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Contents
Need help?
Where to get help and forms ........................................................ This page You can download forms and find other
Changes for 2018 ................................................................................... 1 information on our website at:
General instructions ................................................................................2 www.nd.gov/tax
Who must file .....................................................................................2 Email
When and where to file ........................................................................ 2 Individual, estate, trust, partnership,
and S corporation income tax—
Extension of time to file ....................................................................... 2
individualtax@nd.gov
Penalty and interest ............................................................................ 2
Estimated tax payment (for 2019) ........................................................ 3 Call
Withholding from nonresident partners .................................................. 3 Individual income tax—
Composite filing ..................................................................................3 Questions 701.328.1247
Correcting a previously filed return ........................................................ 3 Forms 701.328.1243
Reporting federal changes .................................................................... 4 Partnership income tax—
W‑2/1099 reporting requirement .......................................................... 4 Questions 701.328.1258
Disclosure notification ......................................................................... 4 Forms 701.328.1243
Use of information .............................................................................. 4 Speech/hearing impaired
General instructions for completing Form 58 .............................................. 4 TDD 800.366.6888
Specific line instructions ..........................................................................4
Write
Form 58, Page 1, Items A‑J .................................................................. 4 Office of State Tax Commissioner
Schedule FACT ...................................................................................5 600 E. Boulevard Ave., Dept. 127
Schedule K ........................................................................................6 Bismarck, ND 58505-0599
Schedule KP .......................................................................................9
Walk-in service
Form 58, Page 1, Lines 1‑12 ............................................................... 10
State Capitol, 16th Floor
Schedule K‑1 .................................................................................... 11 Monday through Friday
Before you file Form 58 ..................................................................... 13 8:00 a.m. to 5:00 p.m.
(except holidays)
Required forms
The following forms are needed to complete Form 58:
Form 58 Partnership return
Schedule FACT Calculation of North Dakota apportionment factor
Schedule K Total North Dakota adjustments, credits, and other
items distributable to partners
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 1974,
Form 101 Application for extension of time to file a North Dakota disclosure of a Federal Employer Identification
income tax return Number (FEIN) or social security number
Form PWA Passthrough entity withholding adjustment on this form is required under N.D.C.C.
Form PWE Nonresident passthrough entity member exemption and §§ 57‑01‑15 and 57‑38‑42, and will be
certification used for tax reporting, identification, and
administration of North Dakota tax laws.
Download these forms from our website at www.nd.gov/tax. Disclosure is mandatory. Failure to provide
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
www.nd.gov/tax
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Changes affecting partnerships
Developments, updates, and items of interest relating to partnership income tax
New Schedule QEC • For those deductions and tax credits for Electronic payment. For convenience and
which there is no officially prescribed security and knowing the payment was
Schedule QEC (for filers of Forms 38, 40, schedule on which the deduction or timely received by our office, use one of
58, and 60) is a new supplemental schedule credit is separately calculated, the the following electronic payment options:
to Form 58. Starting with the 2018 tax year, partnership must attach a supporting
• Online—Pay online with an electronic
a partnership must complete and attach this statement showing how it calculated the
check or a debit or credit card. The
schedule to Form 58 to claim the North deduction or tax credit. The requirement
electronic check option is free. A
Dakota endowment fund tax credit based on to attach a prescribed schedule or
convenience fee is charged by the
contributions it makes directly to a qualified supporting statement is noted in
service provider for the debit or credit
endowment fund. Note: If a partnership parentheses on each line.
receives a North Dakota qualified card option, none of which goes to the
endowment fund tax credit from another • The lines for the automation tax credit State of North Dakota. To pay online, go
passthrough entity on a North Dakota and the angel fund investment tax credit to www.nd.gov/tax/ payment.
Schedule K-1, the credit is not reported were removed because they expired in
• Electronic funds transfer—Pay by
on the new Schedule QEC; instead, the 2017.
means of an Automated Clearing House
credit and the related contribution amount • The line for the endowment fund tax (ACH) credit transaction, which the
shown on the North Dakota Schedule K-1 credit was split into four lines—see taxpayer initiates through the taxpayer’s
must be reported on the applicable lines of lines 15a through 15d. If a partnership own banking institution. For more
Schedule K of Form 58. completes Schedule QEC to claim an information, go to www.nd.gov/tax/
endowment fund credit based on its payment and click on “ACH credit” at
Changes to 2018 Form 58 and own contributions, the credit and its bottom of page.
its instructions related contribution amount are entered
Payment by check. If choosing to mail a
on lines 15a and 15b, respectively. If
paper check, complete and enclose with the
The Form 58, page 1, Item F, instructions a partnership receives a North Dakota
check the appropriate payment voucher as
to the “Composite filing” check-off were Schedule K-1 from another passthrough
follows:
revised to provide that it must be checked entity on which an endowment fund
only if all eligible nonresident partners elect credit is reported, the credit amount(s) • Use Form 58-ES if making an estimated
to include their distributive shares of North and related contribution amount(s) are tax payment.
Dakota source income in a composite filing. to be entered on lines 15c and 15d,
• Use Form 58-EXT if making an
If any eligible nonresident partner does not respectively.
make the election to be included, do not fill extension payment.
in the circle next to “Composite filing.” • Use Form 58-PV if paying a balance
Changes to 2018 Schedule K-1
On Schedule K, the following changes due on Form 58.
were made: On Schedule K-1 (Form 58), Part 3, the
Don’t have a payment voucher? Print one
lines for the automation credit and the angel
out at www.nd.gov/tax/payment.
• The instructions in the property tax fund credit were removed to correspond
clearance section at the top of the with the same changes made to Schedule K.
schedule were revised to clarify that Federal tax reform changes
a partnership claiming any of the On Schedule K-1 (Form 58), Part 3, the
identified deductions or credits must line for the endowment fund credit was Major changes to federal income tax law
answer the question that asks if it or any split into four lines—see lines 15a through made by the federal Tax Cuts and Jobs Act
responsible partner owns a 50 percent 15d—to correspond with the same changes take effect in 2018. The starting point in
or more interest in real estate located in made to Schedule K. calculating North Dakota taxable income
North Dakota. If any of the identified is federal taxable income. Therefore,
North Dakota income tax law conforms to
deductions or credits are claimed, but the Reminder: Return payment
those changes that affect the calculation
partnership or its responsible partners do options
not hold a 50 percent or more ownership of federal taxable income. These include
interest in real property in North Dakota, North Dakota offers several payment the changes to the section 179 expensing,
the partnership must answer no to the options for submitting an estimated tax depreciation, and like-kind exchange
question. Failure to answer the question payment, extension payment, or payment of provisions, and the new provisions on the
may delay the processing of the return. a balance due on a return. taxation of foreign-sourced income.
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Form 58 Instructions 2018
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.
When and where to file Extension interest. If Form 58 is filed on or
General before the extended due date, and the total
The 2018 Form 58 must be filed on or before
instructions (1) April 15, 2019, if filing for the 2018 amount of tax due is paid with the return, no
calendar year, or (2) the 15th day of the 4th penalty will be charged. Interest on the tax
month following the end of the tax year, if due will be charged at the rate of 12% per
Who must file filing for a fiscal year beginning in the 2018 year from the original due date of the return
A 2018 Form 58, Partnership Income Tax calendar year. If the due date falls on a to the earlier of the date the return is filed or
Return, must be filed by a partnership that Saturday, Sunday, or holiday, the return may the extended due date.
meets both of the following: be filed on or before the next day that is not a Prepayment of tax due. If an extension
• It is required to file a 2018 Form 1065, Saturday, Sunday, or holiday. of time to file Form 58 is obtained, any
U.S. Return of Partnership Income. Note: Use the 2017 Form 58 if filing tax expected to be due may be paid on or
• It carries on business, or derives gross for a fiscal year beginning in the 2017 before the regular due date to avoid paying
income from sources, in North Dakota calendar year. extension interest. For more information,
during the 2018 tax year. including payment options, obtain the 2018
Mail Form 58 and all required attachments to: Form 58-EXT.
Investment partnership. A partnership
that elects out of the partnership rules under Office of State Tax Commissioner Alternatively, a check or money order may be
I.R.C. § 761(a)(1) and does not file a federal 600 East Boulevard Ave., Dept. 127 sent with a letter containing the following: (1)
partnership return must file a 2018 Form 58 Bismarck, ND 58505-0599 name of partnership, (2) partnership’s FEIN,
if it carries on investment activity, or derives (3) partnership’s address and phone number,
any gross income from sources, in North Extension of time to file and (4) statement that the payment is a 2018
Dakota during its 2018 tax year. A 2018 An extension of time to file Form 58 may be Form 58-EXT payment.
