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2023 NORTH DAKOTA PARTNERSHIP INCOME TAX TAX.ND.GOV INCLUDES SCHEDULE FACT SCHEDULE K SCHEDULE KP SCHEDULE K-1 Email Questions to: individualtax@nd.gov
Enlarge image | 2023 NORTH DAKOTA PARTNERSHIP INCOME TAX TAX.ND.GOV INCLUDES SCHEDULE FACT SCHEDULE K SCHEDULE KP SCHEDULE K-1 Email Questions to: individualtax@nd.gov |
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Contents
Need help?
Where to get help and forms ........................................................ This page You can download forms and find other
Changes for 2023 ................................................................................... 1 information on our website at:
tax.nd.gov
General instructions ................................................................................2
Email
Who must file .....................................................................................2
Individual, estate, trust, partnership,
When and where to file ........................................................................ 2 and S corporation income tax—
Extension of time to file ....................................................................... 2 individualtax@nd.gov
Penalty and interest ............................................................................ 2
Estimated tax payment (for 2024) ........................................................ 3 Call
Withholding from nonresident partners .................................................. 3 Individual income tax—
Composite filing ..................................................................................3 Questions 701-328-1247
Correcting a previously filed return ........................................................ 4 Forms 701-328-1243
Reporting federal changes .................................................................... 4 Partnership income tax—
W-2/1099 reporting requirement .......................................................... 4 Questions 701-328-1258
Forms 701-328-1243
Disclosure notification ......................................................................... 4
Use of information .............................................................................. 4 Speech/hearing impaired
TDD 800-366-6888
General instructions for completing Form 58 .............................................. 4
Specific line instructions ..........................................................................5 Write
Form 58, Page 1, Items A-J ..................................................................5 Office of State Tax Commissioner
Schedule FACT ...................................................................................5 600 E. Boulevard Ave., Dept. 127
Bismarck, ND 58505-0599
Schedule K ........................................................................................6
Schedule KP ..................................................................................... 10 Walk-in or appointment
Form 58, Page 1, Lines 1-12 ............................................................... 12 service
Schedule K-1 .................................................................................... 13 State Capitol Building, 8th Floor
Before you file Form 58 ..................................................................... 14 600 E. Boulevard Ave., Bismarck, ND
Monday through Friday
Required forms 8:00 a.m. to 5:00 p.m.
The following forms are needed to complete Form 58: (except holidays)
Form 58 Partnership return Walk-ins are welcome. To assure
Schedule FACT Calculation of North Dakota apportionment factor availability and promptness of
Schedule K Total North Dakota adjustments, credits, and other service, call in advance to make an
items distributable to partners appointment.
Schedule KP Partner information
Schedule K-1 Partner’s share of North Dakota income (loss), deductions,
adjustments, credits, and other items
The following forms may be needed:
Form 58-PV Partnership return payment voucher
Form 58-EXT Partnership extension payment voucher Privacy Act Notification
In compliance with the Privacy Act of
Form 101 Application for extension of time to file a North Dakota 1974, disclosure of a Federal Employer
income tax return Identification Number (FEIN) or social
Form PWA Passthrough entity withholding adjustment security number on this form is required under
Form PWE Nonresident passthrough entity member exemption and N.D.C.C. §§ 57-01-15 and 57-38-42, and will
be used for tax reporting, identification, and
certification administration of North Dakota tax laws.
Disclosure is mandatory. Failure to provide
Download these forms from our website at tax.nd.gov. the FEIN or social security number may
delay or prevent the processing of this form.
Taxpayer Bill of Rights
Obtain a copy of the North Dakota Taxpayer Bill of Rights on the
Office of State Tax Commissioner’s website at
tax.nd.gov
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Changes affecting partnerships
Developments, updates, and items of interest relating to partnership income tax
REMINDER - Electronic Filing The apprentice must be in an The tax rate was changed from up
Partnerships with 10 or more owners apprenticeship program certified by to 20% to now be 15% of the cost
are required to file the North Dakota the U.S. Department of Labor or be an of the qualifying equipment. The
income tax return and pay any tax electrical apprentice registered under annual maximum statewide tax credits
due on it by electronic means. If a North Dakota law. authorized was increased from $1
partnership return with 10 or more million to $3 million per year. Of the
The credit is equal to 10% of the
owners is filed on paper, the return $3 million annual total tax amount,
stipend or salary paid to the qualified
will not be processed and may be $500,000 of tax credits is reserved
apprentice. The maximum credit a
subject to penalties due to the failure each year for first-time claimants for
taxpayer can claim over all tax years
to file electronically. automation equipment and $500,000
is $3,000 and limits the earning of a
of tax credits is reserved each year
NEW - North Dakota passthrough tax credit to only five apprentices at
for first-time claimants for animal
withholding the same time. Any credit earned in
agriculture equipment.
Income tax rates were lowered excess of the limit may not be carried
effective with the 2023 tax year. The forward or back to other tax years. The program was also made
highest rate was lowered to 2.50%. permanent.Other provisions were
The credit is available to corporations,
The income tax withholding rate on unchanged.
individuals, estates, trusts, and
nonresident owners of passthrough
passthrough entities. A tax credit The changes are applicable for
entities also was lowered and is
earned by a passthrough entity is purchases during calendar year 2023,
reflected on the 2023 income tax
passed through and allowed to each for which applications would be due
forms and instructions.
owner in proportion to their respective to the North Dakota Department of
NEW - Contributions to maternity interests in the passthrough entity. Commerce by January 31, 2024. The
home, child placing agency, or requirement continues to exist for
UPDATE – Renaissance Zone
pregnancy help center a claimant to subsequently file with
tax incentive changes effective
An income tax credit is allowed the Office of State Tax Commissioner
August 1, 2023
for contributions to a child placing a report of Improved Job Quality or
A variety of changes occurred to
agency licensed by the North Dakota Increased Productivity.
the Renaissance Zone program.
Department of Health and Human
One of the changes is the maximum UPDATE - Disabled employment
Services (DHS), a nonprofit maternity
length of an income tax incentive tax credit
home located in North Dakota, or a
was changed from five years to In 2023, the North Dakota Legislature
pregnancy help center recognized by
eight years for a project that meets reenacted and made permanent the
DHS.
certain rehabilitation thresholds. existing income tax credit related to
The credit is equal to 100% of the Specifically, for residential (except the employment of an individual with
contribution. The credit is limited to owner occupied) and commercial developmental disabilities or severe
50% of a taxpayer’s tax liability. Any property, a rehabilitation level mental illness. The existing provisions
credit earned in excess of the limit may exceeding 75% is required to allow of the tax credit were unchanged,
not be carried forward or back to other for an exemption up to eight years. except the statewide limitation on
tax years. Rehabilitation exceeding 50% is the number of eligible employees was
required for an exemption up to five removed and there is no limit.
The credit is available to corporations,
years. For owner occupied residential
individuals, estates, trusts, and Stay informed of developments
property, rehabilitation exceeding
passthrough entities. Individuals, businesses, or other
20% may qualify for an exemption up
interested persons may sign up to
A tax credit earned by a passthrough to eight years.
receive email notifications when
entity is passed through and allowed
For additional RZ information, please a newsletter or other important
to each owner in proportion to their
refer to our website: information is issued by the Office of
respective interests in the passthrough
www.tax.nd.gov/renaissance- State Tax Commissioner. To sign up,
entity.
zone-incentives. go to tax.nd.gov and select “News
NEW – Tax credit for compensation Center” at the top of the page. Then
paid to an apprentice UPDATE – Automation tax credit select “Email Sign-Up”.
An income tax credit was created The 2023 North Dakota Legislature
for the employment of a qualified made changes to the existing
apprentice in an apprenticeship automation tax credit program. The
program position in North Dakota. program was expanded to include
automation or robotic equipment
purchased to upgrade or advance an
animal agricultural process.
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Form 58 Instructions 2023
North Dakota Partnership Income Tax Return
“N.D.C.C.” references are to the North Dakota Century Code, which contains North Dakota’s statutes.
“N.D. Admin. Code” references are to the North Dakota Administrative Code, which contains North Dakota’s rules.
