each
enter an “X” on line B and a “0” in column F for each
pass-through entity taxpayer (line E) by 5%. If the amount
partner for whom the waiver is requested.
on line E is a loss, enter “0”. Also enter “0” if the waiver re-
quest has been requested for this partner (box B checked).
Page 22
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