Form 1065 must be completed on a pro forma obtained in one of the following ways:
basis and attached to Form 58. • Obtain a federal extension. Penalty and interest
Limited liability company (LLC). A limited • Separately apply for a North Dakota If an extension of time to file Form 58 was
liability company that is classified as a extension. obtained, the tax due may be paid by the
extended due date of the return without
partnership for federal income tax purposes Federal extension. If an extension of time to penalty, but extension interest will apply—see
is treated like a partnership for North Dakota file the federal partnership return is obtained, “Extension interest” and “Prepayment of tax
income tax purposes and must file Form 58 if it is automatically accepted as an extension of due” on this page.
it meets the above conditions for filing. time to file Form 58. If this applies, a separate
Nonfiler penalty. If a partnership does North Dakota extension does not have to If Form 58 is filed by its due date (or
not file Form 58 as required, a minimum be applied for, nor does the Office of State extended due date), but the total amount
$500 penalty may be assessed if the failure Tax Commissioner have to be notified that of tax due is not paid by the due date (or
continues after receiving a thirty-day a federal extension has been obtained prior extended due date), a penalty equal to 5% of
notice to file from the Office of State Tax to filing Form 58. The extended due date for the unpaid tax or $5.00, whichever is greater,
Commissioner. North Dakota purposes is the same as the must be paid.
federal extended due date. If Form 58 is filed after its due date (or
Disaster recovery tax exemptions. North Dakota extension. If a federal extended due date), and there is an unpaid
Exemptions from state and local tax filing extension is not obtained, but additional tax due on it, a penalty equal to 5% of the
and payment obligations are available to time is needed to complete and file Form 58, unpaid tax due or $5.00, whichever is greater,
out-of-state businesses and their employees a separate North Dakota extension may be for the month the return was due plus 5% of
who are in North Dakota on a temporary basis applied for by filing Form 101, Application the unpaid tax due for each additional month
for the sole purpose of repairing or replacing for Extension of Time to File a North (or fraction of a month) during which the
natural gas, electrical, or telecommunication Dakota Tax Return. This is not an automatic return remains delinquent must be paid. This
transmission property that is damaged, or extension—there must be good cause to penalty may not exceed 25% of the tax due.
under threat of damage, from a state- or request a North Dakota extension. Form 101 In addition to any penalty, interest must be
presidentially-declared disaster or emergency. must be postmarked on or before the due paid at the rate of 1% per month or fraction
For more information, go to www.nd.gov/tax. date of Form 58. Notification of whether of a month, except for the month in which
the extension is accepted or rejected will the tax was due, on any tax due that remains
be provided by the Office of State Tax unpaid after the return’s due date (or extended
Commissioner. due date).
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Estimated tax payment Column 7. If a nonresident partner meets calculation and reporting of a tax
(for 2019) certain conditions, an amount less than the amount for the nonresident partner on
A partnership may, but is not required to, amount calculated at the 2.90% tax rate may Form 58, Schedule KP, Column 8. (If the
make estimated income tax payments. For be withheld. For the qualifying conditions, distributive share is a loss, the tax is zero.)
more information, including payment options, see Form PWA. A partnership must submit a
The distributive share of North Dakota
obtain the 2019 Form 58-ES. payment for the total amount of withholding
income included in a composite return is
reported on Schedule KP, Column 7, with
subject to tax even if it is under $1,000.
Form 58 when it is filed.
Withholding from Composite filing method procedure.
nonresident partners Publicly traded partnership. A publicly
The tax under the composite filing method
A partnership must withhold North Dakota traded partnership, as defined under Internal
is calculated and reported on Form 58,
income tax at the rate of 2.90% from the Revenue Code § 7704(b), does not have to
Schedule KP, Column 8. A partnership must
year-end distributive share of North Dakota withhold North Dakota income tax from its
submit a payment for the total tax reported on
income of a nonresident partner. See unitholders if it meets both of the following:
Schedule KP, Column 8, with Form 58 when
“Publicly traded partnership” on this page for • It is treated as a partnership for federal it is filed.
an exception to this requirement. income tax purposes.
• It reports on Form 58, Schedule KP, Correcting a previously filed
Nonresident partner. For purposes of this every unitholder with a North Dakota
return
withholding requirement, a nonresident distributive share of income of over $500.
partner means: If a partnership needs to correct an error on
Form 58 after it is filed, the partnership must
• an individual who is not domiciled in Composite filing file an amended return. There is no special
North Dakota; A composite filing method is available to form for this purpose. See “How to prepare an
• a trust, including a grantor trust, that is not a partnership with one or more eligible amended 2018 return” below.
organized under North Dakota law. This nonresident partners. Under this method,
only includes trusts that are subject to a partnership calculates the North Dakota If a partnership paid too much tax because of
income tax; or income tax on an eligible nonresident an error on its 2018 Form 58, the partnership
• a passthrough entity that has a commercial partner’s year-end distributive share of generally has three years from the due date
domicile outside North Dakota. A North Dakota income and pays the tax of the return (excluding extensions) or the
passthrough entity includes a partnership, with Form 58. The tax is calculated at the date the return was actually filed, whichever
S corporation, limited liability company highest individual income tax rate (which is later, in which to file an amended return
treated like a partnership or S corporation, is 2.90% for the 2018 tax year), and no to claim a refund of the overpayment. See
and any other similar entity. adjustments, deductions, or tax credits are N.D.C.C. § 57-38-40 for other time periods
allowed in calculating the tax. A composite that may apply.
Exemption from withholding. No filing satisfies the North Dakota income tax How to prepare an amended 2018 return
withholding is required if any of the following filing and payment obligations of the eligible
apply: nonresident partners included in it, which 1. Obtain a blank 2018 Form 58.
means they do not have to separately file their 2. Enter the partnership’s name, current
• The distributive share of North Dakota own North Dakota income tax returns. The address, FEIN, etc., in the top portion of
income is less than $1,000. composite filing method is optional and does page 1 of Form 58.
• The nonresident partner elects to include not require prior approval from the Office of 3. Fill in the “Amended return” circle at the
the distributive share in a composite State Tax Commissioner, and a choice to use top of page 1 of Form 58.
filing—see “Composite filing” on this it may be made on a year-to-year basis.
page. 4. Complete Schedules FACT, K, and KP
Eligible nonresident partner. For purposes using the corrected information. However,
• The nonresident partner is a passthrough of this composite filing method, a nonresident unless there is an increase in the amount
entity and elects exemption from partner has the same meaning as that used reported on Schedule KP, Column 6, of
withholding on its distributive share for withholding income tax from nonresident the amended return, enter on Schedule KP,
of North Dakota income. For more partners—see “Withholding from nonresident Column 7, the same amount reported on
information, obtain Form PWE. partners” on this page. A nonresident partner the previously filed return. Then complete
Withholding procedure. This withholding is eligible to be included in a composite filing lines 1 through 3 on page 1 of Form 58.
requirement applies to a nonresident partner’s if both of the following apply: 5. On line 5 of page 1 of Form 58, enter the
year-end distributive share of North Dakota • The nonresident partner’s only source of total taxes due from the previously filed
income, which is determined at the end income within North Dakota is one or 2018 Form 58, page 1, line 3.
of the partnership’s tax year and reported more passthrough entities. A passthrough 6. Complete line 7 (overpayment) or line 10
on Form 58, Schedule KP, Column 6. entity includes a trust, partnership, S (tax due), whichever applies. If there is
The requirement does not apply to actual corporation, limited liability company an overpayment on line 7, enter the full
distributions made to a nonresident partner treated like a partnership or S corporation, amount on line 9 (refund). On an amended
during the tax year. The withholding amount and any other similar entity. return, the amount credited to the next
is calculated and reported on Schedule KP, • The nonresident partner elects to be
included in a composite filing. An
election is indicated by the partnership’s
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year’s estimated tax (line 8) may not be Item A
increased or decreased. General Tax year
The same tax year used for federal income
7. Attach a statement explaining the instructions for tax purposes (as indicated on the federal
reason(s) for filing the amended return.
