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                                                  2021

                                          NORTH DAKOTA

                             FIDUCIARY INCOME TAX

                                                  FORM 38

                                          Includes: Form 38 (Pages 1-3)

                                                  Schedule K-1

Photo credit: 
ND Tourism

          Tax forms, guidelines, FAQs, and more 
          are available at www.nd.gov/tax.

          Email questions to individualtax@nd.gov.

                                          RYAN RAUSCHENBERGER

                                                  Tax Commissioner

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Contents                                                                                               Need help?
Where to get help and forms ........................................................ This page         You can download forms and find other 
                                                                                                       information on our website at:
Changes for 2021 ................................................................................... 1
                                                                                                               www.nd.gov/tax
General instructions ................................................................................2
                                                                                                       Email
  Who must file .....................................................................................2
                                                                                                       Individual, estate and trust income 
  When and where to file ........................................................................    2 tax—
  Extension of time to file .......................................................................  3   individualtax@nd.gov
  Penalty and interest ............................................................................  3
  Estimated tax requirement (for 2022 tax year) .......................................              3 Call
  Withholding from nonresident beneficiary ...............................................           3   Questions      701-328-1258
  Composite filing ..................................................................................4   Forms          701-328-1243
  Correcting a previously filed return ........................................................      4 Speech/hearing impaired
  Reporting federal changes ....................................................................     4   TDD            800-366-6888
  W-2/1099 reporting requirement ..........................................................          4
                                                                                                       Write
  Disclosure notification .........................................................................  4 Office of State Tax Commissioner
  Use of information ..............................................................................5   600 E. Boulevard Ave., Dept. 127
General instructions for completing Form 38 ..............................................5            Bismarck, ND 58505-0599
Specific line instructions ..........................................................................5
                                                                                                       Walk-in or appointment 
  Form 38, Page 1, Items A-H .................................................................5        service
  Tax Computation Schedule ...................................................................6        State Capitol Building, 8th Floor
  Schedule BI .......................................................................................8 600 E. Boulevard Ave., Bismarck, ND
  Schedule CR .......................................................................................9 Monday through Friday
  Form 38, Page 1, Lines 1-17 .................................................................9       8:00 a.m. to 5:00 p.m.
                                                                                                       (except holidays)
  Schedule K-1 .................................................................................... 10
  Before you file Form 38 ..................................................................... 11     Walk-ins are welcome. To assure 
                                                                                                       availability and promptness of 
                                                                                                       service, call in advance to make an 
Required forms                                                                                         appointment.

The following forms are needed to complete Form 38:
 Form 38                   Fiduciary return (3 pages)
 Schedule K-1              Beneficiary’s share of North Dakota income (loss),     
                             deductions, adjustments, credits, and other items
The following forms may be needed:
 Form 38-TC                Tax credits
 Form 38-EXT               Fiduciary extension payment voucher
 Schedule 38-UT            Underpayment or late  payment of estimated income 
                           tax
 Form 101                  Application for extension of time to file a North Dakota    
                             income tax return                                                         Privacy Act Notification
 Form PWA                  Passthrough entity withholding adjustment                                   In compliance with the Privacy Act of 1974, 
 Form PWE                  Nonresident passthrough entity member exemption                             disclosure of a social security number or 
                             and certification                                                         Federal Employer Identification Number 
                                                                                                       (FEIN) on this form is required under 
                                                                                                       N.D.C.C. §§ 57-01-15 and 57-38-31, and 
Download these forms from our website at www.nd.gov/tax.                                               will be used for tax reporting, identification, 
                                                                                                       and administration of North Dakota tax laws. 
                                                                                                       Disclosure is mandatory. Failure to provide 
                                                                                                       the social security number or FEIN may delay 
                    Taxpayer Bill of Rights                                                            or prevent the processing of this form.
 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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                                                                                                                                         1

Changes affecting estates and trusts
Developments, updates, and items of interest relating to estate and trust income tax

