As a MD CPA I get the notice on maybe 25% of the returns even though the K-1 was attached.  I actually get this on many states.  My guess is that K-1 withholding is not tracked by the states like W-2 or 1099 withholding is, so they cannot see it in their system (they don't post the withholding from the 1065/1120S to the individual).  It's embarrassing because the client thinks we messed up but after explanation and mail in, all is well.