If it is because of changes the partnership completing partnership return) must be used for North
Dakota income tax purposes. Fill in the
or the IRS made to the partnership’s 2018
Form 58 applicable circle. If the partnership uses a
Federal Form 1065, attach a copy of the
fiscal year, enter the beginning and ending
amended federal return or IRS notice. Complete Form 58 as
dates of the fiscal year. Use the 2018
8. Complete and provide a corrected follows: Form 58 only if the partnership’s tax year
Schedule K-1 (Form 58) to the partners, as 1. Complete Federal Form 1065 (or began in the 2018 calendar year.
required. 1065‑B) in its entirety.
Item B
2. Complete Items A through J at Name and address
Reporting federal changes the top of page 1 of Form 58—see Enter the legal name of the partnership on
If the Internal Revenue Service (IRS) changes page 4.
or audits the federal partnership return, or the first line of the name and address area.
if a partnership files an amended federal 3. Complete Schedule FACT on page 2 of If the partnership publicly operates under a
Form 58—see page 5.
partnership return, an amended North Dakota fictitious or assumed name (which, in most
Form 58 must be filed within ninety days after 4. Complete Schedule K on page 3 of states, must be recorded or registered with
the final determination of the IRS changes Form 58—see page 6. the state), enter that name on the second
or the filing of the amended federal return. 5. Complete Schedule KP on page 5 of line of the name and address area. If filing
Enclose a copy of the IRS audit report or the Form 58—see page 9. an amended return, enter the most current
address.
amended federal partnership return with the 6. Complete lines 1 through 12 on
amended North Dakota Form 58. page 1 of Form 58—see page 10. Item C
7. Complete Schedule K‑1, if required, Federal EIN
W-2/1099 reporting for the partners—see page 11. North Dakota uses the federal employer
requirement identification number (FEIN or federal EIN)
Every partnership doing business in North Rounding of numbers. Numbers may be for identification purposes. Enter the federal
Dakota that is required to file Federal entered on the return in dollars and cents, or employer identification number from page 1
Form 1099 or W-2 must also file one with the they may be rounded to the nearest whole of Federal Form 1065.
Office of State Tax Commissioner. For more dollar. If rounding, drop the cents if less
information, obtain the guideline Income Tax than 50 cents and round up to the next whole Item D
Withholding: Information Returns. dollar amount if 50 cents or higher. For Business code number
example, $25.36 becomes $25.00, and $25.50 Enter the business code number from the
Disclosure notification becomes $26.00. NAICS code list found on the Office of
State Tax Commissioner’s website at
Upon written request from the chairman of a Fiscal year filers. The tax year for North www.nd.gov/tax. Enter the code that most
North Dakota legislative standing committee Dakota income tax purposes must be the closely describes the industry in which the
or Legislative Management, the law requires same as the tax year used for federal income partnership derives most of its income.
the Office of State Tax Commissioner to tax purposes. Use the 2018 Form 58 if the
disclose the amount of any deduction or partnership’s taxable year began in the 2018 Item E
credit claimed on a tax return. Any other calendar year. Note: Use the 2017 Form 58 if Date business started
confidential information, such as a taxpayer’s the taxable year began in the 2017 calendar Enter the date the business started from
name or federal employer identification year. page 1 of Federal Form 1065.
number, may not be disclosed.
Item F
Indicators
Use of information Specific line
Fill in applicable circles, as follows:
All of the information on Form 58 and its
instructions for
attachments is confidential by law and cannot Initial return. Fill in circle if this is the
be given to others except as provided by page 1 of Form 58, first return filed in North Dakota by the
state law. Information about the partners partnership.
is required under state law so the Office Items A-J
Final return. Fill in circle if this is the last
of State Tax Commissioner can determine return to be filed in North Dakota by this
Complete Items A through J at
the partner’s correct North Dakota taxable the top of page 1 of Form 58. partnership.
income and verify if the partner has filed a Then complete Schedule FACT,
return and paid the tax. Schedule K, and Schedule KP before Farming/ranching partnership. Fill in
completing lines 1 through 12 on circle if this is an LLC that is registered as
page 1 of Form 58.
a farming and ranching LLC with the North
Dakota Secretary of State.
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Filed by an LLC. Fill in circle if the entity If the amount of any factor’s denominator is
filing this return is a limited liability company Instructions for zero, exclude that factor from the calculation.
(LLC). Schedule FACT Special apportionment rules may apply
Composite return. Fill in this circle only (Form 58, page 2) in the case of certain industries or unique
if (1) the partnership has one or more circumstances. For additional information
General instructions
nonresident partners eligible to be included in on the apportionment factor, see N.D.C.C.
a composite filing and (2) all of them elected All partnerships must complete the applicable ch. 57-38.1 and N.D. Admin. Code
to include their distributive shares of North portions of Schedule FACT. ch. 81-03-09.
Dakota source income in a composite filing.
If the partnership has ONLY individual,
See “Composite filing” on page 3 for more
estate, and trust partners, complete Schedule
information. Specific line instructions
FACT as follows:
Amended return. Fill in circle if this return Property Factor
• 100% North Dakota partnership
is being filed to correct a previously filed Lines 1 through 6
If the partnership conducted all of its
2018 Form 58. See “Correcting a previously Owned and rented property
business within North Dakota during the
filed return” on page 3 for more information. Enter on the applicable line the average value
tax year, skip lines 1 through 13 and enter
Extension. Fill in circle if a federal or state “1.000000” on line 14. of real and tangible personal property owned
extension of time to file the return was and rented by the partnership. For owned
• Multistate partnership
obtained. See “Extension of time to file” on property, this generally means the average of
If the partnership conducted its trade or
page 2 for more information. the original cost (before depreciation) used
business both within and without North for federal income tax purposes. For rented
Item G Dakota during the tax year, complete property, this generally means the amount of
Number of partners lines 1 through 14. However, if all rent paid multiplied by eight. Certain property
Enter the total number of partners and the of the partners consist of only North items are subject to special rules. Do not
number of each type of partner. Dakota resident individuals, estates, and include amounts related to construction in
trusts, skip lines 1 through 13 and enter progress. Include on line 5 the partnership’s
Item H “1.000000” on line 14. share of the property factor from a North
Professional service partnership
Indicate whether the partnership is a If the partnership has a partner OTHER Dakota Schedule K-1 (Form 58), Part 6.
professional service partnership. A THAN an individual, estate, or trust, complete The average value of owned and rented
“professional service partnership” is a lines 1 through 14 of Schedule FACT. property is assigned to North Dakota if the
partnership that engages in the practice of property is located in North Dakota. The
law, accounting, medicine, or any other Apportionment factor in amount attributable to mobile property is
profession in which the capital or the services general generally assignable to North Dakota based
of employees are not a material income- on a ratio of the property’s time spent in
producing factor. The services performed by In general, the apportionment factor is a North Dakota. For more complete information
the partners themselves must be the primary product of a formula consisting of an equally- on the property factor, see N.D. Admin. Code
income-producing factor. A professional weighted average of three factors: property, §§ 81-03-09-15 through 81-03-09-21 and
service partnership does not include one that payroll, and sales. Each factor represents 81-03-09-33.
primarily engages in wholesale or retail sales the percentage of the partnership’s North
activity, manufacturing activity, or any other Dakota activity compared to its total activity
Payroll Factor
type of activity in which the capital or the everywhere. A partnership multiplies its
services of employees are a material income- business income by the apportionment factor Line 8
producing factor. to determine the portion of its business Enter the amount of total compensation paid
income attributable to North Dakota. to employees for the tax year. This includes
gross wages, salaries, commissions, and
Item I If the partnership includes the distributable
Publicly traded partnership any other form of remuneration paid to the
Indicate whether the partnership is a share of income from another partnership in
employees. Use the amount before deductions
publicly traded partnership. A “publicly its apportionable business income, include
for deferred compensation, flexible spending
traded partnership” is a partnership in in the numerator and denominator of each
plans, and other payroll deductions. Do
which interests in it are either traded on an factor the partnership’s proportionate share
not include amounts paid for employee
established securities market or are readily of the other partnership’s apportionment
benefit plans that are not considered taxable
tradable on a secondary market. factors—see the specific line instructions
wages to the employee. An employee is an
for more information. Do not include in the
individual treated as an employee under the
Item J factors any property, payroll, or sales related
usual common law rules, which generally
Tiered partnership to allocable nonbusiness income—see the
mirror an individual’s status for purposes of
Indicate whether the partnership holds an instructions to Form 58, Schedule K, line 25,
unemployment compensation and the Federal
interest in one or more other partnerships or for what constitutes allocable nonbusiness
Insurance Contribution Act. Do not include
limited liability companies. If it does, attach income.
a statement to Form 58 showing the name on this line guaranteed payments to partners.
and federal employer identification number of
each partnership or limited liability company
in which it holds an interest.
