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Instructions for Completing Schedule IN-EL
Tax Computation Form for Electing Partnerships
If you are a partnership that has made a valid election to be taxed at Column B
the partnership level for adjustments arising from a department audit Enter the state of residence for the partner. If the partner is a resident of a
or an amended return. Complete this information and provide a copy foreign country, enter “FC.”
of this schedule whenever you are filing an amended return reporting
adjustments subject to partnership-level tax. Do not provide this Column C
schedule with an original return. Include the net income attributable to the partner and subject to tax at
the partnership level. Do not include income that was previously flowed
Prior to completing this schedule, complete an amended IT-65 and through to the partner’s K-1.
report any changes on the amended IT-65. Include additional sheets with
the same columns if you have more than 12 partners. Example. Partner’s share of a partnership’s federal adjusted gross
income on the partnership’s original return was $50,000, with a bonus
Computation by Agreement depreciation addback of $10,000, for a net income of $60,000 reported on
By default, a partnership is required to compute tax at the partnership- Schedule IN-K-1 for a taxable year. After a DOR audit of the partnership,
level tax based on the category of the partner. See Information Bulletin Partner’s share of the partnership’s income was increased to $80,000,
#72A for further information regarding the default tax computation. If the with a reduction of the bonus depreciation addback to $7,000, for a net
partnership and the department has entered into an agreement to compute income of $87,000. The partnership makes an election to be subject to tax
tax in a manner other than the manner provided by statute, check this box. at the partnership level beginning with the department audit. For Partner,
The partnership must have a written agreement signed by the department the partnership would include $27,000 in Column C ($87,000 revised
in order to compute tax in an alternative manner. A copy of the agreement income minus $60,000 reported on Schedule IN K-1).
to compute tax must be provided to the department upon request.
Column D
Column A Multiply Column C by the appropriate tax rate for the taxable year. If the
Enter the two-digit entity code associated with the partner for whom computation of tax is by agreement, list the tax by the rate for the partner
tax is being remitted. Each of these codes should be reported using the as provided by the agreement. If no agreement to compute the tax is not
code applicable to the taxpayer for the partnership’s taxable year being in place:
amended rather than the year in which the amendment is filed. y CO - Use the corporate tax rate based on the partnership’s taxable
y CO - Enter this code if the partner is a C corporation subject to year. See Form IT-20 for applicable rates.
adjusted gross income tax and the corporation is not unitary with y CU - Zero percent. Include the partner’s income on an amended
the partnership. In the case of a nonprofit corporation, use this code Schedule Composite-COR if the partner is a nonresident partner.
to report any amounts that are unrelated business income to the Provide these partners with an amended Schedule IN K-1 and any
nonprofit corporation. For a nonprofit corporation, the amounts other information necessary to amend their respective returns.
subject to tax are presumed to be unrelated business income unless y FI - Use the financial institutions tax rate based on the partnership’s
the partnership has knowledge that the income would in fact be taxable year. See Form FIT-20 for applicable rates.
exempt to the nonprofit. y NP - Zero percent.
y CU - Enter this code if the partner is a corporation that is unitary y NR/NT/RE/RT - Use the individual rate in effect on the last day of
with the partnership. The standards for a unitary corporate- the partnership’s taxable year.
partnership relationship are determined under 45 IAC 3.1-1-153. y MI/PA/SC - Use the highest rate possible under Indiana law
This code is to be used both by corporations subject to adjusted (including county income tax rates) for the taxable year.
gross income tax and corporations subject to financial institutions See Information Bulletin #72A for the highest rate under Indiana law and
tax. Do not use this code for S corporations. generally for further information regarding rate computation.
y FI - Enter this code if the partner is a C corporation subject to
financial institutions tax and the corporation is not unitary with the Column E
partnership. In the case of a nonprofit corporation, use this code Include the net income attributable to the partner subject to tax at the
to report any amounts that are unrelated business income to the partnership level to the extent the income would be subject to county
nonprofit corporation. For a nonprofit corporation, the amounts tax for the partner. These should only be used for partners with Code
subject to tax are presumed to be unrelated business income unless NR or RE. Do not include income that was previously flowed through
the partnership has knowledge that the income would in fact be to the partner’s K-1. For nonresident partners, include an amount here
exempt to the nonprofit. only if the partner was subject to composite tax at the county level on the
y NP - Enter this code if the corporation is a nonprofit corporation partner’s K-1.
AND the income from the partnership would be exempt to the
nonprofit corporation. Column F
y NR - Enter this code if the partner is a nonresident individual. If a partner has income listed in Column E, multiply the amount by the
y NT - Enter this code is the partner is a nonresident estate or trust. county income tax for that partner. See Information Bulletin #72A for
y RE - Enter this code if the partner is a resident individual. further information regarding the county income tax rate to use.
y RT - Enter this code if the partner is a resident estate or trust.
y MI - Enter this code for any other type of entity not described above Column G
or for which the partnership cannot determine the entity type. Add Column D and Column F. Subtract credits attributable to the
y PA - Enter this code if the partner is an entity taxed as a partnership partner only if the computation by agreement box is checked. If the
for federal tax purposes, including limited partnerships, limited partnership has credits disallowed (or added credits permitted) and the
liability companies, limited liability partnerships, and similar entities. credits are not taken into account above for the respective partners, enter
y SC- Enter this code if the partner is an S corporation. the amount disallowed as a positive number on line 15G and enter the
amount permitted beyond previously allowed as a negative number on
Special Note. If an electing partnership has a trust as a partner and that Line 15G. If multiple credits are allowed or disallowed, enter the total net
trust is a grantor trust, use the classification of the grantor. In addition, if amount on Line 15G. Enter the amount on Line 16G of this schedule on
the partnership or the department determines that a partner is an estate Line 6c of Form IT-65.
or a trust subject to federal income taxation, the partnership cannot
elect to be taxed at the partnership level absent an agreement with the
department on a methodology to compute tax.
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