New Form 38 efiling                              sending an email to withhold@nd.gov or      and 2022—after which the changes will 
requirement                                      calling 701-328-1248.                       expire, and the law will revert to how it 
House Bill 1082 passed by the 2021                                                           read prior to 2019.
North Dakota Legislature requires a              Changes to employer 
partnership, S corporation, trust, or other      withholding return and                      To qualify for the credit, an employer 
passthrough entity with 10 or more owners        payment requirements                        must apply for and obtain from the North 
(or beneficiaries, if a trust) to file its North House Bill 1082 passed by the 2021          Dakota Department of Human Services, 
Dakota income tax return and pay any tax         North Dakota Legislature made the           Vocational Rehabilitation Division, a 
due on it by electronic means. This new          following changes affecting the income      letter certifying that the individual has a 
requirement applies to returns filed for tax     tax withholding return and payment          severe developmental or mental disability, 
years 2022 and after; it does not apply to       requirements for employers:                 is eligible for the agency’s services, 
the 2021 tax year. For more information                                                      and requires customized or supported 
                                                  Effective for calendar years 2022 and 
about electronic filing of the North Dakota                                                  employment to become employed.  See 
                                                  after, an employer may file Form 306, 
partnership return (Form 58), S corporation                                                  Schedule 38-TC, line 19.
                                                  Income Tax Withholding Return, on an 
return (Form 60), or fiduciary return 
                                                  annual basis instead of quarterly if the 
(Form 38), go to www.nd.gov/tax and click                                                    Permanent extension of 2019 
                                                  amount of North Dakota income tax 
on For Businesses>E-File.                                                                    changes to nonprofit private 
                                                  withheld in the previous calendar year 
                                                                                             school credits
                                                  was less than $1,000. This is a $500 
Change to efiling requirement                                                                In 2019, the North Dakota Legislature 
                                                  increase in the threshold applicable to 
                                                                                             expanded the income tax credits for making 
for W-2s and 1099s                                calendar years before 2022.
House Bill 1082 passed by the 2021                                                           a contribution to nonprofit private primary 
North Dakota Legislature changed the               Effective for calendar years 2022        schools, high schools, and colleges in 
law governing the electronic filing of            and after, Form 306, Income Tax            North Dakota. Eligibility for the credit 
Forms W-2 and 1099 by businesses.                 Withholding Return, and the tax due        was extended to individuals who make 
For calendar years 2019 through 2021,             on it must be submitted electronically     direct contributions (under pre-2019 law, 
businesses that are required to file              on a quarterly basis if the amount of      individuals could only claim the credits 
Forms W-2 and 1099 must file them                 North Dakota income tax withheld in the    if received from an estate, trust or other 
electronically if filing 10 or more. Starting     previous calendar year was $1,000 or       passthrough entity). In addition, the amount 
with Forms W-2 and 1099 filed for the             more.                                      of the tax liability that could be reduced by 
2022 calendar year, which are due January                                                    the credits was increased from 20% to 25%. 
31, 2023, all Forms W-2 and 1099 must be         For questions and assistance, contact the   The 2019 changes were effective only for 
filed electronically.                            Office of State Tax Commissioner by         the 2019 and 2020 tax years.
                                                 sending an email to withhold@nd.gov or 
Electronically filing these forms can easily     by calling 701-328-1248.                    House Bill 1137 passed by the 2021 North 
be done in one of the following ways:                                                        Dakota Legislature reinstated the 2019 
                                                 2-year extension of 2019                    changes on a permanent basis, making 
 Taxpayer Access Point (TAP)                                                                them effective for tax years 2021 and after. 
                                                 changes to disabled 
  File them online through the Office                                                        In addition, the amount of the tax liability 
                                                 employment credit
  of State Tax Commissioner’s website                                                        that may be reduced by the credits was 
                                                 In 2019, the North Dakota Legislature 
  by going to ND TAP and following                                                           increased from 25% to 50%. See Schedule 
                                                 expanded the income tax credit for hiring 
  the instructions. If a business does not                                                   38-TC, lines 15, 16 and 17.
                                                 a qualifying developmentally disabled 
  already have a TAP account, select 
                                                 or mentally ill individual. Eligibility for 
  “Sign Up For Access.”
                                                 the credit was extended to all taxpayers    Staying on top of 
 Third-party accounting software                (not just C corporations), the credit rate  developments
  A business may be able to electronically       was increased from 5% to 25%, and the       Businesses or other interested persons may 
  file Forms W-2 and 1099 with North             wages on which the credit is allowed was    sign up to receive email notifications when 
  Dakota through a third-party software,         changed from the first $6,000 paid in the   a newsletter or other important information 
  such as Quickbooks. A business should          first 12 months of employment to the first  is issued by the Office of State Tax 
  check its accounting software or contact       $6,000 paid annually. The 2019 changes      Commissioner. There is a separate update 
  the accounting software provider to see        were effective only for the 2019 and 2020   list for each tax type administered by the 
  if it provides this feature.                   tax years.                                  Tax Commissioner. To sign up, go to
                                                                                             www.nd.gov/tax and click on “Subscribe” 
For questions and assistance, contact the        House Bill 1405 passed by the 2021 North    under “Email Updates” in the lower left-
Office of State Tax Commissioner by              Dakota Legislature reinstated the 2019      hand side of the web page.
                                                 changes for two additional tax years—2021

