- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Do taxpayers who receive K-1's from businesses whose income is generated in a different state need to file a non-resident return in that state (assuming there's enough income to require a return)?
For example, a Florida resident receives an 1120S K-1 (50% owner of S-corp) based out of Maryland. All income from this business is generated in MD. Is a nonresident MD return required?
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Yes, if the amount is over the state's filing threshold.
Slava Ukraini!
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Sometimes
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
And they are likely to get back some of the MD nonresident withholding when they file the MD return.
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Withholding from what? There were no MD taxes withheld on the W2 and there aren't any withheld on the K-1.
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Sometimes as in if there's enough income to require a tax return? Or sometimes for another reason?
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
There should have been for the K-1 income.
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Even if no distributions were made?
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
States tax on income earned, not distributions.
Slava Ukraini!
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
MD doesn't care. If there is income on the K-1 they want their cut and they do it with "withholding".
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
So you're saying that MD requires you to withhold taxes on K-1 income? I haven't seen that. I read that the business pays a "pass through entity nonresident tax" if they have nonresident members. I guess the concept is the same as what you're saying, but I wouldn't consider that withholding.
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
Yes that's it. Excuse my "slang"
- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
If the entity filed a composite/group nonresident return your client does not have to file a MD return.