North Dakota extension. If a
General federal extension is not obtained,
REMINDER: Electronic filing
instructions Partnerships with 10 or more owners but additional time is needed to
are required to file the North Dakota complete and file Form 58, a separate
Who must file income tax return and pay any tax North Dakota extension may be
A 2023 Form 58, Partnership Income due on it by electronic means. applied for by filing Form 101,
Tax Return, must be filed by a Application for Extension of Time to
partnership that meets both of the File a North Dakota Tax Return. This
When and where to file
following: The 2023 Form 58 must be filed on is not an automatic extension—there
• It is required to file a 2023 or before (1) April 15, 2024, if filing must be good cause to request a
Form 1065, U.S. Return of for the 2022 calendar year, or (2) the North Dakota extension. Form 101
Partnership Income. 15th day of the fourth month following must be postmarked on or before the
• It carries on business, or derives the end of the tax year, if filing for due date of Form 58. Notification of
gross income from sources, in a fiscal year beginning in the 2023 whether the extension is accepted or
North Dakota during the 2023 tax calendar year. If the due date falls rejected will be provided by the
year. on a Saturday, Sunday, or holiday, Office of State Tax Commissioner.
the return may be filed on or before Extension interest. If Form 58 is
Investment partnership. A the next day that is not a Saturday, filed on or before the extended due
partnership that elects out of the Sunday, or holiday. date, and the total amount of tax due
partnership rules under I.R.C. is paid with the return, no penalty will
§ 761(a)(1) and does not file a federal Note: Use the 2022 Form 58 if filing
partnership return must file a 2023 for a fiscal year beginning in the 2022 be charged. Interest on the tax due will
Form 58 if it carries on investment calendar year. be charged at the rate of 12% per year
from the original due date of the return
activity, or derives any gross income If not required to file to the earlier of the date the return is
from sources, in North Dakota during electronically, mail Form 58 and all filed or the extended due date.
its 2023 tax year. A 2023 Form 1065 required attachments to:
Prepayment of tax due. If an
must be completed on a pro forma Office of State Tax Commissioner extension of time to file Form 58 is
basis and attached to Form 58. 600 East Boulevard Ave., Dept. 127 obtained, any tax expected to be due
Limited liability company (LLC). An Bismarck, ND 58505-0599 may be paid on or before the regular
LLC that is classified as a partnership due date to avoid paying extension
for federal income tax purposes is Extension of time to file interest. For more information,
treated like a partnership for An extension of time to file Form 58 including payment options, obtain the
North Dakota income tax purposes may be obtained in one of the 2023 Form 58-EXT.
and must file Form 58 if it meets the following ways:
above conditions for filing. Alternatively, a check or money
• Obtain a federal extension. order may be sent with a letter
Nonfiler penalty. If a partnership • Separately apply for a containing the following: (1) name of
does not file Form 58 as required, North Dakota extension. partnership, (2) partnership’s FEIN,
a minimum $500 penalty may be (3) partnership’s address and phone
assessed if the failure continues after Federal extension. If an extension number, and (4) statement that the
receiving a 30-day notice to file from of time to file the federal partnership payment is a 2023 Form 58-EXT
the Office of State Tax Commissioner. return is obtained, it is automatically payment.
accepted as an extension of time to
Disaster recovery tax exemptions. file Form 58. If this applies, a separate Penalty and interest
Exemptions from state and local tax North Dakota extension does not have If an extension of time to file
filing and payment obligations are to be applied for, nor does the Form 58 was obtained, the tax
available to out-of-state businesses Office of State Tax Commissioner have due may be paid by the extended
and their employees who are in to be notified that a federal extension due date of the return without
North Dakota on a temporary basis has been obtained prior to filing penalty, but extension interest will
for the sole purpose of repairing Form 58. The extended due date for apply—see “Extension interest” and
or replacing natural gas, electrical, North Dakota purposes is the same as “Prepayment of tax due” on this page.
or telecommunication transmission the federal extended due date.
property that is damaged, or under
threat of damage, from a state- or
presidentially-declared disaster or
emergency. For more information, go
to tax.nd.gov.
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If Form 58 is filed by its due date (or Exemption from withholding. No distributive share of North Dakota
extended due date), but the total withholding is required if any of the income and pays the tax with
amount of tax due is not paid by the following apply: Form 58. The tax is calculated at
due date (or extended due date), a the highest individual income tax
• The distributive share of
penalty equal to 5% of the unpaid tax rate (which is 2.50% for the 2023
North Dakota income is less
or $5.00, whichever is greater, must tax year), and no adjustments,
than $1,000.
be paid. deductions, or tax credits are allowed
• The nonresident partner elects to in calculating the tax. A composite
If Form 58 is filed after its due date include the distributive share in a filing satisfies the North Dakota
(or extended due date), and there composite filing—see “Composite income tax filing and payment
is an unpaid tax due on it, a penalty filing” on this page. obligations of the eligible nonresident
equal to 5% of the unpaid tax due or
• The nonresident partner is a partners included in it, which means
$5.00, whichever is greater, for the
passthrough entity and elects they do not have to separately file
month the return was due plus 5% of
exemption from withholding on its their own North Dakota income tax
the unpaid tax due for each additional
distributive share of North Dakota returns. The composite filing method
month (or fraction of a month) during
income. For more information, is optional and does not require prior
which the return remains delinquent
obtain Form PWE. approval from the Office of State Tax
must be paid. This penalty may not
Commissioner, and a choice to use it
exceed 25% of the tax due. Withholding procedure. This may be made on a year-to-year basis.
In addition to any penalty, interest withholding requirement applies to
a nonresident partner’s year-end Eligible nonresident partner. For
must be paid at the rate of 1% per
distributive share of North Dakota purposes of this composite filing
month or fraction of a month, except
income, which is determined at the method, a nonresident partner
for the month in which the tax was
end of the partnership’s tax year and has the same meaning as that
due, on any tax due that remains
reported on Form 58, Schedule KP, used for withholding income tax
unpaid after the return’s due date (or
Column 6. The requirement does from nonresident partners—see
extended due date).
not apply to actual distributions “Withholding from nonresident
Estimated tax payment made to a nonresident partner partners” on this page. A nonresident
(for 2024) during the tax year. The withholding partner is eligible to be included in a
A partnership may, but is not required amount is calculated and reported composite filing if both of the following
to, make estimated income tax on Schedule KP, Column 7. If a apply:
payments. For more information, nonresident partner meets certain
• The nonresident partner’s
including payment options, obtain the conditions, an amount less than the
only source of income within
2024 Form 58-ES. amount calculated at the 2.50%
North Dakota is one or more
tax rate may be withheld. For the
passthrough entities. A
Withholding from qualifying conditions, see Form PWA.
passthrough entity includes a trust,
nonresident partners A partnership must submit a payment
partnership, S corporation, LLC
A partnership must withhold for the total amount of withholding
treated like a partnership or
North Dakota income tax at the rate of reported on Schedule KP, Column 7,
S corporation, and any other
2.50% from the year-end distributive with Form 58 when it is filed.
similar entity.
share of North Dakota income of a Publicly traded partnership. • The nonresident partner elects
nonresident partner. See “Publicly A publicly traded partnership, as to be included in a composite
traded partnership” on this page for defined under Internal Revenue Code filing. An election is indicated by
an exception to this requirement. § 7704(b), does not have to withhold the partnership’s calculation and
Nonresident partner. For purposes North Dakota income tax from its reporting of a tax amount for the
of this withholding requirement, a unitholders if it meets both of the nonresident partner on Form 58,
nonresident partner means: following: Schedule KP, Column 8. (If the
• an individual who is not domiciled • It is treated as a partnership for distributive share is a loss, the tax
in North Dakota; federal income tax purposes. is zero.)
• a trust, including a grantor trust, • It reports on Form 58, The distributive share of North Dakota
that is not organized under Schedule KP, every unitholder with income included in a composite return
North Dakota law. This only a North Dakota distributive share is subject to tax even if it is under
includes trusts that are subject to of income of over $500. $1,000.
income tax; or Composite filing method
• a passthrough entity that has a Composite filing procedure. The tax under the
commercial domicile outside North A composite filing method is available composite filing method is calculated
Dakota. A passthrough entity to a partnership with one or more and reported on Form 58, Schedule KP,
includes a partnership, eligible nonresident partners. Under Column 8. A partnership must submit
S corporation, LLC treated like a this method, a partnership calculates a payment for the total tax reported on
partnership or S corporation, and the North Dakota income tax on an Schedule KP, Column 8, with Form 58
any other similar entity. eligible nonresident partner’s year-end when it is filed.
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Correcting a previously filed 7. Attach a statement explaining the Use of information
return reason(s) for filing the amended All of the information on Form 58 and
If a partnership needs to correct an return. If it is because of changes its attachments is confidential by law
error on Form 58 after it is filed, the the partnership or the IRS made and cannot be given to others except
partnership must file an amended to the partnership’s 2023 Federal as provided by state law. Information
return. There is no special form for Form 1065, attach a copy of the about the partners is required under
this purpose. See “How to prepare an amended federal return or IRS state law so the Office of State
amended 2023 return” below. notice. Tax Commissioner can determine
8. Complete and provide a corrected the partner’s correct North Dakota
If a partnership paid too much tax Schedule K-1 (Form 58) to the taxable income and verify if the
because of an error on its 2023 partners, as required. partner has filed a return and paid the
Form 58, the partnership generally tax.
has three years from the due date of
the return (excluding extensions) or Reporting federal changes
the date the return was actually filed, If the Internal Revenue Service General instructions
whichever is later, in which to file an (IRS) changes or audits the federal for completing
amended return to claim a refund of partnership return, or if a partnership
the overpayment. See N.D.C.C. files an amended federal partnership Form 58
§ 57-38-40 for other time periods that return, an amended North Dakota
may apply. Form 58 must be filed within 90 days Complete Federal
How to prepare an amended 2023 after the final determination of the Form 1065 as follows:
return IRS changes or the filing of the 1. Complete Federal Form 1065 (or
amended federal return. Enclose a 1065-B) in its entirety.