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Compensation of an employee’s services country where the sales are not subject to a Line 1
performed entirely within North Dakota is tax measured by income in that jurisdiction. Income from state, local, and
foreign securities and bonds
assigned to North Dakota. For an employee For more complete information, see N.D.
Enter on this line interest and dividend
whose services are performed in more than Admin. Code §§ 81-03-09-29 and
income from state, local, and foreign
one state, compensation is generally assigned 81-03-09-30.
securities and bonds that is exempt from
to North Dakota based on the amount of
federal income tax. Do not include interest
compensation reported to North Dakota Line 14 income from securities or bonds issued by
for unemployment compensation purposes. Apportionment factor
North Dakota or its political subdivisions.
Whether or not state income tax was withheld Divide line 13 by the number of factors Do not enter on this line any income that
from an employee’s compensation does not having an amount greater than zero in is treated as nonbusiness income subject to
affect where the compensation is assigned column 1 on lines 7, 8, and 12. Enter the allocation under N.D.C.C. §§ 57-38.1-04
for apportionment factor purposes. Include result on this line. through 57-38.1-08. Include the nonbusiness
on this line in the applicable column the
income on Schedule K, line 23.
partnership’s share of the payroll factor from
a North Dakota Schedule K-1 (Form 58), Instructions for Line 2
Part 6. For more complete information on State and local income taxes
the payroll factor, see N.D. Admin. Code Schedule K
Enter on this line the taxes measured by
§§ 81-03-09-22 through 81-03-09-25. (Form 58, page 3) income that were incurred by the partnership
and deducted in calculating the partnership’s
All partnerships must complete Schedule K.
ordinary income (loss). Include franchise
Sales Factor The purpose of this schedule is to show the
or privilege taxes measured by income paid
total amount of North Dakota adjustments,
to any taxing authority, including a foreign
Line 9 credits, and other items distributable to its
Everywhere sales country.
Enter the partnership’s total sales or receipts, partners. These items may be applicable to
less returns or allowances, for the tax year. the preparation of the partners’ North Dakota Line 3
Sales generally means all gross receipts of income tax returns. Interest from U.S. obligations
Enter on this line interest income from U.S.
a partnership. However, the types of sales Include on the applicable lines of Schedule K
obligations and from securities the interest
or gross receipts included in the sales factor any adjustments, credits, etc., from a North
from which is specifically exempted from
depend on the nature of the partnership’s Dakota Schedule K-1, as instructed in the
state income tax by federal statute. Include
regular business activities and may include partner or beneficiary instructions to that
the portion of dividend income from a mutual
amounts other than sales reported on form.
Form 1065, line 1. Include on this line fund attributable to the fund’s investment in
the same kinds of securities.
the partnership’s share of the everywhere Reminder: Be sure to attach to Form 58
sales from a North Dakota Schedule K-1 any prescribed schedule or other supporting Do not enter on this line interest income
(Form 58), Part 6. document specified in the instructions. from securities of the Federal Home Loan
Mortgage Corporation (Freddie Mac), Federal
Line 10 Property tax clearance National Mortgage Association (Fannie Mae),
North Dakota sales North Dakota Century Code § 57-01- Government National Mortgage Association
For sales of tangible property, the sale is 15.1 provides that, before certain state (Ginnie Mae), or from a federal income tax
assigned to North Dakota if the destination tax incentives may be claimed, a taxpayer refund or repurchase agreement. Attach a
of the property is in North Dakota, regardless must obtain a property tax clearance record statement identifying the specific securities
of the shipping terms. For sales of other from each North Dakota county in which from which the interest was derived.
than tangible property, the sale is assigned the taxpayer holds a 50 percent or more
to North Dakota if the income-producing ownership interest in real property. The Line 4a
activity which gave rise to the receipt is property tax clearance record(s) must be Renaissance zone exemption
performed in North Dakota. Include on attached to the North Dakota tax return on (Projects approved before 8/1/13)
this line the partnership’s share of the which the incentive is claimed. Certain Enter on this line the amount from
North Dakota sales from a North Dakota tax incentives on Form 58, Schedule K, are Schedule RZ, Part 7, line 1c. Attach
Schedule K-1 (Form 58), Part 6. For more subject to this requirement. The incentives Schedule RZ.
complete information, see N.D. Admin. Code subject to this requirement are identified in
Line 4b
§§ 81-03-09-26 through 81-03-09-31 and the box at the top of Schedule K. Renaissance zone exemption
81-03-09-34. (Projects approved after 7/31/13)
If the partnership is claiming any of the
Line 11 specified incentives, it must complete the Enter on this line the amount from
Throwback sales property tax clearance section at the top of Schedule RZ, Part 7, line 1h. Attach
Enter the amount of sales shipped from a Schedule K. If the partnership is required to Schedule RZ.
location in North Dakota that are delivered attach a property tax clearance record, obtain
to the U.S. government or to another state or one by completing the form Property Tax
Clearance Record, which is available on the
Office of State Tax Commissioner’s website.
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Line 5 investments made in tax years 2005 and Complete this line only if any of the
New or expanding business income after. See N.D.C.C. ch. 57-38.6. Attach following apply:
exemption
a copy of the Ag Commodity Processing
If the partnership qualified for the new or The partnership completed the installation
Facility Investment Reporting Form. Or,
expanding business income exemption under of a qualifying biomass, geothermal, solar,
if claiming an agricultural commodity
N.D.C.C. ch. 40-57.1, enter the exempt or wind energy device before January 1,
processing facility investment credit from
portion of the partnership’s business income. 2015, and the 2018 tax year is one of
a North Dakota Schedule K-1, attach a
See N.D. Admin. Code § 81-03-01.1-06 for the five tax years in which the credit is
statement identifying the facility in which
guidance on calculating the amount of the allowed for the installation.
the investment was made.
exempt income. Attach a statement showing The partnership commenced installation
the calculation of the exempt income. Line 10 of a qualifying wind energy device before
Biodiesel or green diesel fuel
Line 6 blending tax credit January 1, 2015, the installation was
Eminent domain gain If the partnership is a licensed supplier of completed prior to January 1, 2017, and
Enter on this line the taxable portion of a gain biodiesel or green diesel fuel, it is allowed the 2018 tax year is one of the five tax
from the disposition of property due to the a credit equal to five cents per gallon for years in which the credit is allowed for the
exercise of eminent domain. blending biodiesel or green diesel fuel having installation.
at least a 5% blend (“B5”) that meets ASTM
Line 7a The partnership is claiming an allowable
Renaissance zone historic property specifications. The blending must be done in credit from a North Dakota Schedule K-1.
preservation tax credit North Dakota. For this purpose, a “supplier”
Enter on this line the amount from means a person who distributes the biodiesel For more information, see N.D.C.C.
Schedule RZ, Part 7, line 4. Attach or green diesel fuel from a terminal in North § 57-38-01.8. Attach a statement with a
Schedule RZ. Dakota. Enter the credit on this line. See description of the device, a detailed list of
N.D.C.C. § 57-38-01.22. Attach a statement the costs of acquisition and installation,
Line 7b showing the calculation of the credit. and the date the device was completely
Renaissance fund organization installed.
investment tax credit Line 11
Enter on this line the amount from Biodiesel or green diesel fuel sales Line 12a. Geothermal device. Enter the
Schedule RZ, Part 7, line 5. Attach equipment tax credit amount of credit for a geothermal device.
Schedule RZ. If the partnership is a licensed seller of
biodiesel or green diesel fuel, it is allowed a Line 12b. Biomass, solar, or wind device.