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Form 38 Instructions 2021
North Dakota Fiduciary 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 administrative rules.

• Rental income from real and tangible The unrelated business taxable income is
General personal property located in North Dakota. reportable to North Dakota if the trust is a
instructions • Royalties, bonus or lease payments, and North Dakota resident trust or, in the case of
other income from an interest in oil, gas, a nonresident trust, the unrelated business
coal, or other minerals located in North taxable income has a source in North Dakota.
Who must file Dakota.
• Gain from the sale, exchange, or other Bankruptcy estate
Resident estate or trust disposition of real and tangible personal A fiduciary that is required to file a 2021
A fiduciary for a resident estate or trust must property located in North Dakota. Form 38 for a bankruptcy estate must file it in
file a 2021 Form 38, Fiduciary Income Tax • Income from a sole proprietorship, a manner similar to how the 2021 Form 1041
Return, if the fiduciary is required to file a partnership, S corporation, or other trade is filed. Use Form 38 only as a transmittal
2021 Form 1041, U.S. Income Tax Return for or business carried on in North Dakota. form for Form ND-1, Individual Income Tax
Estates and Trusts. This includes farming and ranching Return. In the top margin of Form ND-1,
operations. write “Attachment to Form 38.” Complete
A fiduciary for a resident estate or trust is • Income from gambling activity carried on and attach Form ND-1 to Form 38. Complete
generally subject to the same law provisions in North Dakota. Items A through H at the top of Form 38.
that apply to a resident individual. The entire • Income from another estate or trust Enter on Form 38, page 1, line 7, the net tax
income (loss) of a resident estate or trust consisting of the same kinds of income liability from Form ND-1, page 2, line 25.
is reportable to North Dakota regardless of listed above. Then complete lines 8 through 17 on page 1
its source. An estate or trust is considered of Form 38 as required.
a resident if it has a relationship to North For a nonresident estate or trust, gross income
Dakota that is sufficient to create nexus for from North Dakota sources generally does Disaster recovery tax exemptions
income tax purposes. See N.D. Admin. Code not include interest, dividends, pensions, Exemptions from state and local tax filing
§ 81-03-02.1-04 for more information. annuities, or income and gain from intangible and payment obligations are available to
property. However, interest, dividends, gains, out-of-state businesses and their employees
Nonresident estate or trust and other income from intangible property are who are in North Dakota on a temporary basis
A fiduciary for a nonresident estate or trust included in gross income from North Dakota for the sole purpose of repairing or replacing
must file a 2021 Form 38, Fiduciary Income sources if derived from a trade or business natural gas, electrical, or telecommunication
Tax Return, if both of the following apply: carried on in North Dakota. transmission property that is damaged, or
under threat of damage, from a state- or
• The fiduciary is required to file a 2021 Grantor trust presidentially-declared disaster or emergency.
Form 1041, U.S. Income Tax Return for A grantor trust is required to file a 2021 For more information, go to www.nd.gov/tax.
Estates and Trusts. Form 38, Fiduciary Income Tax Return, if the
grantor is required to file a 2021 Form 1041, When and where to file
• The estate or trust derived any gross U.S. Income Tax Return for Estates and The 2021 Form 38 must be filed on or before
income from North Dakota sources during Trusts. This applies even if a grantor trust (1) April 15, 2022, if filing for the 2021
the 2021 tax year. elects to use an alternative filing method calendar year, or (2) the 15th day of the 4th
A fiduciary for a nonresident estate or trust is under the federal income tax regulations in month following the end of the tax year,
generally subject to the same law provisions lieu of filing a Form 1041. See the specific if filing for a fiscal year beginning in the
that apply to a nonresident individual. Only line instructions for Form 38 (page 1), 2021 calendar year. If the due date falls on a
the portion of the nonresident estate’s or Schedule BI, and Schedule K-1 for special Saturday, Sunday, or holiday, the return may
trust’s gross income from North Dakota instructions that apply to a grantor trust. be filed on or before the next day that is not a
sources is reportable to North Dakota. Tax-exempt trust Saturday, Sunday, or holiday.
For a nonresident estate or trust, gross income A fiduciary for a trust that is tax-exempt under Note: Use the 2020 Form 38 if filing for a
from North Dakota sources includes the Internal Revenue Code § 501(a) must file a fiscal year beginning in the 2020 calendar
following: 2021 Form 38 if (1) the fiduciary is required year.
to file a 2021 Form 1041 or Form 990-T
• Compensation, including unemployment to report the trust’s unrelated business Mail Form 38 and all required attachments to:
compensation, received by an estate based taxable income, (2) the federal income tax Office of State Tax Commissioner
on services performed in North Dakota by is calculated using the tax rates applicable 600 East Boulevard Ave., Dept. 127
a decedent. to a trust, and (3) the unrelated business Bismarck, ND 58505-0599
taxable income is reportable to North Dakota.