1. Obtain a blank 2023 Form 58. copy of the IRS audit report or the
2. Enter the partnership’s name, amended federal partnership return 2. Complete Items A through J at
current address, FEIN, etc., in the with the amended North Dakota the top of page 1 of
top portion of page 1 of Form 58. Form 58. Form 58—see page 5.
3. Complete Schedule FACT on
3. Fill in the “Amended return” circle
at the top of page 1 of Form 58. W-2/1099 reporting page 2 of Form 58—see page 5.
4. Complete Schedules FACT, requirement 4. Complete Schedule K on page 3
K, and KP using the corrected Every partnership doing business in of Form 58—see page 7.
information. However, unless North Dakota that is required to file 5. Complete Schedule KP on
there is an increase in the Federal Form 1099 or W-2 must also page 5 of Form 58—see page 10.
amount reported on Schedule KP, file one with the Office of State Tax 6. Complete lines 1 through 12 on
Column 6, of the amended return, Commissioner. For more information, page 1 of Form 58—see page 12.
enter on Schedule KP, Column 7, obtain the guideline Income Tax
the same amount reported on Withholding and see “Annual Filing 7. Complete Schedule K-1, if
the previously filed return. Then Requirements - W-2 and 1099.” required, for the partners—see
page 13.
complete lines 1 through 3 on
page 1 of Form 58. Disclosure notification Rounding of numbers. Numbers
5. On line 5 of one of Form 58, Upon written request from the may be entered on the return in
enter the total taxes due from the chairman of a North Dakota legislative dollars and cents, or they may be
previously filed 2023 Form 58, standing committee or Legislative rounded to the nearest whole dollar. If
page 1, line 3. Management, the law requires the rounding, drop the cents if less than
Office of State Tax Commissioner to $0.50 and round up to the next whole
6. Complete line 7 (overpayment) disclose the amount of any deduction dollar amount if $0.50 or higher. For
or line 10 (tax due), whichever or credit claimed on a tax return. example, $25.36 becomes $25.00,
applies. If there is an Any other confidential information, and $25.50 becomes $26.00.
overpayment on line 7, enter the such as a taxpayer’s name or federal
full amount on line 9 (refund). On employer identification number, may Fiscal year filers. The tax year for
an amended return, the amount not be disclosed. North Dakota income tax purposes
credited to the next year’s must be the same as the tax
estimated tax (line 8) may not be year used for federal income tax
increased or decreased. purposes. Use the 2022 Form 58 if
the partnership’s taxable year began
in the 2022 calendar year. Note: Use
the 2021 Form 58 if the taxable year
began in the 2021 calendar year.
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Farming/ranching partnership. Item J
Specific line Fill in circle if this is an LLC that is Tiered partnership
instructions for registered as a farming and ranching Indicate whether the partnership
LLC with the North Dakota Secretary holds an interest in one or more
page 1 of of State. other partnerships or limited liability
companies. If it does, attach a
Form 58, Items A-J Filed by an LLC. Fill in circle if the
statement to Form 58 showing
entity filing this return is an LLC.
Complete Items A through J at the name and federal employer
the top of page 1 of Form 58. Composite return. Fill in this circle identification number of each
Then complete Schedule FACT, only if (1) the partnership has one or partnership or LLC in which it holds an
Schedule K, and Schedule KP more nonresident partners eligible to interest.
before completing lines 1 be included in a composite filing and
through 12 on page 1 of Form 58. (2) all of them elected to include their Instructions for
distributive shares of North Dakota
Item A - Tax year source income in a composite filing. Schedule FACT
The same tax year used for federal See “Composite filing” on page 3 for (Form 58, page 2)
income tax purposes (as indicated on more information.
the federal partnership return) must General instructions
be used for North Dakota income Amended return. Fill in circle if
All partnerships must complete the
tax purposes. Fill in the applicable this return is being filed to correct a
applicable portions of Schedule FACT.
circle. If the partnership uses a fiscal previously filed 2023 Form 58. See
year, enter the beginning and ending “Correcting a previously filed return” If the partnership has ONLY individual,
dates of the fiscal year. Use the 2023 on page 3 for more information. estate, and trust partners, complete
Schedule FACT as follows:
Form 58 only if the partnership’s tax Extension. Fill in circle if a federal
year began in the 2023 calendar year. or state extension of time to file the • 100% North Dakota
Item B - Name and address return was obtained. See “Extension partnership
Enter the legal name of the partnership of time to file” on page 2 for more If the partnership conducted all of
on the first line of the name and information. its business within North Dakota
during the tax year, skip lines 1
address area. If the partnership Item G - Number of partners
through 13 and enter “1.000000”
publicly operates under a fictitious or Enter the total number of partners
on line 14.
assumed name (which, in most states, and the number of each type of
must be recorded or registered with partner. • Multistate partnership
the state), enter that name on the If the partnership conducted its
second line of the name and address Item H - Professional service trade or business both within
area. If filing an amended return, enter partnership and without North Dakota during
the most current address. Indicate whether the partnership is the tax year, complete lines
a professional service partnership. 1 through 14. However, if all
Item C - Federal EIN A “professional service partnership” of the partners consist of only
North Dakota uses the federal is a partnership that engages in the North Dakota resident individuals,
employer identification number practice of law, accounting, medicine, estates, and trusts, skip lines 1
(FEIN) for identification purposes. or any other profession in which the through 13 and enter “1.000000”
Enter the FEIN from page 1 of Federal capital or the services of employees on line 14.
Form 1065. are not a material income-producing
Item D - Business code number factor. The services performed by If the partnership has a partner
Enter the business code number from the partners themselves must be the OTHER THAN an individual, estate,
the NAICS code list found on the primary income-producing factor. A or trust, complete lines 1 through 14
Office of State Tax Commissioner’s professional service partnership does of Schedule FACT.
website at tax.nd.gov. Enter the not include one that primarily engages
code that most closely describes the in wholesale or retail sales activity, Apportionment factor in
industry in which the partnership manufacturing activity, or any other general
derives most of its income. type of activity in which the capital In general, the apportionment factor
or the services of employees are a is a product of a formula consisting of
Item E - Date business started material income-producing factor. an equally-weighted average of three
Enter the date the business started factors: property, payroll, and sales.
from page 1 of Federal Form 1065. Item I - Publicly traded Each factor represents the percentage
partnership of the partnership’s North Dakota
Item F - Indicators Indicate whether the partnership is a activity compared to its total
Fill in applicable circles, as follows: publicly traded partnership. A “publicly activity everywhere. A partnership
Initial return. Fill in circle if this is traded partnership” is a partnership in multiplies its business income by the
the first return filed in North Dakota which interests in it are either traded apportionment factor to determine
by the partnership. on an established securities market the portion of its business income
or are readily tradable on a secondary attributable to North Dakota.
Final return. Fill in circle if this is the market.
last return to be filed in North Dakota
by this partnership.
