Form 58 - Partnership Income Tax - 2013 (Page 5 of 35) in pdf

is calculated on the partners’ year-end

Exception to withholding. A partnership

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

distributive share of income and is reported

does not have to withhold North Dakota

periods that may apply.

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

income tax from the distributive share of

How to prepare an amended 2013 return

amount less than 3.22% of the distributive

North Dakota income of an eligible partner

share may be withheld if the partner meets

who elects to be included in a composite

Obtain a blank 2013 Form 58.

certain conditions—see Form PWA for

return.

Enter the partnership’s name, current

details. Withholding is not required if:

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

Eligible partner. An eligible partner is an

•

The distributive share of North Dakota

page 1 of Form 58.

individual who:

income is less than $1,000; or

Mark the “Amended return” circle at the

•

Is a nonresident of North Dakota; and

•

The nonresident individual partner

top of page 1 of Form 58.

•

Does not have any North Dakota income

elects to have his or her distributive

Complete Schedules FACT, K, and KP

from other than the partnership or any

share of North Dakota income included

using the corrected information. Then

other partnership, S corporation, trust,

in, and the tax on it calculated under,

complete lines 1 through 3 on page 1 of

or limited liability company (ﬁ ling as a

the composite ﬁ ling method—see

Form 58.

partnership).

“Composite ﬁ ling method” in the next

Complete line 4 on page 1 of Form 58

section for more information.

An eligible partner may elect to be included

by entering the total taxes due from the

in a composite return regardless of the

The amount withheld for a partner is reported

previously ﬁ led 2013 Form 58, page 1,

amount of the partner’s distributive share of

in Column 7, Schedule KP, Form 58. The

line 3.

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

partnership must submit a payment with

Complete line 5 (overpayment) or line 8

a loss, the composite tax is zero.

Form 58 for the total withholding reported

(tax due), whichever applies. If there

on Schedule KP. See the instructions to

Composite ﬁ ling method procedure. The

is an overpayment on line 5, enter the

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

distributive share of North Dakota income

full amount on line 7 (refund). On an

more information.

of an electing partner is multiplied by the

amended return, the amount credited to

highest individual income tax rate (3.22% for

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

Publicly traded partnership. A publicly

the 2013 tax year) to determine the partner’s

not be increased or decreased.

traded partnership as deﬁ ned by section

composite income tax. (If the North Dakota

7704(b) of the Internal Revenue Code that

Attach a statement explaining the

distributive share is a loss, the composite

is treated as a partnership for federal income

reason(s) for ﬁ ling the amended return.

tax is zero.) No North Dakota adjustments,

tax purposes is not subject to this withholding

If it is because of changes the partnership

deductions, or tax credits are allowed in

requirement if it reports each unitholder with

or the IRS made to the partnership’s

calculating the tax due under the composite

a North Dakota distributive share of income

2013 Federal Form 1065 (or 1065-B),

ﬁ ling method. The Form 58 serves as the

over $500 on Form 58, Schedule KP.

attach a copy of the amended federal

composite return. The composite income tax

return or IRS notice.

calculated for a partner is reported in Column

Composite ﬁ ling method

Complete and provide a corrected

8, Schedule KP, Form 58. The partnership

A composite ﬁ ling method is available to

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

must submit a payment with Form 58 for

a partnership with one or more eligible

as required.

the total composite income tax reported on

partners. Under this method, a partnership

Schedule KP.

Reporting federal changes

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

Election. If an eligible partner agrees to

on behalf of one or more eligible partners.

If the Internal Revenue Service (IRS) changes

be included in a composite return, the

The composite return and the partnership’s

or audits the federal partnership return, or

partnership’s calculation and reporting of

payment of the income tax calculated on it

if a partnership ﬁ les an amended federal

a composite income tax for the partner

satisﬁ es the North Dakota income tax ﬁ ling

partnership return, an amended North Dakota

in Column 8 of Schedule KP of Form 58

and payment obligations of the eligible

Form 58 must be ﬁ led within ninety days after

constitutes the partner’s election to be

partners who elect to be included in it.

the ﬁ nal determination of the IRS changes

included in the composite return.

Therefore, the electing partners do not have to

or the ﬁ ling of the amended federal return.

ﬁ le their own North Dakota income tax return

Enclose a copy of the IRS audit report or the

Correcting a previously ﬁ led

to report or pay tax on their distributive share

amended federal partnership return with the

return

of North Dakota income.

amended North Dakota Form 58.

If a partnership needs to correct an error on

The use of the composite ﬁ ling method by a

W-2/1099 reporting

Form 58 after it is ﬁ led, the partnership must

partnership is optional, and is a choice that

ﬁ le an amended return. There is no special

requirement

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

form for this purpose. See “How to prepare an

partnership does not have to obtain prior

Every partnership doing business in North

amended 2013 return” below.

approval to use the composite ﬁ ling method,

Dakota that is required to ﬁ le Federal

and it may ﬁ le a composite return regardless

Form 1099 or W-2 must also ﬁ le one with the

If a partnership paid too much tax because of

of whether it has income or a loss for the tax

Ofﬁ ce of State Tax Commissioner. For more

an error on its 2013 Form 58, the partnership

year.

information, obtain the guideline Income Tax

generally has three years from the later of the

Withholding: Information Returns.

due date (excluding extensions) of the return

or the date the return was actually ﬁ led in

which to ﬁ le an amended return to correct the

error and claim a refund of the overpayment.

Form 58 - Partnership Income Tax - 2013 Page 5

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