Line 7c credit equal to 10% of the costs to adapt or Enter the amount of credit for a biomass,
Renaissance zone nonparticipating add equipment to its North Dakota facility to solar, or wind energy device.
property owner tax credit
enable it to sell diesel fuel having at least a
Enter on this line the amount from
2% biodiesel or green diesel blend (“B2”) that
Schedule RZ, Part 7, line 6. Attach Line 13
meets ASTM specifications. For this purpose, Employer internship program tax
Schedule RZ. credit
a “seller” means a person who acquires the
Line 8 fuel from a wholesale supplier or distributor If the partnership hired an eligible college
Seed capital investment tax credit for resale to a consumer at a retail location. student under a qualifying internship program
If the partnership invested in a qualified Except for costs incurred before January 1, set up in North Dakota, it is allowed a credit
business for purposes of the seed capital 2005, include eligible costs incurred before equal to 10% of the compensation paid
investment tax credit, multiply the total the tax year in which sales of the eligible to the intern. For details, see N.D.C.C.
amount invested during the 2018 tax year biodiesel or green diesel fuel begin. The § 57-38-01.24. The partnership is allowed no
by 45% and enter the result on this line. credit is allowed in each of five tax years, more than $3,000 of credits for all tax years.
See N.D.C.C. ch. 57-38.5. Attach a copy starting with the tax year in which sales of the Line 13a. Enter the allowable credit on this
of the Qualified Seed Capital Business eligible biodiesel or green diesel fuel begin. line.
Investment Reporting Form. Or, if Enter the credit on this line. See N.D.C.C.
claiming a seed capital investment credit § 57-38-01.23. Attach a statement showing Line 13b. Enter the number of eligible
from a North Dakota Schedule K-1, attach the calculation of the credit. interns hired during the 2018 tax year.
a statement identifying the qualified Disregard this line if the credit is from a
business in which the investment was Line 12 passthrough entity.
Energy device tax credits
made. Line 13c. Enter on this line the total
Note: Except for certain wind energy
Line 9 devices, the income tax credit for installing compensation paid to eligible interns during
Ag commodity investment tax credit a biomass, geothermal, solar, or wind the 2018 tax year (as shown on their 2018
If the partnership invested in a qualified energy device expired December 31, 2014, Form W-2s). Disregard this line if the credit
business for purposes of the agricultural and is not allowed for a device installed is from a passthrough entity.
commodity processing facility investment on or after January 1, 2015. For a wind
tax credit, multiply the total amount invested energy device only, if the installation of the
during the 2018 tax year by 30% and enter the device commenced before January 1, 2015,
result on this line. The partnership is allowed the credit is allowed if the installation is
no more than $250,000 in total credits for completed before January 1, 2017.
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Line 14 Lines 18 through 20 Line 19. Enter on this line the allowable
Research expense tax credit Nonprofit private school tax credits credit for contributions to qualified nonprofit
A credit is allowed for conducting qualified Tax credits are allowed under N.D.C.C. private high schools.
research in North Dakota. For details, see § 57-38-01.7 for making charitable
N.D.C.C. § 57-38-30.5. Enter the allowable contributions to qualifying nonprofit private Line 20. Enter on this line the allowable
credit on this line. Attach a statement primary, secondary, and higher education credit for contributions to qualified nonprofit
showing the computation of the base schools located in North Dakota. A separate private colleges.
amount and the credit. credit is allowed for each of the three
Line 21 - Angel investor investment
categories of school—primary, secondary, credit
Line 15 and higher education. For each category
Endowment fund tax credit Important! This line is only for credits
of school, the credit equals 50% of the
A tax credit is allowed for making a contributions made to all eligible schools attributable to investments made in qualified
contribution to a qualified endowment fund. within the category. (Note: For a partner businesses by angel funds organized and
For more information, see Schedule QEC (for other than another passthrough entity, certified on or after July 1, 2017.
filers of Forms 38, 40, 58, and 60) Attach additional limitations on the allowable credit If a partnership is a member of a North
Schedule QEC. apply at the partner level.) A partnership Dakota angel fund that is organized and
may elect, on a contribution by contribution certified on or after July 1, 2017, a credit is
Lines 15a and 15b. Enter on these lines the basis, to treat a contribution as having been allowed to the partnership if it participates
applicable amounts from Schedule QEC. made during the 2018 tax year if it is made on in a qualified investment made by the angel
or before the due date, including extensions, fund in a qualified business. The angel fund
Lines 15c and 15d. Enter on these lines for filing the 2018 Form 58. A list of the is required to provide a Participating Angel
an endowment fund credit and the related eligible schools within each of the three Investor Statement to the partnership, which
contribution amount shown on a North categories of schools is provided on page 13. evidences the partnership’s investment. For
Dakota Schedule K-1 received from an estate,
trust, partnership, or S corporation. To qualify, a contribution must be made qualified investments made after June 30,
directly to, or specifically designated for 2017, that fall into the partnership’s 2018
Line 16 the exclusive use of, a qualifying school. tax year, multiply the investment amount
Workforce recruitment tax credit If a contribution is made to an account by the applicable credit rate shown on the
If the partnership employs extraordinary or fund that benefits both qualifying and statement. If a partnership participates in
recruitment methods to hire an employee to nonqualifying schools, it will qualify only more than one qualified investment during
fill a hard-to-fill position in North Dakota, if the donor specifically designates it for the the tax year, calculate the credit separately for
it is allowed a tax credit equal to 5% of the exclusive use of a qualifying school and the each Participating Angel Investor Statement
compensation paid during the first 12 months account or fund separately accounts for the received and add the separately calculated
to the employee hired to fill that position. funds on behalf of the qualifying school. amounts.
The credit may be claimed in the first The donor must obtain a statement from the Enter the credit amount on this line. Do not
taxable year beginning after the employee administrator of the account or fund that enter on this line an angel investor credit
completes the first 12 consecutive months identifies the qualifying school and shows the from a North Dakota Schedule K-1. A
of employment. For details, see N.D.C.C. amount contributed to it. partnership is not allowed to claim an angel
§ 57-38-01.25.
If a contribution is made to a qualifying investor credit from another passthrough
Line 16a. Enter the allowable credit on this school that provides education in one or more entity. See N.D.C.C. § 57-38-01.26 (effective
line. grades in both the primary school category for investments made after June 30, 2017).
Line 16b. Enter the number of eligible (kindergarten through 8th grades) and the Attach a copy of the Participating Angel
employees whose first 12 months of secondary school category (9th through 12th Investor Investment Statement.
employment ended during the partnership’s grades), a separate credit is allowed for the
2017 tax year. portion of the contribution designated for Line 22
the exclusive use of each school category. Professional service partnership
Line 16c. Enter the total compensation paid The donor must obtain a statement from the guaranteed payments
to the eligible employees’ during their first 12 qualifying school that identifies the qualifying Lines 22a through 22c apply only if the
consecutive months of employment ending in school and shows the amount contributed to partnership marked “Yes” to Item H on
the partnership’s 2017 tax year. each category of school. If the donor does page 1 of Form 58. See the instructions to
not obtain a statement showing how the Form 58, page 1, Item H, on page 5.
Line 17
Credit for wages paid to a mobilized contribution is allocated to each category Line 22a. Enter the total guaranteed
employee of school, one-half of the total contribution payments from Federal Form 1065,
Enter on this line the amount from will be deemed to have been made to each Schedule K, line 4.
Schedule ME, line 13. N.D.C.C. § 57-38-31. category of school.
Attach Schedule ME. Line 22b. Enter the portion of the amount on
Line 18. Enter on this line the allowable
credit for contributions to qualified nonprofit line 22a that was made to individual partners
private primary schools. as a reasonable salary for personal services,
regardless of where the services were
performed. Do not include any guaranteed
payments for other than personal services.
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Line 22c. Enter the portion of the amount the partnership must indicate this in the Column 3
on line 22b that was made to nonresident attached statement. Identify the entity type of the partner by
individual partners for personal services entering the applicable code letter as follows:
Line 23a. Enter the total allocable income
performed within North Dakota.
(less related expenses) from all sources within Entity type Code letter
Line 23 and without North Dakota.