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If the partnership includes the Payroll factor Line 10
distributable share of income North Dakota sales
Line 8
from another partnership in its For sales of tangible property, the
Enter the amount of total
apportionable business income, include sale is assigned to North Dakota if the
compensation paid to employees
in the numerator and denominator destination of the property is in
for the tax year. This includes gross
of each factor the partnership’s North Dakota, regardless of the
wages, salaries, commissions, and
proportionate share of the other shipping terms. For sales of other
any other form of remuneration paid
partnership’s apportionment factors— than tangible property, the sale
to the employees. Use the amount
see the specific line instructions for is assigned to North Dakota if the
before deductions for deferred
more information. Do not include in income-producing activity which gave
compensation, flexible spending plans,
the factors any property, payroll, or rise to the receipt is performed in
and other payroll deductions. Do not
sales related to allocable nonbusiness North Dakota. Include on this line
include amounts paid for employee
income—see the instructions to the partnership’s share of the North
benefit plans that are not considered
Form 58, Schedule K, line 24, for what Dakota sales from a North Dakota
taxable wages to the employee. An
constitutes allocable nonbusiness Schedule K-1 (Form 58), Part 6. For
employee is an individual treated as
income. more complete information, see N.D.
an employee under the usual common
Admin. Code §§ 81-03-09-26 through
If the amount of any factor’s law rules, which generally mirror an
81-03-09-31 and 81-03-09-34.
denominator is zero, exclude that individual’s status for purposes of
factor from the calculation. unemployment compensation and the Line 11
Federal Insurance Contribution Act. Throwback sales
Special apportionment rules
Do not include on this line guaranteed Enter the amount of sales shipped
may apply in the case of certain
payments to partners. from a location in North Dakota that
industries or unique circumstances.
are delivered to the U.S. government
For additional information on the Compensation of an employee’s
or to another state or country
apportionment factor, see N.D.C.C. services performed entirely within
where the sales are not subject to
Ch. 57-38.1 and N.D. Admin. Code North Dakota is assigned to
a tax measured by income in that
Ch. 81-03-09. North Dakota. For an employee whose
jurisdiction. For more complete
services are performed in more than
information, see N.D. Admin. Code
Specific line instructions one state, compensation is generally
§§ 81-03-09-29 and 81-03-09-30.
assigned to North Dakota based on
Property factor
the amount of compensation reported Line 14
Lines 1 through 6 to North Dakota for unemployment Apportionment factor
Owned and rented property compensation purposes. Whether Divide line 13 by the number of
Enter on the applicable line the or not state income tax was factors having an amount greater than
average value of real and tangible withheld from an employee’s zero in column 1 on lines 7, 8, and 12.
personal property owned and rented compensation does not affect where Enter the result on this line.
by the partnership. For owned the compensation is assigned for
property, this generally means the apportionment factor purposes.
average of the original cost (before Include on this line in the applicable Instructions for
depreciation) used for federal income column the partnership’s share of the
tax purposes. For rented property, payroll factor from a North Dakota Schedule K
this generally means the amount of Schedule K-1 (Form 58), Part 6. For (Form 58, page 3)
rent paid multiplied by eight. Certain more complete information on All partnerships must complete
property items are subject to special the payroll factor, see N.D. Admin. Schedule K. The purpose of this
rules. Do not include amounts related Code §§ 81-03-09-22 through schedule is to show the total amount
to construction in progress. Include on 81-03-09-25. of North Dakota adjustments, credits,
line 5 the partnership’s share of the and other items distributable to
Sales Factor
property factor from a North Dakota its partners. These items may be
Schedule K-1 (Form 58), Part 6. Line 9 applicable to the preparation of the
Everywhere sales
The average value of owned and partners’ North Dakota income tax
Enter the partnership’s total
rented property is assigned to North returns.
sales or receipts, less returns or
Dakota if the property is located Schedule K-1 from another
allowances, for the tax year. Sales
in North Dakota. The amount passthrough entity.
generally means all gross receipts
attributable to mobile property is Include on the applicable lines
of a partnership. However, the types
generally assignable to North Dakota of Schedule K any adjustments,
of sales or gross receipts included
based on a ratio of the property’s credits, etc., from a North Dakota
in the sales factor depend on the
time spent in North Dakota. For more Schedule K-1, as instructed in the
nature of the partnership’s regular
complete information on the property partner or beneficiary instructions to
business activities and may include
factor, see N.D. Admin. Code that form.
amounts other than sales reported
§§ 81-03-09-15 through 81-03-09-21
on Form 1065, line 1. Include on this
and 81-03-09-33. Reminder: Be sure to attach to
line the partnership’s share of the Form 58 any prescribed schedule or
everywhere sales from a North Dakota other supporting document specified
Schedule K-1 (Form 58), Part 6. in the instructions.
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Property tax clearance federal statute. Include the portion of Line 8
North Dakota Century Code dividend income from a mutual fund Seed capital investment tax credit
§ 57-01-15.1 provides that, before attributable to the fund’s investment If the partnership invested in a
certain state tax incentives may be in the same kinds of securities. qualified business for purposes of the
claimed, a taxpayer must obtain a seed capital investment tax credit,
Do not enter on this line interest
property tax clearance record from multiply the total amount invested
income from securities of the Federal
each North Dakota county in which during the 2023 tax year by 45%
Home Loan Mortgage Corporation
the taxpayer holds a 50% or more and enter the result on this line.
(Freddie Mac), Federal National
ownership interest in real property. See N.D.C.C. Ch. 57-38.5. Attach a
Mortgage Association (Fannie Mae),
The property tax clearance record(s) copy of the Qualified Seed Capital
Government National Mortgage
must be attached to the North Dakota Business Investment Reporting
Association (Ginnie Mae), or from
tax return on which the incentive is Form. Or, if claiming a seed capital
a federal income tax refund or
claimed. Certain tax incentives on investment credit from a
repurchase agreement. Attach a
Form 58, Schedule K, are subject North Dakota Schedule K-1,
statement identifying the specific
to this requirement. The incentives attach a statement identifying the
securities from which the interest
subject to this requirement are qualified business in which the
was derived.
identified in the box at the top of investment was made.
Schedule K. Line 4
Line 9
Renaissance zone exemption
If the partnership is claiming any Ag commodity investment tax
Enter on this line the amount from
of the specified incentives, it must credit
Schedule RZ, Part 7, line 1c. Attach
complete the property tax clearance If the partnership invested in a
Schedule RZ.
section at the top of Schedule K. If qualified business for purposes of the
the partnership is required to attach Line 5 agricultural commodity processing
a property tax clearance record, New or expanding business facility investment tax credit, multiply
obtain one by completing the form income exemption the total amount invested during the
Property Tax Clearance Record, which If the partnership qualified for the 2023 tax year by 30% and enter the
is available on the Office of State Tax new or expanding business income result on this line. The partnership
Commissioner’s website. exemption under N.D.C.C. is allowed no more than $250,000
Ch. 40-57.1, enter the exempt in total credits for investments
Line 1
portion of the partnership’s business made in tax years 2005 and after.
Income from state, local, and
income. See N.D. Admin. Code See N.D.C.C. Ch. 57-38.6. Attach
foreign securities and bonds
§ 81-03-01.1-06 for guidance on a copy of the Ag Commodity
Enter on this line interest and
calculating the amount of the exempt Processing Facility Investment
dividend income from state, local,
income. Attach a statement Reporting Form. Or, if claiming an
and foreign securities and bonds that
showing the calculation of the agricultural commodity processing
is exempt from federal income tax.
exempt income. facility investment credit from a
Do not include interest income from
North Dakota Schedule K-1, attach
securities or bonds issued by Line 6
a statement identifying the facility
North Dakota or its political Eminent domain gain
in which the investment was
subdivisions. Do not enter on this Enter on this line the taxable portion
made.
line any income that is treated of a gain from the disposition of
as nonbusiness income subject property due to the exercise of Line 10
to allocation under N.D.C.C. eminent domain. Biodiesel or green diesel fuel
§§ 57-38.1-04 through 57-38.1-08. blending tax credit
Line 7a
Include the nonbusiness income on If the partnership is a licensed
Renaissance zone historic
Schedule K, line 24. supplier of biodiesel or green diesel
property preservation tax credit
fuel, it is allowed a credit equal to
Line 2 Enter on this line the amount from
$0.05 per gallon for blending biodiesel
State and local income taxes Schedule RZ, Part 7, line 4. Attach
or green diesel fuel having at least
Enter on this line the taxes measured Schedule RZ.
a 5% blend (“B5”) that meets ASTM
by income that were incurred by
Line 7b specifications. The blending must
the partnership and deducted in
Renaissance fund organization be done in North Dakota. For this
calculating the partnership’s ordinary
investment tax credit purpose, a “supplier” means a person
income (loss). Include franchise or
Enter on this line the amount from who distributes the biodiesel or green
privilege taxes measured by income
Schedule RZ, Part 7, line 5. Attach diesel fuel from a terminal in
paid to any taxing authority, including
Schedule RZ. North Dakota. Enter the credit on this
a foreign country.
line. See N.D.C.C. § 57-38-01.22.
Line 7c
Line 3 Attach a statement showing the
Renaissance zone nonparticipating
Interest from U.S. obligations calculation of the credit.
property owner tax credit
Enter on this line interest income from
Enter on this line the amount from
U.S. obligations and from securities
Schedule RZ, Part 7, line 6. Attach
the interest from which is specifically
Schedule RZ.
exempted from state income tax by
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Line 11 Line 14 in North Dakota. A separate credit
Biodiesel or green diesel fuel sales Endowment fund tax credit is allowed for each of the three
equipment tax credit A tax credit is allowed for making a categories of school—primary school,
If the partnership is a licensed seller contribution to a qualified endowment high school, and college. For each
of biodiesel or green diesel fuel, it is fund. For more information, category of school, the credit equals
allowed a credit equal to 10% of the see Schedule QEC (for filers of 50% of the contributions made to all
costs to adapt or add equipment to Forms 38, 40, 58, and 60) Attach eligible schools within the category.
its North Dakota facility to enable it Schedule QEC. (Note: For a partner other than
to sell diesel fuel having at least a another passthrough entity, additional
Lines 14a and 14b. Enter on these
2% biodiesel or green diesel blend limitations on the allowable credit
lines the applicable amounts from
(“B2”) that meets ASTM specifications. apply at the partner level.) A list of
Schedule QEC.