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Extension of time to file Penalty and interest for the 2022 tax year.Note: Do not
An extension of time to file Form 38 may be The tax due must be paid by the due date include income tax withholding from
obtained in one of the following ways: (without extension) of Form 38 to avoid nonresident individual beneficiaries or
penalty and interest charges. However, if composite income tax in this estimation.
• Obtain a federal extension.
an extension of time to file Form 38 was 4. The fiduciary expects North Dakota
• Separately apply for a North Dakota obtained, the tax due may be paid by the income tax withholding (other than
extension. extended due date of the return without income tax withholding from nonresident
penalty, but extension interest will apply—see
Federal extension. If an extension of time to individual beneficiaries) for the 2022 tax
“Extension interest” and “Prepayment of tax
file Form 1041 is obtained, it is automatically year to be less than the smaller of:
due” on this page.
accepted as an extension of time to file a. 90% of the North Dakota net income
Form 38. The extended due date for North If Form 38 is filed on or before its due date tax liability on the fiduciary’s taxable
Dakota purposes is the same as the federal (or extended due date), but all of the tax due income for the 2022 tax year.
extended due date. A separate North Dakota is not paid by the due date (or extended date), Note: Substitute 66 2/3% if a qualified
extension does not have to be applied for, nor a penalty equal to 5% of the unpaid tax due or farmer. See instructions for 2022
does the Office of State Tax Commissioner $5.00, whichever is greater, must be paid. Form 38-ES.
have to be notified that a federal extension has
been obtained prior to filing Form 38. If Form 38 is not filed on or before its due b. 100% of the North Dakota net income
date (or extended due date), and there is an tax liability on fiduciary’s taxable
North Dakota extension. If a federal unpaid tax due on it, a penalty equal to 5% income for the 2021 tax year (as
extension is not obtained, but additional of the unpaid tax due or $5.00, whichever is shown on the 2021 Form 38, page 1,
time is needed to complete and file Form 38, greater, for the month the return was due plus line 4). Note: If the estate or trust was
a separate North Dakota extension may be 5% of the unpaid tax due for each additional not in existence for the entire 2021
applied for by filing Form 101, Application month (or fraction of a month) during which tax year, this part does not apply;
for Extension of Time to File a North the return remains delinquent must be paid. the 90% threshold in part a must be
Dakota Tax Return. This is not an automatic This penalty may not exceed 25% of the tax applied.
extension—there must be good cause to due.
In general, one-fourth (25%) of the total
request a North Dakota extension. Form 101 In addition to any penalty, interest must be estimated tax required to be paid for the
must be postmarked on or before the due paid at the rate of 1% per month or fraction 2022 tax year must be paid by April 15,
date of Form 38. Notification of whether of a month, except for the month in which June 15, and September 15, 2022, and
the extension is accepted or rejected will the tax was due, on any tax due that remains January 15, 2023. For more information,
be provided by the Office of State Tax unpaid after the return’s due date. including payment options, obtain the 2022
Commissioner. Form 38-ES.
Extension interest. If Form 38 is filed on Estimated tax requirement
or before the extended due date, and any tax (for 2022) Withholding from nonresident
due is paid with the return, no penalty will A fiduciary for an estate or trust must pay beneficiary
be charged. Interest on the tax due will be estimated North Dakota income tax for the If a trust is required to file Form 38, the
charged at the rate of 12% per year from the 2022 tax year if all four of the following trust must withhold North Dakota income
original due date of the return to the earlier conditions apply: tax at the rate of 2.90% from the year-end
of the date the return is filed or the extended 1. The fiduciary is required to pay estimated distributive share of North Dakota income of
due date. federal income tax for the 2022 tax year. a nonresident beneficiary.
Prepayment of tax due. If an extension This condition applies whether or not Nonresident beneficiary. For this purpose, a
of time to file Form 38 is obtained, any the fiduciary actually makes the required nonresident beneficiary is defined as:
tax expected to be due may be paid on or payment(s) of estimated tax to the
• an individual domiciled outside North
before the regular due date to avoid paying Internal Revenue Service.
Dakota,
extension interest. For more information, 2. The North Dakota net income tax liability • a trust legally organized outside North
including payment options, obtain the on the fiduciary’s taxable income for the Dakota, or
2021 Form 38-EXT. Alternatively, a check 2021 tax year (as shown on the 2021
• a partnership, S corporation, or other
or money order may be sent with a letter Form 38, page 1, line 4) was equal to or
passthrough entity with a commercial
containing the following: (1) name of estate more than $1,000. Note: If the fiduciary
domicile outside North Dakota.
or trust; (2) estate’s or trust’s FEIN; (3) was not required to file a North Dakota
fiduciary’s name, address and phone number; income tax return for the 2021 tax year, A nonresident beneficiary includes the grantor
and (4) statement that the payment is a 2021 the fiduciary’s net tax liability is zero for of a grantor trust if the grantor meets the
Form 38-EXT payment. purposes of this condition. definition of a nonresident beneficiary.
3. The fiduciary expects to owe (after Exemption from withholding. This
subtracting any estimated North Dakota withholding requirement does not apply to a
income tax withholding) North Dakota nonresident beneficiary if:
income tax equal to or more than $1,000