Individual ................................ I
Allocable nonbusiness income
Line 23b. Enter the portion of the amount on C corporation ..........................C
Lines 23a and 23b apply only if the
line 23a that is allocable to North Dakota. S corporation ........................... S
partnership meets all of the following:
Partnership .............................. P
• It is a multistate partnership, i.e., it carries Line 24 Estate .......................................E
Disposition of I.R.C. Section 179
on its trade or business activity both within property Trust ........................................T
and without North Dakota. Lines 24a through 24d apply only if the Exempt organization ...............O
• It has one or more nonresident individual, partnership sold, exchanged, or disposed of
estate, or trust partners. property for which an I.R.C. Section 179 Note: A “C corporation” is a corporation
• It has allocable nonbusiness income. deduction was passed through to the partners. that files Federal Form 1120; an “S
Generally, all income received by a Note: The partnership is required to report corporation” is a corporation that files
partnership is considered business this same information on a separate statement Federal Form 1120S; and the “Trust” entity
income unless clearly classifiable as attached to Federal Form 1065, Schedule K, type only applies to a trust that files Federal
nonbusiness income. The classification line 20c. Form 1041 or, in lieu of filing Federal
Form 1041, elects an alternative reporting
of income by the labels used to describe method under the federal income tax
it—for example, interest, dividends, For lines 24a through 24d, multiply the
rents, royalties, operating income, or corresponding combined amount for all regulations.
nonoperating income—is generally not partners as reported on Federal Form 1065, If the partner is a limited liability company
relevant in determining whether income Schedule K, line 20c, by the apportionment (LLC) that is a disregarded entity for federal
is business or nonbusiness income. For factor from Schedule FACT, line 14, and enter income tax purposes or a nominee on Federal
more information, see N.D. Admin. Code the result. However, if the property disposed Schedule K-1, enter the code letter for the
§ 81-03-09-03. of is treated as a nonbusiness asset the gain or type of entity of the entity’s owner. If the LLC
loss from which is subject to allocation under is treated like a C corporation, partnership,
Nonbusiness income is not apportioned using N.D.C.C. §§ 57-38.1-04 through 57-38.1-08, or S corporation, enter the code letter for that
the apportionment factor (from Schedule subtract the amounts for that asset before particular entity type.
FACT) but is allocated within or without multiplying by the apportionment factor.
North Dakota as provided under N.D.C.C. Include the nonbusiness gain or loss from the Column 4
§§ 57-38.1-04 through 57-38.1-08 and N.D. disposition on Form 58, Schedule K, line 23. Enter the partner’s ownership percentage as
Admin. Code § 81-03-09-09. Expenses must provided in the partnership agreement. (This
be attributed to the nonbusiness income in percentage may differ from the partner’s
a manner which fairly distributes all of the Instructions for profit or loss percentage.)
partnership’s expenses to its business and
nonbusiness income. Schedule KP Column 5
(Form 58, page 5) Enter the sum of the following items from the
If the partnership has an item of nonbusiness
partner’s Federal Schedule K-1 (Form 1065),
income subject to allocation, the partnership Schedule KP must be completed to provide Part III:
must take this into account when calculating information about each partner. If the
the North Dakota distributive share of income partnership has more than seven partners, Box 1 Ordinary business income (loss)
or loss reportable on Schedule KP and complete and attach additional schedules as Box 2 Net rental real estate income (loss)
Schedule K-1 (Form 58). See the instructions needed to list all partners. If more than one Box 3 Other net rental income (loss)
to Schedule KP, Column 6, on page 10 for Schedule KP is needed, complete lines 1 Box 4 Guaranteed payments
more information. In addition to completing through 4 on only one of them, and include Box 5 Interest income
lines 23a and 23b, the partnership must attach the combined amount for all of the schedules Box 6a Ordinary dividends
the following to Form 58: on that one schedule. Box 7 Royalties
Box 8 Net short-term capital gain (loss)
• A statement on which each item of
Box 9a Net long-term capital gain (loss)
nonbusiness income is shown along with All Partners
Box 10 Net section 1231 gain (loss)
its related expenses. (Columns 1 through 5) Box 11 Other income (loss)
• A statement explaining the basis for Box 12 Section 179 deduction
treating the item of income as nonbusiness Columns 1 and 2
income subject to allocation. Enter the name, mailing address, and Box 13 Other deductions (In the case of an
partner’s identifying number as shown on the individual, trust, or estate partner,
• If an item of nonbusiness income is partner’s Federal Schedule K-1. If the partner only include deductions that are
allocated to a state other than North is a single member limited liability company allowed as a deduction from gross
Dakota, a copy of that other state’s (LLC) that is a disregarded entity for federal income in calculating adjusted
income tax return must be attached. If income tax purposes, enter the owner’s name, gross income for federal income tax
the partnership is not required to file an address, and identifying number. purposes.)
income tax return with the other state,
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10
Box 20 Include the gain (loss) from
an I.R.C. Section 179 property Worksheet for Schedule KP, Column 6
disposition. For purposes of For nonresident partners and tax-exempt organization partners only—see
calculating the gain or loss, include instructions to Schedule KP, Column 6.
all of the Section 179 deduction 1. Partner’s amount from Schedule KP, Column 5 .............................. 1 _________________
passed through to the partner, 2. Professional service partnership only:
regardless of whether or not the Guaranteed payments for services only
partner actually deducted all of it. included in the amount on line 1 ..................2_________________
3. Allocable income (less related expenses)
included in the amount on line 1 .................. 3_________________
Nonresident Partners and
4. Interest from U.S. obligations included
Tax-Exempt Organization in the amount on line 1 ............................... 4_________________
Partners Only 5. Add lines 2, 3, and 4 ................................................................. 5_________________
(Columns 6 through 8) 6. Apportionable income (loss). Subtract line 5 from line 1 ................ 6_________________
7. Apportionment factor from Schedule FACT, line 14 ......................... 7 __.__ __ __ __ __ __
For purposes of Columns 6 through 8, a 8. Multiply line 6 by line 7 .............................................................. 8 _________________
nonresident partner means:
9. Professional service partnership only: Guaranteed payments
• an individual who is not domiciled in for services performed within North Dakota ........................... 9 _________________
North Dakota; 10. Allocable income (less related expenses) reportable to
North Dakota ....................................................................... 10 _________________
• a trust, including a grantor trust, that is not
organized under North Dakota law. This 11. Add lines 8, 9 and 10. Enter result in Column 6 .......................... 11 _________________
only includes trusts that are subject to
income tax; or • The partnership has an item of Complete Column 8 for each nonresident
nonbusiness income subject to allocation. partner electing to be included in a composite
• a passthrough entity that has a commercial
See the instructions to Form 58, filing. Multiply the amount in Column 6
domicile outside North Dakota. A
Schedule K, line 23, on page 9 for more by 2.90% (.029) and enter the result in
passthrough entity includes a partnership,
information. Column 8. If the amount in Column 6 is
S corporation, limited liability company
treated like a partnership or S corporation, • The amount in Column 5 includes interest zero or less, enter zero in Column 8. See
and any other similar entity. from U.S. obligations. “Composite filing” on page 3 for more
information.
For a tax-exempt organization partner, only Column 7
report its distributive share of North Dakota Nonresident partner only
income in Column 6. Columns 7 and 8 do not If a nonresident partner’s distributive share of Specific line
apply to a tax-exempt organization partner. North Dakota income in Column 6 is $1,000
or more, multiply the amount in Column 6 instructions for
Column 6 by 2.90% (.029) and enter the result in page 1 of Form 58,
Nonresident partner and tax-exempt Column 7. However, the following exceptions
organization partner only
apply: lines 1-12
Complete Column 6 for each nonresident
partner and tax-exempt organization • If a nonresident partner gives you a Complete Schedule FACT,
partner. Except as provided below, multiply completed Form PWA, enter the amount Schedule K, and Schedule KP before
the partner’s amount in Column 5 by the from line 6 of Form PWA in Column 7 and completing lines 1 through 12 on
page 1 of Form 58.
apportionment factor from Schedule FACT, fill in the circle under “Form PWA or Form
line 14, and enter the result in Column 6. PWE.” Line 4
• If a nonresident partner gives you a Income tax withholding
Exception: Complete the Worksheet for completed Form PWE, leave Column 7 Enter the North Dakota income tax
Schedule KP, Column 6 on this page to blank and fill in the circle under withholding shown on a 2018 Form 1099 or
calculate the amount to enter in Column 6 if “Form PWA or Form PWE.” North Dakota Schedule K-1. Be sure the state
any of the following apply: identified on the Form 1099 is North Dakota.