For this purpose, a “seller” means a the eligible schools within each of
person who acquires the fuel from Lines 14c and 14d. Enter on the three categories of schools is
a wholesale supplier or distributor these lines an endowment fund provided on page 14.
for resale to a consumer at a retail credit and the related contribution
Election. A partnership may elect, on
location. Except for costs incurred amount shown on a North Dakota
a contribution by contribution basis,
before January 1, 2005, include Schedule K-1 received from an estate,
to treat a contribution as having been
eligible costs incurred before the tax trust, partnership, or S corporation.
made during the 2023 tax year if it
year in which sales of the eligible
is made on or before the due date,
biodiesel or green diesel fuel begin. Line 15
including extensions, for filing the
The credit is allowed in each of five Workforce recruitment tax credit
2023 Form 58. Make the election by
tax years, starting with the tax year If the partnership employs
attaching to the return a document
in which sales of the eligible biodiesel extraordinary recruitment methods
containing the following:
or green diesel fuel begin. Enter to hire an employee to fill a hard-
the credit on this line. See N.D.C.C. to-fill position in North Dakota, it is 1. A statement that the election is
§ 57-38-01.23. Attach a statement allowed a tax credit equal to 5% of being made.
showing the calculation of the the compensation paid during the 2. Name of qualifying school.
credit. first 12 months to the employee
3. Date of contribution.
hired to fill that position. The credit
Line 12 4. Amount of contribution.
may be claimed in the first taxable
Employer internship program tax
year beginning after the employee
credit To qualify, a contribution must be
completes the first 12 consecutive
If the partnership hired an eligible made directly to, or specifically
months of employment. For details,
college student under a qualifying designated for the exclusive use of, a
see N.D.C.C. § 57-38-01.25.
internship program set up in qualifying school.
North Dakota, it is allowed a credit Line 15a. Enter the allowable credit School network or organization.
equal to 10% of the compensation on this line. If a contribution is made payable
paid to the intern. For details,
see N.D.C.C. § 57-38-01.24. The Line 15b. Enter the number of to the account or fund of a school
partnership is allowed no more than eligible employees whose first 12 network or organization that governs
$3,000 of credits for all tax years. months of employment ended during or benefits multiple schools, the
the partnership’s 2022 tax year. contribution will qualify only if the
Line 12a. Enter the allowable credit partnership specifically designates it
on this line. Line 15c. Enter the total for the use of a qualifying school, and
compensation paid to the eligible the network or organization separately
Line 12b. Enter the number of employees’ during their first 12 accounts for the funds on behalf of
eligible interns employed during the consecutive months of employment that school. The partnership must
2023 tax year. Disregard this line ending in the partnership’s 2022 tax obtain a statement from the network
if the credit is from a passthrough year. or organization that identifies the
entity. qualifying school and the amount
Line 16
Line 12c. Enter on this line the contributed to it. If the qualifying
Credit for wages paid to a
total compensation paid to eligible school falls into both the primary and
mobilized employee
interns during the 2023 tax year (as high school categories, also see the
Enter on this line the amount from
shown on their 2023 Form W-2s). next paragraph.
Schedule ME, line 13. N.D.C.C.
Disregard this line if the credit is from Schools in both primary and high
§ 57-38-31. Attach Schedule ME.
a passthrough entity. school categories. If a contribution
Line 13 Lines 17 through 19 is made to a qualifying school that
Research expense tax credit Nonprofit private school tax provides education in one or more
A credit is allowed for conducting credits grades in both the primary school
qualified research in North Dakota. For Tax credits are allowed under category (kindergarten through 8th
details, see N.D.C.C. § 57-38-30.5. N.D.C.C. § 57-38-01.7 for making grades) and the high school category
Enter the allowable credit on this line. charitable contributions to qualifying (9th through 12th grades), a separate
Attach a statement showing the nonprofit private primary schools, credit is allowed for the portion of the
computation of the base amount high schools, and colleges located contribution designated for use within
and the credit.
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9
each school category. The partnership A partnership is not allowed to The credit is available to corporations,
must obtain a statement from the claim an angel investor credit from individuals, estates, trusts, and
qualifying school or the school another passthrough entity. See passthrough entities. A tax credit
network or organization that identifies N.D.C.C. § 57-38-01.26 (effective earned by a passthrough entity is
the qualifying school and shows for investments made after June 30, passed through and allowed to each
the amount contributed within each 2017). owner in proportion to their respective
category of school. If the partnership interests in the passthrough entity.
Attach a copy of the Participating
does not obtain a statement, one- Unused credit: There is no carryover
Angel Investor Investment
half of the total contribution will be provision to succeeding tax years.
Statement.
deemed to have been made to each
category of school. Line 21 Line 24
Automation tax credit Apprentice tax credit
Line 17. Enter on this line the A tax credit is available for
If the partnership qualified for the
allowable credit for contributions to compensation paid by a partnership
automation tax credit under N.D.C.C.
qualified nonprofit private primary to an apprentice. The credit equals
§ 57-38-01.41, enter on this line the
schools. 10% of the stipend or salary paid to
amount of the credit shown on the
Line 18. Enter on this line the credit approval letter issued to the a qualified apprentice employed in
allowable credit for contributions partnership by the Office of State Tax North Dakota. The apprentice must be
to qualified nonprofit private high Commissioner. in an apprenticeship program certified
schools. by the U.S. Department of Labor or
Line 22 be an electrical apprentice registered
Line 19. Enter on this line the Credit for hiring an individual under North Dakota law. The credit
allowable credit for contributions to with a developmental disability or is allowed for up to five apprentices
qualified nonprofit private colleges. mental illness employed by the partnership at the
A tax credit is available for employing
Line 20 same time.
an individual with a developmental
Angel investor investment credit Lifetime credit limit: A taxpayer is
disability or mental illness. To
Important! This line is only for qualify, an employer must apply for allowed no more than $3,000 in total
credits attributable to investments and obtain certification from the tax credits for eligible wages paid in
made in qualified businesses North Dakota Department of Human all tax years.
by angel funds organized and Services, Vocational Rehabilitation Line 24a.
certified on or after July 1, 2017. Division, that the individual has a Enter the allowable credit on this line.
severe disability, is eligible for the
If a partnership is a member of a agency’s services, and requires Line 24b.
North Dakota angel fund that is customized or supported employment Enter the number of eligible
organized and certified on or after to become employed. The credit is apprentices employed during the 2023
July 1, 2017, a credit is allowed to equal to 25% of the wages paid to the tax year. Disregard this line if the
the partnership if it participates in individual during the tax year, up to a credit is from a passthrough entity.
a qualified investment made by the maximum credit of $1,500 per year.
Line 24c.
angel fund in a qualified business. The credit is allowed for each eligible
Enter the total amount of wages,
The angel fund is required to provide individual hired. Attach a copy
salaries, or other compensation paid
a Participating Angel Investor of the certification letter from
to eligible apprentices employed
Statement to the partnership, Human Services.
which evidences the partnership’s during the 2023 tax year (as shown
investment. For qualified investments Line 23 on their 2023 Form W-2’s). Disregard
made after June 30, 2017, that fall Maternity home, child placing this line if the credit is from a
into the partnership’s 2023 tax year, agency, or pregnancy help center passthrough entity.
multiply the investment amount tax credit
Line 25
by the applicable credit rate shown A tax credit is allowed for
Professional service partnership
on the statement. If a partnership contributions to the following
guaranteed payments
participates in more than one qualified organizations: (1) a child placing
Lines 25a through 25c apply only
investment during the tax year, agency licensed by the North Dakota
if the partnership marked “Yes” to
calculate the credit separately for each Department of Health and Human
Item H on page 1 of Form 58. See
Participating Angel Investor Statement Services (DHS), (2) a nonprofit
the instructions to Form 58, page 1,
received and add the separately maternity home located in North
Item H, on page 5.
calculated amounts. Dakota, or (3) a pregnancy help
center recognized by DHS. Line 25a. Enter the total guaranteed
Enter the credit amount on this payments from Federal Form 1065,
line. Do not enter on this line The credit is equal to 100% of the
Schedule K, line 4.
an angel investor credit from contribution and is limited to 50% of
a North Dakota Schedule K-1. a taxpayer’s tax liability. Enter on this
line the amount from Schedule MCP,
line 8. Attach Schedule MCP.