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4

•  the beneficiary’s distributive share of      •  The beneficiary’s only source of income     Schedule CR, if applicable. Then 
North Dakota income is less than $1,000,        within North Dakota is one or more             complete lines 1 through 7 on page 1 of 
•  the beneficiary elects to include the        passthrough entities. A passthrough entity     Form 38.
distributive share of North Dakota income       includes a trust, partnership, S corporation,  5.  Leave line 8 on page 1 of Form 38 blank 
in a composite filing (see “Composite           limited liability company treated like a       unless claiming an additional amount not 
filing” on this page), or                       partnership or S corporation, and any other    previously claimed.
                                                similar entity.
•  the beneficiary is a passthrough entity that                                                6.  On line 9 of page 1 of Form 38, enter the 
elects exemption from the withholding           •  The beneficiary elects to be included in a  total taxes due from the previously filed 
requirement. Obtain Form PWE for more           composite filing. An election is indicated     2021 Form 38, page 1, line 7. If the total 
information.                                    by the trust’s calculation and reporting of a  taxes due have not been fully paid, only 
                                                tax amount for the beneficiary on Form 38,     enter the amount paid.
Withholding procedure. This withholding         Schedule BI, Column 7. If the distributive 
                                                                                               7.  Complete lines 10 through 16 of page 1 
requirement applies to the year-end             share is a loss, the tax is zero.
distributive share of North Dakota income,                                                     of Form 38. If there is an overpayment on 
which is determined at the end of the           The distributive share of North Dakota         line 11, enter the full amount on line 13. 
trust’s tax year and reported on Form 38,       income included in a composite return is       On an amended return, the amount 
Schedule BI, Column 5. The requirement          subject to tax even if it is under $1,000.     credited to the next year’s estimated 
                                                                                               tax (line 12) may not be increased or 
does not apply to actual distributions made     Composite filing method procedure. 
                                                                                               decreased.
during the tax year. The withholding amount     The tax under the composite filing method 
is calculated and reported on Schedule BI,      is calculated and reported on Form 38,         8.  Attach a statement explaining the 
Column 6. If certain conditions are met, an     Schedule BI, Column 7. A payment for the       reason(s) for filing the amended return. If 
amount less than the amount calculated at       total tax amount reported on Schedule BI,      it is because of changes the fiduciary or 
the 2.90% tax rate may be withheld. For the     Column 7, must be submitted with Form 38       the Internal Revenue Service (IRS) made 
qualifying conditions, see Form PWA. A          when it is filed.                              to the 2021 Federal Form 1041, attach a 
payment for the total amount of withholding                                                    copy of the amended federal return or IRS 
reported on Schedule BI, Column 6, must be      Correcting a previously filed                  notice.
submitted with Form 38 when it is filed.        return                                         9.  Complete and provide a corrected North 
                                                If a fiduciary needs to correct an error on    Dakota Schedule K-1 to the beneficiaries, 
Composite filing                                Form 38 after it is filed, the fiduciary must  as required.