• If a nonresident partner elected to be Also enter the North Dakota income tax
• The partnership is a professional service included in a composite filing, leave withholding shown on a 2017 North Dakota
partnership that made guaranteed Column 7 blank and see the instructions to Schedule K-1 if the entity that issued it has
payments for services performed by Column 8. a fiscal tax year ending in the partnership’s
nonresident individual partners. These 2018 tax year. Do not enter on this line
See “Withholding from nonresident partners”
payments are not apportioned, but are North Dakota extraction or production taxes
on page 3 for more information.
allocated to the state where the services withheld from mineral interest income, such
were performed by the partner. See the Column 8 as an oil or gas royalty, because they are
instructions to Form 58, page 1, Item H, Nonresident partner only not income taxes. Attach a copy of the
on page 5 for more information. Note: Leave Column 8 blank if Column 7 was Form 1099 or North Dakota Schedule K-1.
completed for the nonresident partner.
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11
Line 5 due from the due date of the return to the North Dakota Schedule K-1 (Form 58)
Estimated tax payments earlier of the extended due date or the date must be used by a partnership to provide
Enter the amount paid with the 2018 the return was filed. its partners with information they will need
Forms 58-EXT and 58-ES plus any to complete a North Dakota income tax
• If the total amount of tax due is not paid
overpayment applied from the 2017 Form 58. return. The information to be included in
by the due date (or extended due date) of
However, if filing an amended return, do the schedule will depend on the type of
the return, interest is calculated at the rate
not enter any previously paid estimated tax partner. In the case of certain credits reported
of 1% per month or fraction of a month
amount; instead, enter the amount of the total on Schedule K-1 (Form 58), additional
on the unpaid tax, except for the month in
taxes due from line 3 of the previously filed supporting information must be provided with
which the return was due.
original or amended return. Schedule K-1 — see the instructions to Part 3.
Line 8 Line 12 North Dakota Schedule K-1 (Form 58) must
Application of overpayment to 2019 Balance due
be completed and given to:
If there is an overpayment on line 7, the The balance due must be paid in full with
partnership may elect to apply part or all of the return. The payment may be made • Each nonresident partner for which the
it as an estimated payment toward its 2019 electronically in one of the following ways. partnership is required to report the North
tax liability. To make the election, enter the • Online—A payment may be made online Dakota distributive share of income on
portion of line 7 to be applied on line 8. If this with an electronic check or a debit or Form 58, Schedule KP, Column 6.
election is made, the election and the amount credit card. The electronic check option • Each partner to which a share of a North
applied may not be changed after the return is free. North Dakota contracts with a Dakota adjustment or tax credit from
is filed. If this is an amended return, do not national payment service to provide the Form 58, Schedule K, lines 1 through 21,
make an entry on this line. debit or credit card option. There is a is distributable.
fee for the debit or credit option, none of • Each partnership or corporation partner
Line 10 which goes to the State of North Dakota. for the purpose of reporting a share of
Tax due To pay online, go to the apportionment factors from Form 58,
A tax due must be paid in full with the return www.nd.gov/tax/payment. Schedule FACT.
when the return is filed. See the instructions to
line 12 for payment options. • Electronic funds transfer—A payment • Each tax-exempt organization partner.
may be made by means of an Automated
Line 11 Clearing House (ACH) credit transaction If there are no North Dakota adjustments or
Penalty and interest that the taxpayer initiates through its tax credits on Form 58, Schedule K, lines 1
The Office of State Tax Commissioner will banking institution. For more information, through 21, a North Dakota Schedule K-1
notify the partnership of any penalty and go to our website at www.nd.gov/tax. does not have to be given to a North Dakota
interest payable on a tax due shown on resident individual, estate, or trust.
Form 58. However, the partnership may If paying with a paper check or money order, In addition to the North Dakota Schedule K-1
calculate the penalty and interest amounts and complete a Form 58-PV payment voucher (Form 58), the partnership must provide
include them in the balance due on Form 58. and enclose it with the payment. Make the the partner with a copy of the Partner’s
check or money order payable to “ND State
Penalty. Calculate the penalty amount as Instructions for North Dakota Schedule K-1
Tax Commissioner,” and write the last four
follows: (Form 58).
digits of the partnership’s FEIN and “2018
• If Form 58 is filed by the due date (or Form 58” on the check or money order. A A copy of all North Dakota Schedule K-1
extended due date), but the total amount check must be drawn on a U.S. or Canadian forms must be enclosed with Form 58 along
of tax due is not paid with the return, the bank, be in U.S. dollars, and use a standard with any required supporting statements.
penalty is equal to 5% of the unpaid tax or 9-digit routing number. A check drawn on a Amended schedule. If a partnership files an
$5.00, whichever is greater. foreign bank (except one in Canada) cannot amended Form 58, the partnership must issue
• If Form 58 is filed after its due date be accepted. amended North Dakota Schedule K-1 forms
(or extended due date), and there is an to its partners. Fill in the “Amended” circle
unpaid tax due on it, a penalty equal to at the top of the North Dakota Schedule K-1
5% of the unpaid tax due (with a $5.00 Instructions
(Form 58).
minimum) applies for the month the return for completing Final schedule. Fill in the “Final” circle at
was due, plus 5% of the unpaid tax due
(with a $5.00 minimum) for each month Schedule K-1 the top of the North Dakota Schedule K-1
or fraction of a month the return remains (Form 58) if it is the last one to be issued by
unfiled, not to exceed the greater of 25% of A partnership is not subject to North the partnership to the partner.
the unpaid tax due or $25.00. Dakota income tax. Instead, the partners are
responsible for reporting and paying any Part 2
Interest. Calculate the interest amount as applicable North Dakota income tax on their Partner information
follows: shares of the partnership’s income reportable
• If an extension of time to file Form 58 was to North Dakota. Item E
obtained, extension interest is calculated Enter the code letter for the partner from
at the rate of 12% per year on any tax Form 58, Schedule KP, Column 3.
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Item F Line 15. Provide a statement identifying Exception 2: Allocable nonbusiness
If the partner is an individual, estate, or trust, the qualified nonprofit organization and income. If the partnership treated any part
fill in the applicable circle to indicate the the qualified endowment fund to which the of a distributable item of income from
legal residency status of the partner for North qualifying contribution was made. the partner’s Federal Schedule K-1 as
Dakota income tax purposes. If an individual nonbusiness income subject to allocation,
Line 21. Provide a statement identifying the
partner changed his or her legal residency to calculate the amount to enter on the
angel fund that made the qualified investment
or from North Dakota during the tax year, corresponding line of this part in the
in the qualified business.
mark the part-year resident status. In the case following steps:
of an estate or trust partner, only the full-year
resident or full-year nonresident status will Part 4 1. Subtract the net nonbusiness income
apply. Nonresident individual, (gross amount less related expenses)
from the applicable distributable amount
estate, or trust partner shown on the Federal Schedule K-1.
Item G only— North Dakota income
For an eligible nonresident partner, indicate 2. Multiply the remaining distributive
(loss)
whether the partner is included in a composite amount, if any, (from step 1) by the
Complete Part 4 for a nonresident individual,
filing by filling in the applicable circle. partnership’s apportionment factor from
estate, or trust partner. Schedule FACT, line 14.
Item I
Line 22 3. Add the result (from step 2) to the
Enter the partner’s ownership percentage Partnership’s apportionment factor portion, if any, of the net nonbusiness
from Form 58, Schedule KP, Column 4. Enter the partnership’s apportionment factor income allocable to North Dakota, and
from Form 58, Schedule FACT, line 14. enter the result on the corresponding line
Part 3 of Part 4.
All partners— Lines 23 through 36
Income and loss items Note: If any portion of the net nonbusiness
North Dakota adjustments Except as provided under Exceptions 1 income removed from the distributable
and tax credits through 3 below, multiply the corresponding amount (in step 1 above) is allocable outside
If there are any North Dakota adjustments or amount from the partner’s Federal North Dakota, do not enter it anywhere on
tax credits on Form 58, Schedule K, lines 1 Schedule K-1, Part III, boxes 1 through 13, North Dakota Schedule K-1 (Form 58).
through 21, complete this part for all partners. and any I.R.C. § 179 property disposition
gain (loss) included in box 20 by the If the calculation of any amount on lines 23
Lines 1 and 2 through 36 of Part 4 was affected by the
partnership’s apportionment factor from
Enter on the corresponding lines the amount removal or inclusion of net nonbusiness
Schedule FACT, line 14, and enter the result
determined by multiplying each amount income, attach a statement to the partner’s
on the corresponding line of Part 4, lines 23
shown on Form 58, Schedule K, lines 1 and 2, North Dakota Schedule K-1 (Form 58)
through 36.
by the same percentage used to determine the identifying the net nonbusiness income and
partner’s distributive share of income (loss) For “Other deductions” from box 13 showing the calculation of the amount entered
from the partnership. of Federal Schedule K-1, only include on the applicable line(s) of Part 4.
deductions that are allowed as a deduction
Lines 3 through 5 from gross income in calculating adjusted Exception 3: Interest from U.S. obligations.
