Re: S Corp Colorado part-year resident

david3

Single S Corp shareholder has a consulting business and moved from CO to FL during 2024.

PS automatically checks the nonresident box and shows errors in the K-1 worksheet for nonresident form DR 0107 or a composite filing.

The CO instructions say to mark a part-year resident as a resident and follow the resident instructions. Evidently, the CO portion of the K-1 income will be allocated on the shareholder's CO personal tax return.

Even if I override the shareholder information to mark the SH as a resident, PS still shows errors on the Sch K-1 worksheet for the composite filing and nonresident boxes.

How do I get rid of the errors and correctly prepare the CO S Corp tax return?

I am using PS Professional.

sjrcpa

The CO S Corp return will apportion the federal income to CO. Part V.

Have you done that?

Then you have CO Taxable income.

Not sure if you can do a CO Composite Nonresident return since taxpayer was a CO resident at the time it was earned.

The more I know the more I don’t know.

david3

Thank you for your help.

I originally completed Part V to apportion income to CO. However, after completing Part V, the CO K-1 worksheet shows errors in the section to check the Composite Filing box or the Nonresident Agreement Form DR 0107 box.

The Nonresident status is automatically checked in PS based on the S Corp's FL address.

I guess I will have the client sign a Nonresident Agreement Form DR 0107 and submit it with the CO S Corp tax return.

Have you had this situation before and filed the DR 0107? Or did you handle it a different way?

sjrcpa

For a single shareholder S Corp I probably would not do a composite nonresident return. In you situation the shareholder is already going to file a part year CO return.

Have you considered CO's SALT parity option? No sure if it can be done now or if you had to elect by a certain time.

The more I know the more I don’t know.

david3

Thanks again.

I agree - I never wanted to do a composite nonresident return nor a nonresident agreement since the client is a part-year CO resident and the S Corp is a part-year CO and part-year FL entity.

However, I can't find a work around the errors that PS is showing. PS seems to want to treat the S Corp and shareholder as CO nonresident and doesn't seem to have an option to select a part-year status.

sjrcpa

I thought you were trying to do the Composite return.

I don't use ProSeries so can't help with the errors.

The more I know the more I don’t know.