Form Tc-65 - Partnership/ Limited Liability Partnership/ Limited Liability Company - 2012 Page 3
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26General Instructions and Information
WhatÊs New
Filing Requirements
• Recycling Market Development Zone Credit. The
A partnership or other entity treated as a partnership for
Legislature has reinstated this credit for taxable
federal tax purposes, all of whose partners or members
years beginning after Dec. 31, 2011. See page 16.
are Utah resident individuals, is not required to fi le a
Utah return, TC-65, if:
• Credit for Increasing Research Activities in Utah.
The credit for qualifi ed research expenses incurred
• it is not a pass-through entity taxpayer, and
in the taxable year has been reduced from 9.2% to
• it maintains records that show each partner’s or
7.5%. See page 16.
member’s share of income, losses, credits, and
• Veteran Employment Tax Credit. A new nonrefund-
other distributive items, and those records are made
able credit is allowed for hiring a qualifi ed recently
available to the Tax Commission upon request.
deployed veteran. See page 17.
A partnership or other entity treated as a partnership
• Apportionment Fraction for “Sales Factor
for federal tax purposes with any partners or members
Weighted Taxpayers.” For tax years beginning in
who are not Utah resident individuals or that is itself a
2012, the calculation of the apportionment fraction
pass-through entity taxpayer is required to fi le a TC-65.
on Schedule J has changed to weight the sales
factor 10 times for a business treated as a sales
Pass-through Entity
factor weighted taxpayer. See page 11.
Withholding Requirements
Reminder
Partnerships and business entities treated as partner-
ships are considered pass-through entities (see UC
TC-250: List all nonrefundable and refundable credits
§59-10-1402(9)) and, for tax years beginning on or
received from an upper-tier pass-through entity on a
after Jan. 1, 2009, are required to withhold Utah income
Utah Schedule K-1, as well as any mineral production
tax on all nonresident individual partners, and on all
withholding tax credit received on a form TC-675R.
resident business and nonresident business partners.
These partners are collectively referred to as pass-
Partnership Defined
through entity taxpayers (see UC §59-10-1402(10)).
A partnership is not required to withhold on a partner
A “partnership” is any unincorporated entity that is
that is exempt from tax under UC §59-7-102(1)(a) or
treated as a partnership under federal income tax
§59-10-104.1, or the partnership is a plan under IRC Sec-
law, including general partnerships, limited partner-
tions 401, 408 or 457 and is not required to fi le a return
ships, limited liability partnerships, and limited liability
under UC Chapter 7, or is a publicly traded partnership
companies. A “partner” includes a partner or member
as defi ned under UC §59-1403.2(1)(b)(iv).
of one of these entities.
Utah imposes a 5 percent withholding tax on all Utah busi-
ness and nonbusiness income derived from or connected
Partnerships Not
with Utah sources and attributable to pass-through entity
Subject to Tax
taxpayers. The partnership may reduce this withholding by
any mineral production withholding tax and previous pass-
A partnership is not subject to Utah income tax. How-
through entity withholding tax allocated to the partner. This
ever, partners conducting business are liable for Utah
withholding tax must be paid to the Tax Commission by the
income tax in their separate or individual capacities.
original due date of the return, without regard to extensions.
A partnership must withhold Utah tax on all nonresi-
The calculation of the required Utah withholding tax is
dent individual pass-through entity taxpayers and all
done on Schedule N. See the instructions for Schedule
resident or nonresident business pass-through entity
N on page 21 for more details.
taxpayers. See Pass-through Entity Withholding Re-
quirements below.
The partnership must provide a Utah Schedule K-1 to
each partner showing the amount of Utah withholding
Pass-through Entity
paid on behalf of the partner. This withholding tax is
then claimed as a credit by the partner on the partner’s
A pass-through entity is an entity whose income, gains,
personal return.
losses, deductions and/or credits fl ow through to part-
If this partnership has an interest in another partnership,
ners and members for federal tax purposes.
that other partnership is required to withhold Utah income
tax on Utah income allocated to this partnership. The
Pass-through Entity Taxpayer
other partnership must provide a Utah Schedule K-1
showing the amount of Utah withholding tax paid on
A pass-through entity taxpayer is any entity which has
behalf of this partnership. This withholding tax must be
income, gains, losses, deductions and/or credits passed
reported on TC-250 and then allocated to the partners of
to it from a pass-through entity (e.g., an individual who
this partnership to be claimed on their personal returns.
is a partner in a partnership, or a partnership which is
Enter this previous pass-through entity withholding tax
a partner in another partnership).
for each partner on Schedules K and K-1.
Page 1
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