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Line 25b. Enter the portion of the for more information. In addition to
amount on line 25a that was made to completing lines 26a and 26b, the Instructions for
individual partners as a reasonable partnership must attach the following Schedule KP
salary for personal services, to Form 58:
regardless of where the services (Form 58, page 5)
• A statement on which each item
were performed. Do not include any Schedule KP must be completed
of nonbusiness income is shown
guaranteed payments for other than to provide information about each
along with its related expenses.
personal services. partner. If the partnership has more
• A statement explaining the basis than seven partners, complete and
Line 25c. Enter the portion of the for treating the item of income attach additional schedules as needed
amount on line 25b that was made as nonbusiness income subject to to list all partners. If more than one
to nonresident individual partners for allocation. Schedule KP is needed, complete
personal services performed within lines 1 through 4 on only one of them,
• If an item of nonbusiness income
North Dakota. and include the combined amount
is allocated to a state other than
Line 26 North Dakota, a copy of that other for all of the schedules on that one
Allocable nonbusiness income state’s income tax return must schedule.
Lines 26a and 26b apply only if the be attached. If the partnership is
partnership meets all of the following: not required to file an income tax All partners
return with the other state, the (Columns 1 through 5)
• It is a multistate partnership, i.e., partnership must indicate this in Columns 1 and 2
it carries on its trade or business
the attached statement.
activity both within and without Enter the name, mailing address, and
North Dakota. Line 26a. Enter the total allocable partner’s identifying number as shown
• It has one or more nonresident income (less related expenses) on the partner’s Federal Schedule K-1.
individual, estate, or trust from all sources within and without If the partner is a single member
partners. North Dakota. LLC that is a disregarded entity for
federal income tax purposes, enter
• It has allocable nonbusiness Line 26b. Enter the portion of the the owner’s name, address, and
income. Generally, all income amount on line 24a that is allocable to identifying number.
received by a partnership is North Dakota.
considered business income unless Column 3
Line 27
clearly classifiable as nonbusiness Identify the entity type of the partner
Disposition of I.R.C. Section 179
income. The classification of by entering the applicable code letter
property
income by the labels used to as follows:
Lines 27a through 27b apply only if
describe it—for example, interest, Entity type Code letter
the partnership sold, exchanged, or
dividends, rents, royalties,
disposed of property for which an
operating income, or nonoperating Individual ..................... I
I.R.C. Section 179 deduction was
income—is generally not relevant C corporation ................ C
passed through to the partners.
in determining whether income is S corporation ................ S
Note: The partnership is required
business or nonbusiness income. Partnership ................... P
to report this same information on
For more information, see N.D. Estate .......................... E
a separate statement attached to
Admin. Code § 81-03-09-03. Trust ............................ T
Federal Form 1065, Schedule K, Exempt organization ...... O
Nonbusiness income is not line 20c.
apportioned using the apportionment Note: A “C corporation” is a
For lines 27a through 27d, multiply
factor (from Schedule FACT) but is corporation that files Federal
the corresponding combined amount
allocated within or without North Form 1120; an “S corporation”
for all partners as reported on
Dakota as provided under N.D.C.C. is a corporation that files Federal
Federal Form 1065, Schedule K,
§§ 57-38.1-04 through 57-38.1-08 Form 1120S; and the “Trust” entity
line 20c, by the apportionment factor
and N.D. Admin. Code type applies to a trust that files
from Schedule FACT, line 14, and
§ 81-03-09-09. Expenses must be Federal Form 1041 or, in lieu of
enter the result. However, if the
attributed to the nonbusiness income filing Federal Form 1041, elects an
property disposed of is treated as a
in a manner which fairly distributes alternative reporting method under
nonbusiness asset the gain or loss
all of the partnership’s expenses to its the federal income tax regulations,
from which is subject to allocation
business and nonbusiness income. and to an IRA (generally filing Federal
under N.D.C.C. §§ 57-38.1-04 through Form 990-T to report Unrelated
If the partnership has an item of 57-38.1-08, subtract the amounts Business Taxable Income.)
nonbusiness income subject to for that asset before multiplying by
allocation, the partnership must take the apportionment factor. Include the
this into account when calculating nonbusiness gain or loss from the
the North Dakota distributive share disposition on Form 58, Schedule K,
of income or loss reportable on line 26.
Schedule KP and Schedule K-1
(Form 58). See the instructions to
Schedule KP, Column 6, on page 10
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If the partner is an LLC that is a
disregarded entity for federal income Worksheet for Schedule KP, Column 6
tax purposes or a nominee on Federal For nonresident partners and tax-exempt organization partners only—
Schedule K-1, enter the code letter see instructions to Schedule KP, Column 6.
for the type of entity of the entity’s 1. Partner’s amount from Schedule KP, Column 5 ........................1 _______________
owner. If the LLC is treated like a 2. Professional service partnership only:
C corporation, partnership, or S Guaranteed payments for services only
corporation, enter the code letter for included in the amount on line 1.............. 2 _______________
that particular entity type. 3. Allocable income (less related expenses)
included in the amount on line 1.............. 3 _______________
Column 4 4. Interest from U.S. obligations included
Enter the partner’s ownership in the amount on line 1 .......................... 4 _______________
percentage as provided in the 5. Add lines 2, 3, and 4 ............................................................5 _______________
partnership agreement. (This percentage 6. Apportionable income (loss). Subtract line 5 from line 1 ...........6 _______________
may differ from the partner’s profit or
7. Apportionment factor from Schedule FACT, line 14 ...................7 __.____________
loss percentage.)
8. Multiply line 6 by line 7 ........................................................8 _______________
Column 5 9. Professional service partnership only: Guaranteed payments
Enter the sum of the following for services performed within North Dakota ......................9 _______________
items from the partner’s Federal 10. Allocable income (less related expenses) reportable to
Schedule K-1 (Form 1065), Part III: North Dakota ................................................................... 10 ______________
Box 1 Ordinary business income 11. Add lines 8, 9 and 10. Enter result in Column 6 ...................... 11 ______________
(loss)
Nonresident partners and Exception: Complete the Worksheet
Box 2 Net rental real estate income for Schedule KP, Column 6 on this
(loss) tax-exempt organization
page to calculate the amount to enter
partners only
Box 3 Other net rental income in Column 6 if any of the following
(loss) (Columns 6 through 8) apply:
Box 4c Total guaranteed payments For purposes of Columns 6 through 8, • The partnership is a professional
Box 5 Interest income a nonresident partner means: service partnership that made
Box 6a Ordinary dividends • an individual who is not domiciled guaranteed payments for services
Box 7 Royalties in North Dakota; performed by nonresident
individual partners. These
Box 8 Net short-term capital gain • a trust, including a grantor trust,
payments are not apportioned, but
(loss) that is not organized under
are allocated to the state where
North Dakota law. This only
the services were performed by
Box 9a Net long-term capital gain includes trusts that are subject to
the partner. See the instructions
(loss) income tax; or
to Form 58, page 1, Item H, on
Box 10 Net section 1231 gain (loss) • a passthrough entity that has a page 5 for more information.
Box 11 Other income (loss) commercial domicile outside North
• The partnership has an item of
Box 12 Section 179 deduction Dakota. A passthrough entity
nonbusiness income subject to
Box 13 Other deductions (In the case includes a partnership,
allocation. See the instructions to
of an individual, trust, or S corporation, LLC treated like a
Form 58, Schedule K, line 26, on
estate partner, only include partnership or S corporation, and
page 10 for more information.
deductions that are allowed any other similar entity.
• The amount in Column 5 includes
as a deduction from gross For a tax-exempt organization partner, interest from U.S. obligations.
income in calculating adjusted only report its distributive share of
gross income for federal North Dakota income in Column 6. Column 7
income tax purposes.) Columns 7 and 8 do not apply to a Nonresident partner only
Box 20 Include the gain (loss) tax-exempt organization partner. If a nonresident partner’s distributive
share of North Dakota income
from an I.R.C. Section 179 Column 6 in Column 6 is $1,000 or more,
property disposition. For Nonresident partner and tax- multiply the amount in Column 6 by
purposes of calculating exempt organization partner only 2.50% (.025) and enter the result
the gain or loss, include Complete Column 6 for each in Column 7. However, the following
all of the Section 179 nonresident partner and tax-exempt exceptions apply:
deduction passed through organization partner. Except as
to the partner, regardless of provided below, multiply the • If a nonresident partner gives you
whether or not the partner partner’s amount in Column 5 by a completed Form PWA, enter the
actually deducted all of it. the apportionment factor from amount from line 5 of Form PWA
Schedule FACT, line 14, and enter the in Column 7 and fill in the circle
result in Column 6. under “Form PWA or Form PWE.”
