Form 58 - North Dakota Partnership Income Tax Booklet

Withholding from

The use of the composite ﬁ ling method by a

If a partnership paid too much tax because of

nonresident individual

partnership is optional, and is a choice that

an error on its 2012 Form 58, the partnership

it may make on a year-to-year basis. The

generally has three years from the later of the

partners

partnership does not have to obtain prior

due date (excluding extensions) of the return

A partnership must withhold North Dakota

approval to use the composite ﬁ ling method,

or the date the return was actually ﬁ led in

income tax at the rate of 3.99% (.0399)

and it may ﬁ le a composite return regardless

which to ﬁ le an amended return to correct the

from the distributive share of North Dakota

of whether it has income or a loss for the tax

error and claim a refund of the overpayment.

income of its nonresident individual partners.

year.

This requirement does not apply to actual

See N.D.C.C. § 57-38-40 for other time

distributions made by the partnership to

Exception to withholding. A partnership

periods that may apply.

nonresident individual partners during the

does not have to withhold North Dakota

How to prepare an amended 2012 return

tax year; instead, the withholding amount

income tax from the distributive share of

is calculated on the partners’ year-end

North Dakota income of an eligible partner

Obtain a blank 2012 Form 58.

distributive share of income and is reported

who elects to be included in a composite

Enter the partnership’s name, current

on the Form 58 ﬁ led for the tax year. An

return.

address, FEIN, etc., in the top portion of

amount less than 3.99% of the distributive

page 1 of Form 58.

Eligible partner. An eligible partner is an

share may be withheld if the partner meets

individual who:

Mark the “Amended return” circle at the

certain conditions—see Form PWA for

top of page 1 of Form 58.

•

Is a nonresident of North Dakota; and

details. Withholding is not required if:

Complete Schedules FACT, K, and KP

•

Does not have any North Dakota income

•

The distributive share of North Dakota

using the corrected information. Then

from other than the partnership or any

income is less than $1,000; or

complete lines 1 through 3 on page 1 of

other partnership, S corporation, trust,

•

The nonresident individual partner

Form 58.

or limited liability company (ﬁ ling as a

elects to have his or her distributive

partnership).

Complete line 4 on page 1 of Form 58

share of North Dakota income included

by entering the total taxes due from the

in, and the tax on it calculated under,

An eligible partner may elect to be included

previously ﬁ led 2012 Form 58, page 1,

the composite ﬁ ling method—see

in a composite return regardless of the

line 3.

“Composite ﬁ ling method” in the next

amount of the partner’s distributive share of

Complete line 5 (overpayment) or line 8

section for more information.

North Dakota income (or loss). In the case of

(tax due), whichever applies. If there

a loss, the composite tax is zero.

The amount withheld for a partner is reported

is an overpayment on line 5, enter the

in Column 7, Schedule KP, Form 58. The

Composite ﬁ ling method procedure. The

full amount on line 7 (refund). On an

partnership must submit a payment with

distributive share of North Dakota income

amended return, the amount credited to

Form 58 for the total withholding reported

of an electing partner is multiplied by the

the next year’s estimated tax (line 6) may

on Schedule KP. See the instructions to

highest individual income tax rate (3.99% for

not be increased or decreased.

Schedule KP and Schedule K-1 (Form 58) for

the 2012 tax year) to determine the partner’s

Attach a statement explaining the

more information.

composite income tax. (If the North Dakota

reason(s) for ﬁ ling the amended return.

distributive share is a loss, the composite

Publicly traded partnership. A publicly

If it is because of changes the partnership

tax is zero.) No North Dakota adjustments,

traded partnership as deﬁ ned by section

or the IRS made to the partnership’s

deductions, or tax credits are allowed in

7704(b) of the Internal Revenue Code that

2012 Federal Form 1065 (or 1065-B),

calculating the tax due under the composite

is treated as a partnership for federal income

attach a copy of the amended federal

ﬁ ling method. The Form 58 serves as the

tax purposes is not subject to this withholding

return or IRS notice.

composite return. The composite income tax

requirement if it reports each unitholder with

Complete and provide a corrected

calculated for a partner is reported in Column

a North Dakota distributive share of income

Schedule K-1 (Form 58) to the partners,

8, Schedule KP, Form 58. The partnership

over $500 on Form 58, Schedule KP.

as required.

must submit a payment with Form 58 for

the total composite income tax reported on

Composite ﬁ ling method

Reporting federal changes

Schedule KP.

A composite ﬁ ling method is available to

If the Internal Revenue Service (IRS) changes

Election. If an eligible partner agrees to

a partnership with one or more eligible

or audits the federal partnership return, or

be included in a composite return, the

partners. Under this method, a partnership

if a partnership ﬁ les an amended federal

partnership’s calculation and reporting of

ﬁ les one return, called a “composite return,”

partnership return, an amended North Dakota

a composite income tax for the partner

on behalf of one or more eligible partners.

Form 58 must be ﬁ led within ninety days after

in Column 8 of Schedule KP of Form 58

The composite return and the partnership’s

the ﬁ nal determination of the IRS changes

constitutes the partner’s election to be

payment of the income tax calculated on it

or the ﬁ ling of the amended federal return.

included in the composite return.

satisﬁ es the North Dakota income tax ﬁ ling

Enclose a copy of the IRS audit report or the

and payment obligations of the eligible

amended federal partnership return with the

Correcting a previously ﬁ led

partners who elect to be included in it.

amended North Dakota Form 58.

return

Therefore, the electing partners do not have to

ﬁ le their own North Dakota income tax return

If a partnership needs to correct an error on

to report or pay tax on their distributive share

Form 58 after it is ﬁ led, the partnership must

of North Dakota income.

ﬁ le an amended return. There is no special

form for this purpose. See “How to prepare an

amended return” below.

Form 58 - North Dakota Partnership Income Tax Booklet - 2012 Page 5

Related Articles

Related forms

Related Categories