I have a partnership in which about half the partners are retirement plans. It is an IL partnership but generates income (and losses) in multiple states, which is a problem of its own, but that's another complaint for another day. The IL return is calculating and adding IL pass-through withholding on the out of state partners, many of which are retirement plans. I understand that pass-through withholding must be paid for the out of state individuals, but there should be no tax due from the retirement plan partners. How do I prevent the retirement plan partners from being assessed the pass-through withholding?