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12
• If a nonresident partner gives Line 5 Interest. Calculate the interest
you a completed Form PWE, leave Estimated tax payments amount as follows:
Column 7 blank and fill in the circle Enter the amount paid with the 2023
• If an extension of time to file
under “Form PWA or Form PWE.” Forms 58-EXT and 58-ES plus any
Form 58 was obtained, extension
• If a nonresident partner elected to overpayment applied from the 2022
interest is calculated at the rate of
be included in a composite filing, Form 58. However, if filing an amended
12% per year on any tax due from
leave Column 7 blank and see the return, do not enter any previously
the due date of the return to the
instructions to Column 8. paid estimated tax amount; instead,
earlier of the extended due date or
enter the amount of the total taxes
the date the return was filed.
See “Withholding from nonresident due from line 3 of the previously filed
partners” on page 3 for more original or amended return. • If the total amount of tax due
information. is not paid by the due date (or
Line 8 extended due date) of the return,
Column 8 Application of overpayment to interest is calculated at the rate
Nonresident partner only 2024 of 1% per month or fraction of a
Note: Leave Column 8 blank if If there is an overpayment on line 7, month on the unpaid tax, except
Column 7 was completed for the the partnership may elect to apply for the month in which the return
nonresident partner. part or all of it as an estimated was due.
Complete Column 8 for each payment toward its 2024 tax liability.
nonresident partner electing to To make the election, enter the Line 12
be included in a composite filing. portion of line 7 to be applied on Balance due
Multiply the amount in Column 6 by line 8. If this election is made, the The balance due must be paid in full
2.50% (.025) and enter the result in election and the amount applied may with the return. The payment may
Column 8. If the amount in Column 6 not be changed after the return is be made electronically in one of the
is zero or less, enter zero in Column 8. filed. If this is an amended return, do following ways:
See “Composite filing” on page 3 for not make an entry on this line. • Online—A payment may be made
more information. Line 10 online with an electronic check or a
Tax due debit or credit card. The electronic
Specific line A tax due must be paid in full with the check option is free. North Dakota
return when the return is filed. See contracts with a national payment
instructions for the instructions to line 12 for payment service to provide the debit or
options. credit card option. There is a fee
page 1 of for the debit or credit option, none
Line 11 of which goes to the State of North
Form 58, lines 1-12 Penalty and interest Dakota. To pay online, go to
Complete Schedule FACT, The Office of State Tax Commissioner www.tax.nd.gov/payment.
Schedule K, and Schedule KP will notify the partnership of any
penalty and interest payable on a tax • Electronic funds transfer—A
before completing lines 1 due shown on Form 58. However, the payment may be made by means
through 12 on page 1 of partnership may calculate the penalty of an Automated Clearing House
Form 58. and interest amounts and include (ACH) credit transaction that
them in the balance due on Form 58. the taxpayer initiates through
Line 4 its banking institution. For more
Income tax withholding Penalty. Calculate the penalty information, go to our website at
Enter the North Dakota income amount as follows: tax.nd.gov.
tax withholding shown on a 2023
Form 1099 or North Dakota • If Form 58 is filed by the due date If paying with a paper check or money
Schedule K-1. Be sure the state (or extended due date), but the order, complete a 2023 Form 58-PV
identified on the Form 1099 is total amount of tax due is not paid payment voucher and enclose it with
North Dakota. Also enter the with the return, the penalty is the payment. Make the check or
North Dakota income tax withholding equal to 5% of the unpaid tax or money order payable to “ND State
shown on a 2022 North Dakota $5.00, whichever is greater. Tax Commissioner,” and write the last
Schedule K-1 if the entity that issued • If Form 58 is filed after its due four digits of the partnership’s FEIN
it has a fiscal tax year ending in date (or extended due date), and and “2023 Form 58” on the check or
the partnership’s 2023 tax year. Do there is an unpaid tax due on it, a money order. A check must be drawn
not enter on this line North Dakota penalty equal to 5% of the unpaid on a U.S. or Canadian bank, be in U.S.
extraction or production taxes tax due (with a $5.00 minimum) dollars, and use a standard nine-digit
withheld from mineral interest income, applies for the month the return routing number. A check drawn on a
such as an oil or gas royalty, because was due, plus 5% of the unpaid foreign bank (except one in Canada)
they are not income taxes. Attach a tax due (with a $5.00 minimum) cannot be accepted.
copy of the Form 1099 or for each month or fraction of a
North Dakota Schedule K-1. month the return remains unfiled,
not to exceed the greater of 25%
of the unpaid tax due or $25.00.
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Amended schedule. If a partnership Lines 3 through 5. Enter on the
Instructions files an amended Form 58, the corresponding lines the partner’s
for completing partnership must issue amended share of each amount shown on
North Dakota Schedule K-1 forms to Form 58, Schedule K, lines 3
Schedule K-1 its partners. Fill in the “Amended” through 5.
A partnership is not subject to circle at the top of the North Dakota
Line 6. Enter on this line the amount
North Dakota income tax. Instead, Schedule K-1 (Form 58).
determined by multiplying the amount
the partners are responsible for Final schedule. Fill in the “Final” on Form 58, Schedule K, line 6, by the
reporting and paying any applicable circle at the top of the North Dakota same percentage used to determine
North Dakota income tax on their Schedule K-1 (Form 58) if it is the last the partner’s distributive share of
shares of the partnership’s income one to be issued by the partnership to income (loss) from the partnership.
reportable to North Dakota. the partner.
Lines 7 through 24 Enter on the
The North Dakota Schedule K-1 Part 2 corresponding lines the partner’s
(Form 58) must be used by a share of each amount shown on
partnership to provide its partners Partner information
Form 58, Schedule K, lines 7 through
with information they will need to Item E 24. Also, for the following lines,
complete a North Dakota income Enter the code letter for the partner additional supporting information
tax return. The information to be from Form 58, Schedule KP, Column 3. must be provided with Schedule K-1:
included in the schedule will depend
on the type of partner. In the case of Item F Lines 8 and 9. Provide a statement
certain credits reported on Schedule If the partner is an individual, estate, identifying the qualified business
K-1 (Form 58), additional supporting or trust, fill in the applicable circle to or qualified agricultural commodity
information must be provided with indicate the legal residency status of processing facility in which the
Schedule K-1 — see the instructions the partner for North Dakota income qualifying investment was made.
to Part 3. tax purposes. If an individual partner
changed his or her legal residency Line 14. Provide a statement
A North Dakota Schedule K-1 (Form to or from North Dakota during the identifying the qualified nonprofit
58) must be completed and given to: tax year, mark the part-year resident organization and the qualified
status. In the case of an estate or trust endowment fund to which the
• Each nonresident partner for qualifying contribution was made.
partner, only the full-year resident or
which the partnership is required
full-year nonresident status will apply.
to report the North Dakota Line 20. Provide a statement
distributive share of income on Item G identifying the angel fund that made
Form 58, Schedule KP, Column 6. For an eligible nonresident partner, the qualified investment in the
• Each partner to which a share of indicate whether the partner is qualified business.
a North Dakota adjustment or tax included in a composite filing by filling Part 4
credit from Form 58, Schedule K, in the applicable circle.
Nonresident individual,
lines 1 through 24, is distributable. Item I estate, or trust partner
• Each partnership or corporation Enter the partner’s ownership only — North Dakota income
partner for the purpose of percentage from Form 58,
reporting a share of the Schedule KP, Column 4. (loss)
apportionment factors from Complete Part 4 for a nonresident
Form 58, Schedule FACT. Part 3 individual, estate, or trust partner.
• Each tax-exempt organization All partners—
Line 25
partner. North Dakota adjustments Partnership’s apportionment
If there are no North Dakota and tax credits factor
If there are any North Dakota
adjustments or tax credits on Form 58, Enter the partnership’s apportionment
adjustments or tax credits on
Schedule K, lines 1 through 24, a factor from Form 58, Schedule FACT,
Form 58, Schedule K, lines 1
North Dakota Schedule K-1 does not line 14.
through 24, complete this part for all
have to be given to a North Dakota Lines 26 through 39
partners.
resident individual, estate, or trust. Income and loss items
Lines 1 and 2. Enter on the
In addition to the North Dakota Except as provided under
corresponding lines the amount
Schedule K-1 (Form 58), the Exceptions 1 through 3 below,
determined by multiplying each
partnership must provide the multiply the corresponding
amount shown on Form 58,
partner with a copy of the Partner’s amount from the partner’s Federal
Schedule K, lines 1 and 2, by the
Instructions for North Dakota Schedule K-1, Part III, boxes 1 through
same percentage used to determine
Schedule K-1 (Form 58). 13, and any I.R.C. § 179 property
the partner’s distributive share of disposition gain (loss) included in box
A copy of all North Dakota income (loss) from the partnership. 20 by the partnership’s apportionment
Schedule K-1 forms must be enclosed factor from Schedule FACT, line 14, and
with Form 58 along with any required enter the result on the corresponding
supporting statements. line of Part 4, lines 26 through 39.