A composite filing method is available to a     file an amended return. There is no special 
trust with one or more eligible nonresident     form for this purpose. See “How to prepare an  Reporting federal changes
beneficiaries. Under this method, a trust       amended 2021 return” below.                    If the Internal Revenue Service (IRS) changes 
calculates the North Dakota income tax on the                                                  Federal Form 1041, or if a fiduciary files an 
year-end distributive share of North Dakota     If a fiduciary paid too much tax because of    amended Federal Form 1041, an amended 
income of an eligible nonresident beneficiary   an error on the 2021 Form 38, the fiduciary    North Dakota Form 38 must be filed within 
and pays the tax with Form 38. The tax is       generally has three years from the due date    ninety days after the final determination of 
calculated at the highest individual income     (excluding extensions) of the return or the    the IRS changes or the filing of the amended 
tax rate (which is 2.90% for the 2020 tax       date the return was actually filed, whichever  federal return. Enclose a copy of the IRS 
year), and no adjustments, deductions, or tax   is later, in which to file an amended return   audit report or the amended federal return 
credits are allowed in calculating the tax. A   to claim a refund of the overpayment. See      with the amended North Dakota Form 38.
composite filing satisfies the North Dakota     N.D.C.C. § 57-38-40 for other time periods 
income tax filing and payment obligations of    that may apply.
                                                                                               W-2/1099 reporting
the eligible nonresident beneficiaries included How to prepare an amended 2021 return          requirement
in it, which means they do not have to                                                         Every fiduciary that is required to file Federal 
separately file their own North Dakota income   1.  Obtain a blank 2021 Form 38.
                                                                                               Form 1099 or W-2 may also have to file one 
tax returns. The composite filing method is     2.  Enter the name of the estate or trust, and with the Office of State Tax Commissioner. 
optional and does not require prior approval    the fiduciary’s name, current address,         For more information, obtain the guideline 
from the Office of State Tax Commissioner,      FEIN, etc., in the top portion of page 1 of    Income Tax Withholding and see “Annual 
and a choice to use it may be made on a year-   Form 38.                                       Filing Requirements—W-2 and 1099.”
to-year basis.                                  3.  Fill in the “Amended return” circle at the 
Eligible nonresident beneficiary. A             top of page 1 of Form 38.                      Disclosure notification
nonresident beneficiary (as defined under       4.  Complete the Tax Computation Schedule      Upon written request from the chairman of a 
“Withholding from nonresident beneficiary”      and Schedule BI using the corrected            North Dakota legislative standing committee 
on page 3) is eligible to be included in a      information. However, unless there is          or Legislative Management, the law requires 
composite filing if both of the following       an increase in the amount reported on          the Office of State Tax Commissioner to 
apply:                                          Schedule BI, Column 5, of the amended          disclose the amount of any deduction or 
                                                return, enter on Schedule BI, Column 6,        credit claimed on a tax return. Any other 
                                                the same amount reported on the                confidential information, such as a taxpayer’s 
                                                previously filed return. Also complete         name or federal employer identification 
                                                                                               number, may not be disclosed.

