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INDIANA PENALTY FOR NON RESIDENTS NOT ON COMPOSITE SCHEDULE WHEN THEY HAVE A NET LOSS

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INDIANA PENALTY FOR NON RESIDENTS NOT ON COMPOSITE SCHEDULE WHEN THEY HAVE A NET LOSS

JAMES BOND

PROSERIES DOES NOT INCLUDE NON- RESIDENT SHAREHOLDERS/PARTNERS WITH A NET LOSS ON THE SCHEDULE COMPOSITE.  THIS IS RESULTING IN A $500 PENALTY BEING ISSUED TO THE TAXPAYER FOR FAILING TO LIST ALL NON- RESIDENTS ON THE COMPOSITE SCHEDULE.  THIS NEEDS BE CHANGED TO INCLUDE ALL NON-RESIDENT  SHAREHOLDERS/PARTNERS ON THE COMPOSITE SCHEDULE WHETHER THEY HAVE A LOSS OR INCOME. 

THANKS 

 

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3 Comments
chris_R
Level 1

I have this exact same situation.  IN S-Corp business with a couple of nonresidents.  The company as a whole and ALL shareholders have losses allocated.  The Schedule Composite is checked, but the form will not activate since all nonresident shareholders had losses.  I was under the belief that the schedule was not needed in this case, so it was filed without.  And we just received a notice of a $500 penalty for "not paying taxes on time".  Upon a call to the IN DOR, the rep stated the penalty was because a schedule composite was not filed.  I have been trying to get this schedule to populate in Proseries without any success.  To get the form to activate, I had to force the bottom line to be a net income (from net loss) then print out the form and manually correct it.    Does anyone have any more advice or knowledge of this issue?

IRonMaN
Level 15

So that makes at least three people in a week posting about the same issue.  Sounds like ProSeries dropped the ball on this one.

Hemant
Level 1

Hi!

I have also this same problem now, when the client received a notice from IN. Upon calling the IN state they mentioned Sch-Composite is needed, even when they have the details of NR Sch K1. 

Pro-series is not generating this form even when composite is selected for the NR taxpayer.

Not sure how to handle this and inform the client that this is a system (pro-series) issue. Seems we will receive few more notices for IN for other clients with similar scenario.

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