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 

[chris_R]

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]

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]

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.