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For “Other deductions” from box 13 If the calculation of any amount on Line 44
of Federal Schedule K-1, only include lines 26 through 39 of Part 4 was Total factors
deductions that are allowed as a affected by the removal or inclusion Enter in the corresponding column the
deduction from gross income in of net nonbusiness income, attach partner’s share of the partnership’s
calculating adjusted gross income for a statement to the partner’s North total factor amounts from Form 58,
federal income tax purposes. Dakota Schedule K-1 (Form 58) Schedule FACT, Column 1, lines 7, 8,
identifying the net nonbusiness and 12.
For purposes of calculating the gain
income and showing the calculation of
or loss for I.R.C. § 179 property
the amount entered on the applicable
dispositions included in box 20 of Before you file
line(s) of Part 4.
Federal Schedule K-1, include all of
Form 58
the Section 179 deduction passed Exception 3: Interest from U.S.
through to the partner, regardless of obligations. Do not include interest Signatures
whether or not the partner actually from U.S. obligations in determining The return must be signed and dated
deducted all of it. the amount to enter on Part 4, line 30. by a general partner or an authorized
representative of the partnership.
Exception 1: Professional service Part 5
If the partnership pays someone
partnership. If the partnership is Nonresident partner and other than one of its partners or
a professional service partnership,
calculate the amount to enter on tax-exempt organization an employee of the partnership to
line 29 (guaranteed payments) by partner only prepare the return, the paid preparer
adding the following two amounts: Complete Part 5 for a nonresident also must sign and date the return.
partner and a tax-exempt organization
• Guaranteed payments for services partner for which an amount was Preparer authorization check-off
performed within North Dakota by required to be entered on Form 58, The partnership may authorize the
the partner. Schedule KP, Column 6. Office of State Tax Commissioner to
discuss matters pertaining to its 2023
• Guaranteed payments for other
Line 40 Form 58 with the preparer who signed
than personal services multiplied
North Dakota distributive share of it. To do so, fill in the circle next to
by the partnership’s apportionment
income (loss) the signature area in the lower right-
factor from Schedule FACT, line 14.
Enter the partner’s North Dakota hand corner of page 1 of Form 58.
Exception 2: Allocable distributive share of income (loss) This authorization applies only to the
nonbusiness income. If the from Form 58, Schedule KP, Column 6. individual whose signature and printed
partnership treated any part of a name appear in the paid preparer
Line 41
distributable item of income from section of the signature area. It does
North Dakota income tax withheld
the partner’s Federal Schedule K-1 not apply to the firm, if any, shown in
Enter the amount of North Dakota
as nonbusiness income subject to that section.
income tax withheld from the
allocation, calculate the amount to
partner’s North Dakota distributive This authorization allows the Office of
enter on the corresponding line of this
share of income from Form 58, State Tax Commissioner to contact the
part in the following steps:
Schedule KP, Column 7. preparer to answer any questions that
1. Subtract the net nonbusiness may arise during the processing of the
Line 42
income (gross amount less partnership’s return. It also authorizes
North Dakota composite income
related expenses) from the preparer to respond to questions
tax
the applicable distributable and to provide any information
Enter the amount of North Dakota
amount shown on the Federal missing from the return, to contact
composite income tax on the partner’s
Schedule K-1. the Office of State Tax Commissioner
North Dakota distributive share of
to inquire about the status of the
2. Multiply the remaining income from Form 58, Schedule KP,
return’s processing and related refund
distributive amount, if any, (from Column 8.
step one) by the partnership’s or payment, and to respond to Office
apportionment factor from Part 6 of State Tax Commissioner notices
Schedule FACT, line 14. Partnership or corporation that the partnership shares with the
preparer pertaining to math errors
3. Add the result (from step two) partner only or return preparation. (The Office of
to the portion, if any, of the net Complete Part 6 for a partner that is State Tax Commissioner notices will
nonbusiness income allocable a partnership, corporation, or other be sent only to the partnership.)
to North Dakota, and enter the entity treated like a partnership or
result on the corresponding line corporation. This authorization automatically
of Part 4. expires on the due date (including
Line 43 extensions) for filing the 2024
Note: If any portion of the net North Dakota factors Form 58.
nonbusiness income removed from the Enter in the corresponding column the
distributable amount (in step 1 above) partner’s share of the partnership’s
is allocable outside North Dakota, do North Dakota apportionment
not enter it anywhere on North Dakota factor amounts from Form 58,
Schedule K-1 (Form 58). Schedule FACT, Column 2, lines 7, 8,
and 12.
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This authorization does not authorize Qualified nonprofit private schools
the preparer to receive a refund (for Form 58, Schedule K, lines 17 through 19)
check, to bind the partnership in For purposes of the credits on Form 58, Schedule K, lines 17 through 19, the following
any way (including any additional lists the qualifying schools in each school category. (Note: These lists are subject to
tax liability), or to represent the change.)
partnership before the Office of State Primary Schools (Grades K through 8)
Tax Commissioner for any other Anne Carlsen Center (Jamestown) School of the Holy Family (Mandan)
purpose. Bishop Ryan Catholic School (Minot) Shanley High-Sullivan Middle School
Brentwood Adventist Christian School (Fargo)
Assembling a paper return (Bismarck) Shiloh Christian School (Bismarck)
Please assemble Form 58 and its Capstone Classical Academy (Fargo) SonShine Elementary (Minot)
required attachments in the following Cathedral of the Holy Spirit Elementary St Alphonsus Elementary School
order: School (Bismarck) (Langdon)
Christ the King Catholic Montessori St Anne Elementary School (Bismarck)
1. Form 58. School (Mandan) St Ann’s Catholic School (Belcourt)
2. Schedule FACT. Dakota Memorial School (Minot) St Bernard Mission School (Fort Yates)
Dakota Montessori School (Fargo) St Catherine Elementary School
3. Schedule K. Forest River School (Fordville) (Valley City)
4. Schedule KP. Full Circle Academy (Fargo) St John’s Academy (Jamestown)
Grace Lutheran Elementary School St John’s Elementary School (Wahpeton)
5. All other required North Dakota (Fargo) St Joseph Elementary School (Mandan)
schedules and forms (other than Hillcrest SDA School (Jamestown) St Joseph Elementary School
North Dakota Schedule K-1 Holy Family – St. Mary’s Elementary (Devils Lake)
forms). School (Grand Forks) St Joseph’s Elementary School (Williston)
6. North Dakota Schedule K-1 Holy Spirit Elementary School (Fargo) St Mary’s Academy (Bismarck)
forms. Hope Christian Academy (Dickinson) St Mary’s Elementary School (Bismarck)
Invitation Hill Adventist School St Michael’s Elementary School
7. Required supporting statements. (Dickinson) (Grand Forks)
8. Complete copy of Form 1065 Johnson Corners Christian Academy St. Monica’s Montessori (Fargo)
(or 1065-B) including Federal (Watford City) The Innovation School (Bismarck)
Schedule K-1 forms. Little Flower Elementary School (Rugby) Trinity Elementary East School
Martin Luther School (Bismarck) (Dickinson)
A balance due may be paid Nativity Elementary School (Fargo) Trinity Elementary North School
electronically (see page 12 of these New Testament Baptist Christian School (Dickinson)
instructions). If paying with a paper (Larimore) Trinity Elementary School (West Fargo)
check, enclose the check and a 2023 Oak Grove Lutheran Elementary School Trinity Elementary West School
(Fargo) (Dickinson)
Form 58-PV payment voucher with the Our Redeemer’s Christian School (Minot) Trinity Jr/High School (Dickinson)
return. Prairie Learning Education Center Valley City Christian School (Valley City)
(Raleigh) Victory Christian School (Jamestown)
Prairie Voyager Adventist School Williston Trinity Christian School
(Grand Forks) (Williston)
High Schools (Grades 9 through 12)
Anne Carlsen Center (Jamestown) Our Redeemer’s Christian School (Minot)
Bishop Ryan Catholic School (Minot) Prairie Learning Education Center
Dakota Adventist Academy (Bismarck) (Raleigh)
Dakota Memorial School (Minot) School of the Holy Family (Mandan)
Hope Christian Academy (Dickinson) Shanley High-Sullivan Middle School
Johnson Corners Christian Academy (Fargo)
(Watford City) Shiloh Christian School (Bismarck)
New Testament Baptist Christian School St Mary’s Central High School (Bismarck)
(Larimore) Trinity Jr/High School (Dickinson)
Oak Grove Lutheran Middle/High School Williston Trinity Christian School
(Fargo) (Williston)
Colleges (Education above 12th grade)
Jamestown College (Jamestown) United Tribes Technical College
Trinity Bible College (Ellendale) (Bismarck)
Turtle Mountain Community College University of Mary (Bismarck)
(Belcourt) ND Independent College Fund
(Bismarck)
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