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Use of information Item F
All of the information on Form 38 and its Specific line Residency status
Fill in the applicable circle to indicate the
attachments is confidential by law and cannot instructions for
be given to others except as provided by residency status of the estate or trust. See
state law. Information about the beneficiaries page 1 of Form 38, “Resident estate or trust” under “Who must
is required under state law so the Office of file” on page 2 for more information.
State Tax Commissioner can determine the Items A-H
Item G
beneficiary’s correct North Dakota taxable Complete Items A through H at Entity type
income and verify if the beneficiary has filed the top of page 1 of Form 38. Then
a return and paid the tax. complete the Tax Computation If Federal Form 1041 was used, fill in the
Schedule and Schedule BI before circle next to the same entity type checked on
completing lines 1 through 17 on page 1 of Form 1041. Fill in the circle next to
page 1 of Form 38. “Other” (Item 10) if the fiduciary filed:
General • Form 1041-QFT (Write “Qualified funeral
Item A
instructions for Tax year trust” on the line.)
The same tax year used for federal income • Form 990-T for a tax-exempt trust with
completing tax purposes (as indicated on the federal unrelated business taxable income (Write
Form 38 return) must be used for North Dakota income “Tax-exempt trust with UBTI” on the
tax purposes. Fill in the applicable circle. If line.)
Complete Form 38 as follows: the estate or trust has a fiscal year, enter the
1. Complete Federal Form 1041 in its beginning and ending dates of the fiscal year. Item H
entirety. Use the 2021 Form 38 only if the estate’s or Check off items
2. Complete Items A through H at the top trust’s tax year began in the 2021 calendar Fill in all applicable circles.
of page 1 of Form 38—see page 5 of year. Initial return. Fill in this circle if this is
these instructions. the first return filed in North Dakota for this
Item B
3. Complete the Tax Computation estate or trust.
Schedule on page 2 of Form 38—see Name and address
page 6 of these instructions. Enter the legal name of the estate or trust, Final return. Fill in this circle if this is the
the name and title of the fiduciary, and the last return to be filed in North Dakota for this
4. Complete Schedule BI on page 3 estate or trust.
of Form 38—see page 8 of these fiduciary’s mailing address on the applicable
instructions. lines. If filing an amended return, enter the Composite return. Fill in this circle only
most current address.
5. Complete lines 1 through 17 on page 1 if (1) the trust has one or more nonresident
beneficiaries eligible to be included in a
of Form 38—see page 9 of these Item C composite filing and (2) all of them elected
instructions.
Federal EIN to include their distributive shares of North
6. Complete Schedule K-1, if required, for North Dakota uses the federal employer Dakota source income in a composite filing.
the beneficiaries—see page 10 of these identification number (FEIN or federal EIN) See “Composite filing” on page 4 for more
instructions.
for identification purposes. Enter the federal information.
employer identification number from page 1
Rounding of numbers. Numbers may be Fill in this circle if this
of Federal Form 1041. Amended return.
entered on the return in dollars and cents, or return is being filed to correct a previously
they may be rounded to the nearest whole Important: Do not enter the fiduciary’s own filed 2021 Form 38. See “Correcting a
dollar. If rounding, drop the cents if less federal employer identification number. A previously filed return” on page 4 for more
than 50 cents and round up to the next whole fiduciary for an estate or trust must obtain information.
dollar amount if 50 cents or higher. For a separate federal employer identification
example, $25.36 becomes $25.00, and $25.50 number for the estate or trust. Extension. Fill in this circle if a federal or
becomes $26.00. state extension of time to file the return was
Item D obtained. See “Extension of time to file” on
Fiscal year filers. The tax year for North Date created page 3 for more information.
Dakota income tax purposes must be the same Enter the date the estate or trust was created
as the tax year used for federal income tax from page 1 of Federal Form 1041.
purposes. Use the 2021 Form 38 if the estate’s
or trust’s taxable year began in the 2021 Item E
calendar year. Note: Use the 2020 Form 38 if Number of beneficiaries
the taxable year began in the 2020 calendar Enter the total number of beneficiaries and the
year. number of each type of beneficiary.

