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address, federal identification number, Kentucky Corporation/

share of income shall include all items of income or deduction

LLET Account Number, if applicable, and net distributive income;

used to compute adjusted gross income on the Kentucky return

(b) the nonresident partner or member is exempt from Kentucky

that is passed through to the partner, member or shareholder

income tax as provided by KRS 141.040(1); (c) the partner,

by the pass–through entity, including but not limited to interest,

member or shareholder is a nonresident individual and the pass–

dividend, capital gains or losses, guaranteed payments and

through entity is a qualified investment pass–through entity as

rents (KRS 141.206(16)).

provided by KRS 141.206(15)(a); or (d) the partner or member is

a pass–through entity as provided by KRS 141.010(26).

The composite return of a pass–through entity shall be

filed with the Department of Revenue on Form 740NP–WH,

For taxable years beginning on or after January 1, 2012, a pass-

Kentucky Nonresident Income Tax Withholding on Distributive

through entity required to withhold Kentucky income tax as

Share Income Report and Composite Income Tax Return. The

provided by KRS 141.206(5) shall make estimated tax payments

composite return box on the front of Form 740NP–WH must

if required by the provisions of KRS 141.206(6). If the pass-

be checked to indicate that it is a composite return, and a

through entity is required to make estimated tax payments for

Form PTE–WH must be completed for each of the electing

taxable years beginning on or after January 1, 2012, use Form

nonresident individual partners, members or shareholders.

740NP-WH-ES (Kentucky Estimated Tax Vouchers).

The composite return box on each Form PTE–WH must be

checked to indicate that the PTE–WH is a result of a composite

return. Form 740NP–WH and Copy A of Form PTE–WH shall be

The reporting of a nonresident individual’s, estate’s or trust’s net

mailed to the Kentucky Department of Revenue with payment

distributive share income and withholding on Form 740NP–WH

of tax due by the 15th day of the fourth month following the

at the maximum rate of six (6) percent shall satisfy the filing

close of the pass–through entity’s taxable year. Also, Copy

requirements of KRS 141.180 for a nonresident individual, estate

B and C of Form PTE–WH shall be provided to the partners,

or trust partner, member or shareholder whose only Kentucky

members or shareholders included in the composite return.

source income is net distributive share income. The nonresident

individual, estate or trust partner, member or shareholder may

For taxable years beginning on or after January 1, 2012, a

file a Kentucky Individual Income Tax Return Nonresident or

pass–through entity filing a composite return shall make

Part–Year Resident (Form 740–NP) or a Kentucky Fiduciary

estimated tax payments if required by the provisions of KRS

Income Tax Return (Form 741) to take advantage of the graduated

141.206(6). If the pass-through entity is required to make

tax rates, credits and deductions.

estimated tax payments for taxable years beginning on or

after January 1, 2012, use Form 740NP-WH-ES (Kentucky

A pass–through entity shall complete Form 740NP–WH and

Estimated Tax Vouchers).

Form PTE–WH for each nonresident individual, estate or trust

partner, member or shareholder and each corporate partner

Substitute Forms—Any form to be used in lieu of an official

or member and mail Form 740NP–WH and Copy A of Form

Department of Revenue form must be submitted to the

PTE–WH to the Kentucky Department of Revenue with payment

department for prior approval.

by the 15

day of the fourth month following the close of the

pass–through entity’s taxable year. Also, Copy B and C of

Required Forms and Information—A single member LLC must

Form PTE–WH shall be provided to the partners, members

enter all applicable information on Form 725, attach a schedule

or shareholders. Form 740NP–WH and Form PTE–WH are

for each line item or line item instruction which states “attach

available at

schedule, ” and attach the following forms or schedules, if

applicable.

Composite Return—Nonresidents Only

Kentucky Forms and Schedules

Do not include a nonresident individual (includes an estate

1. Kentucky Single Member LLC Individually Owned LLET

or trust partner, member or shareholder) partner, member or

Return (Form 725)

shareholder in a composite return if the partner’s, member’s

or shareholder’s distributive share income was subject to

2. Kentucky Single Member LLC Individually Owned Composite

withholding and reported on Form 740NP–WH and PTE–WH.

Return Schedule (Schedule CP)

3. Apportionment and Allocation (Schedule A)

The composite return applies only to nonresident individual

4. Apportionment and Allocation—Continuation Sheet

(includes an estate or trust partner, member or shareholder)

(Schedule A–C)

partners, members or shareholders: (i) whose distributive share

5. Limited Liability Entity Tax (Schedule LLET)

income was not subject to withholding as provided by KRS

6. Limited Liability Entity Tax—Continuation Sheet (Schedule

141.206(5); (ii) whose only source of distributive share income

within this state is from one or more pass–through entities; and

LLET–C)

(iii) that elect to be included in a composite return as provided

7. Application for Filing Extension (Form 41A720SL)

by KRS 141.206(16).

8. Tax Credit Summary Schedule (Schedule TCS)

Required Federal Form and Schedules

For taxable years beginning on or after January 1, 2007, the

Department of Revenue will permit the filing of a “composite

All single member LLC entities must provide a copy of the

return” as provided by KRS 141.206(16) on behalf of electing

following federal forms which were submitted to the Internal

nonresident individual partners, members or shareholders of

Revenue Service:

a pass–through entity as defined in KRS 141.010(26). Income

1. Form 1040, 1041 or 1065 (all pages)

tax will be computed at the highest marginal rate provided in

KRS 141.020 on the partner’s, member’s or shareholder’s pro

2. Schedule C—Profit or Loss from Business

rata share of the distributive share income from a pass–through

3. Schedule D—Capital Gains and Losses

entity doing business in, or deriving income from sources within

4. Schedule E—Supplemental Income and Loss

Kentucky. The partners’, members’ or shareholders’ distributive

Instructions For Form 725 - Kentucky Single Member Llc Individually Owned Llet Return - 2011 Page 4

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