Enter on the corresponding lines the partner’s gross income for federal income tax purposes. Do not include interest from U.S. obligations
share of each amount shown on Form 58, in determining the amount to enter on Part 4,
For purposes of calculating the gain or
Schedule K, lines 3 through 5. line 27.
loss for I.R.C. § 179 property dispositions
included in box 20 of Federal Schedule K-1,
Line 6 Part 5
include all of the Section 179 deduction
Enter on this line the amount determined Nonresident partner and
passed through to the partner, regardless of
by multiplying the amount on Form 58, tax-exempt organization
whether or not the partner actually deducted
Schedule K, line 6, by the same percentage
all of it. partner only
used to determine the partner’s distributive
Complete Part 5 for a nonresident partner and
share of income (loss) from the partnership. Exception 1: Professional service a tax-exempt organization partner for which
partnership. If the partnership is a an amount was required to be entered on
Lines 7 through 21 professional service partnership, calculate Form 58, Schedule KP, Column 6.
Enter on the corresponding lines the the amount to enter on line 26 (guaranteed
partner’s share of each amount shown on payments) by adding the following two Line 37
Form 58, Schedule K, lines 7 through 21. amounts: ND distributive share of income
Also, for the following lines, additional (loss)
supporting information must be provided with • Guaranteed payments for services Enter the partner’s North Dakota distributive
Schedule K-1: performed within North Dakota by the share of income (loss) from Form 58,
partner. Schedule KP, Column 6.
Lines 8 and 9. Provide a statement
• Guaranteed payments for other than
identifying the qualified business or qualified
personal services multiplied by the
agricultural commodity processing facility in
partnership’s apportionment factor from
which the qualifying investment was made.
Schedule FACT, line 14.
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Line 38
ND income tax withheld Qualified nonprofit private schools
Enter the amount of North Dakota income (for Form 58, Schedule K, lines 18 through 20)
tax withheld from the partner’s North Dakota
For purposes of the credits on Form 58, Schedule K, lines 18 through 20, the following lists the
distributive share of income from Form 58,
qualifying schools in each school category. (Note: These lists are subject to change.)
Schedule KP, Column 7.
Line 39 Primary Schools (Grades K through 8)
ND composite income tax Academy for Children (Fargo) Ojibwa Indian School (Belcourt)
Enter the amount of North Dakota composite Anne Carlsen Center (Jamestown) Our Redeemer’s Christian School (Minot)
income tax on the partner’s North Dakota Bishop Ryan Catholic School (Minot) Prairie Learning Education Center (Raleigh)
distributive share of income from Form 58, Brentwood Adventist Christian School Prairie Voyager Adventist School
Schedule KP, Column 8. (Bismarck) (Grand Forks)
Cathedral of the Holy Spirit Elementary School Red River Adventist Elementary School
Part 6 (Bismarck) (Fargo)
Children’s Montessori Center (Fargo) Shanley High-Sullivan Middle School (Fargo)
Partnership or corporation Christ the King Elementary School (Mandan) Shiloh Christian School (Bismarck)
partner only Dakota Memorial School (Minot) St Alphonsus Elementary School (Langdon)
Complete Part 6 for a partner that is a Dakota Montessori School (Fargo) St Anne Elementary School (Bismarck)
partnership, corporation, or other entity Forest River School (Fordville) St Ann’s Catholic School (Belcourt)
treated like a partnership or corporation. Grace Lutheran Elementary School (Fargo) St Bernard Mission School (Fort Yates)
Grand Forks Montessori Academy St Catherine Elementary School (Valley City)
Line 40 (Grand Forks) St John’s Academy (Jamestown)
North Dakota factors Hillcrest SDA School (Jamestown) St John’s Elementary School (Wahpeton)
Enter in the corresponding column the Holy Family – St. Mary’s Elementary School St Joseph Elementary School (Mandan)
partner’s share of the partnership’s North (Grand Forks) St Joseph Elementary School (Devils Lake)
Dakota apportionment factor amounts from Holy Spirit Elementary School (Fargo) St Joseph’s Elementary School (Williston)
Form 58, Schedule FACT, Column 2, lines 7, Hope Christian Academy (Dickinson) St. Mary’s Academy (Bismarck)
8, and 12. Invitation Hill Adventist School (Dickinson) St Mary’s Elementary School (Bismarck)
Johnson Corners Christian Academy St Michael’s Elementary School (Grand Forks)
Line 41 (Watford City) The Innovation School (Bismarck)
Total factors Little Flower Elementary School (Rugby) Trinity Elementary East School (Dickinson)
Enter in the corresponding column the Martin Luther School (Bismarck) Trinity Elementary North School (Dickinson)
partner’s share of the partnership’s total factor Missouri Valley Montessori School (Bismarck) Trinity Elementary School (West Fargo)
amounts from Form 58, Schedule FACT, Nativity Elementary School (Fargo) Trinity Elementary West School (Dickinson)
Column 1, lines 7, 8, and 12. New Testament Baptist Christian School Trinity Jr/High High School (Dickinson)
(Larimore) Victory Christian School (Jamestown)
Oak Grove Lutheran Elementary School Wichakini Owayawa Elementary School
Before you file (Fargo) (Fort Yates)
Williston Trinity Christian School (Williston)
Form 58
High Schools (Grades 9 through 12)
Signatures
Anne Carlsen Center (Jamestown) Oak Grove Lutheran High School (Fargo)
The return must be signed and dated
Bishop Ryan Catholic School (Minot) Our Redeemer’s Christian School (Minot)
by a general partner or an authorized
Dakota Adventist Academy (Bismarck) Prairie Learning Education Center (Raleigh)
representative of the partnership. Dakota Memorial School (Minot) Shanley High-Sullivan High School (Fargo)
If the partnership pays someone other than Hope Christian Academy (Dickinson) Shiloh Christian School (Bismarck)
one of its partners or an employee of the Johnson Corners Christian Academy St Mary’s Central High School (Bismarck)
partnership to prepare the return, the paid (Watford City) Trinity Jr/High School (Dickinson)
preparer also must sign and date the return. New Testament Baptist Christian School Williston Trinity Christian School (Williston)
(Larimore)
Preparer authorization check-off
Colleges (Education above 12th grade)
The partnership may authorize the North
Jamestown College (Jamestown) United Tribes Technical College (Bismarck)
Dakota Office of State Tax Commissioner University of Mary (Bismarck)
Trinity Bible College (Ellendale)
(Tax Department) to discuss matters Turtle Mountain Community College ND Independent College Fund (Bismarck)
pertaining to its 2018 Form 58 with the (Belcourt)
preparer who signed it. To do so, fill in the
circle next to the signature area in the lower It does not apply to the firm, if any, shown in processing of the partnership’s return. It
right-hand corner of page 1 of Form 58. This that section. also authorizes the preparer to respond to
authorization applies only to the individual questions and to provide any information
whose signature and printed name appear in This authorization allows the Tax Department
missing from the return, to contact the Tax
the paid preparer section of the signature area. to contact the preparer to answer any
Department to inquire about the status of
questions that may arise during the
the return’s processing and related refund or
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payment, and to respond to Tax Department This authorization does not authorize the Assembling a paper return
notices that the partnership shares with the preparer to receive a refund check, to bind Please assemble Form 58 and its required
preparer pertaining to math errors or return the partnership in any way (including any attachments in the following order:
preparation. (Tax Department notices will be additional tax liability), or to represent the
1. Form 58.
sent only to the partnership.) partnership before the Tax Department for
2. Schedule FACT.
any other purpose.
This authorization automatically expires on 3. Schedule K.
the due date (including extensions) for filing 4. Schedule KP.
the 2019 Form 58. 5. Schedule QEC.
6. North Dakota Schedule K-1 forms.
7. Required supporting statements.
8. Complete copy of Form 1065 including
Federal Schedule K-1 forms.
A balance due may be paid electronically
(see page 11 of these instructions). If paying
with a paper check, enclose the check and
a Form 58-PV payment voucher with the
return.
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