Form It-65 - Indiana Partnership Return Booklet - 2013 Page 6
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32Note: Effective Jan. 1, 2013, all businesses must electronically file and
If the withholding agent has underpaid the payroll or nonresident
remit sales and/or withholding taxes. Businesses can file and remit their
partner withholding liability for the year, the agent does not submit
withholding taxes through INtax ( ) or a third-party
the payment with Form WH-3. Instead, it completes Form
WH-1U. This is included with the WH-3 packet if you file fewer
vendor; they can also use INtax to file and remit their sales tax.
than 25 wage statements per year and still receive paper coupons.
Noncomposite Withholding Payment
The withholding agent submits the payment under separate
cover and must indicate the Indiana TID and the period to which
Form WH-1 – Amounts withheld from employees and/or
the payment should be applied. If you file more than 25 wage
nonresident partners who are not individuals or who opted out of the
statements per year or file fewer than 25 but filed electronically
composite return should be included in the remittance with
last year, you must make your payment for underpaid liabilities
Form WH-1. The nonresident withholding account will be separate
via INtax.
from any existing employees withholding account.
Businesses currently filing paper coupons will need to transition to
Composite Withholding Payments (Form IT-6WTH)
filing via the state’s INtax program or use a third-party vendor to
A partnership that files a composite return must withhold Indiana
electronically transmit Form WH-1.
state and/or county income taxes from all nonresident individual
partners. Amounts withheld from nonresident individual partners
Form WH-3 – The withholding agent must complete and file an
included in the composite return may be remitted using Form
annual Withholding Tax Reconciliation Return, Form WH-3. This
IT-6WTH. Payment is due the 15th day of the fourth month
must be filed by the end of the second month following the close
following the close of the partnership’s tax period. To make
of the tax period for nonresident withholding accounts. It must be
additional payments, please contact the Corporate Tax Section
filed by the 15th day of the fourth month following the close of the
at (317) 232-0129 for an additional Form IT-6WTH. The total
tax period for nonresident and one-time distribution withholding
payments are claimed as a credit on line 9 of Form IT-65.
accounts. The agent must include the following:
•
The Indiana taxpayer identification number (TID);
Partner’s Liability and Filing Requirements
•
The partnership’s name; and
A partner’s share of profit or loss from a partnership is included in
•
The calendar year.
the partner’s calculation of federal AGI. It is generally subject to the
same rules for arriving at Indiana AGI. Thus, a partner’s distributive
Form WH-3 is used to reconcile the monthly or annual WH-1
share, before any modifications required by Indiana statutes, is the
returns. When remitting this form, the business must also remit the
same ratio and amount as determined under IRC Section 704 and
supporting W-2 and WH-18 reports. Effective Jan. 1, 2013, the way
its prescribed regulations. The partners include their share of all
in which you must submit the WH-3 depends on the number of
partnership income, whether distributed or undistributed, on their
wage statements you file in a year. Follow these guidelines:
separate or individual Indiana income or franchise tax returns. Each
•
If you are filing fewer than 25 wage statements for your
partner’s distributive share of income is adjusted by modifications
entire tax year, you can still file paper copies of the
provided for in IC 6-3-1-3.5(a) or (b).
withholding forms (WH-1, WH-18, WH-3, W-2s, W-2Gs,
and 1099s). You can also submit them via the state’s online
Individual Partners
INtax application ( ) or use a third-party
Residents – A resident partner reports the entire distributive share
vendor to electronically submit them.
If you are filing more than 25 but fewer than 3,500 wage
•
of partnership income (loss) as adjusted, no matter where the
statements, you must file all of your withholding forms
partnership’s business is located or in which states it does business.
electronically. You can either use the state’s online INtax
Individual partners must complete Form IT-40, Indiana Individual
application ( ) or use a third-party vendor
Income Tax Return.
to electronically submit them.
Nonresidents –The partner must complete Form IT-40PNR, Indiana
If you are filing more than 3,500 wage statements, you
•
Part-Year or Full-Year Nonresident Individual Income Tax Return.
must either have a third-party vendor submit them for you
If the nonresident individual partner has filed the IN-COMPA
or file using bulk upload. For more information, see the
affidavit with the partnership to opt out of the composite filing, he
department’s Bulk Upload Guide at
must complete Form IT-40PNR (Indiana Part-Year of Full-Year
Nonresident Individual Income Tax Return). The partner must claim
How Fill to Out Form WH-3 – On Form WH-3, the withholding
credit on that return by enclosing state Form WH-18 for amounts
agent enters the total annual amount of state and county income
withheld by the partnership from his distributive share of income.
taxes or other taxes withheld from employees and nonresidents
The partner must claim credit on that return for amounts withheld
receiving income subject to Indiana withholding. These amounts
by the partnership from the partner’s distributive share of income.
must match what is listed on federal Form W-2 and Indiana Form
Form WH-18, copy C, must be enclosed with the return to verify any
WH-18. The amount of county tax withheld during the year is
such withholding credit amount.
separated according to the amounts withheld for each county.
Nonresident partners are exempt from the filing requirements of
If the withholding agent has overpaid the withholding liability for the
an Indiana Individual Income Tax Return only if they are properly
year, it is entitled to a refund. Enter the amount to be refunded on
included as members of a composite return.
Form WH-3. Also, provide an explanation. Nonresident withholding
accounts should not use the WH-3 for claiming a refund. The entity
claiming the credit may be entitled to a refund on the appropriate
form filed with the department.
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