- 8 -

• For an electing small business trust Common sources of interest income that
Instructions for (ESBT), the net amount of the separate may be entered on this line include
completing S corporation items of income, gain, loss, U.S. savings bonds, Treasury bills and
etc., that would have been included had notes, and securities issued by the Banks
Tax Computation they not been removed for purposes of for Cooperatives, Commodity Credit
the separate tax calculation on Federal Corporation, Federal Deposit Insurance
Schedule Form 1041. If the net amount is a loss, Corporation, Federal Farm Credit System,
(Form 38, page 2) enter as a negative number. Federal Home Loan Banks, Federal
Grantor trust. If all of a trust is a grantor • Amount of contribution on which Intermediate Credit Banks, Federal Land
trust, do not complete the Tax Computation the fiduciary claims a North Dakota Banks, Federal Savings & Loan Insurance
Schedule. However, if a trust is part grantor endowment fund tax credit under N.D.C.C. Corporations, and Student Loan Marketing
trust and part other type of trust (e.g., simple § 57-38-01.21, but only to the extent Association.
or complex), complete the Tax Computation the contribution reduced the fiduciary’s Do not enter on this line interest income
Schedule to the extent it applies to the federal taxable income. If a fiduciary from securities of the Federal Home Loan
nongrantor part of the trust. receives the credit from a passthrough Mortgage Corporation (Freddie Mac), Federal
entity, include on this line the fiduciary’s National Mortgage Association (Fannie
Instructions for Part 1 share of the related contribution from the Mae), and Government National Mortgage
passthrough entity to the extent it reduced Association (Ginnie Mae), nor from a federal
Line 2 the fiduciary’s federal taxable income. income tax refund or repurchase agreement.
Additions Attach a statement specifically identifying
The following items must be entered on this Line 4a the securities and the interest income
line if taxable to the fiduciary: Interest from U.S. obligations from them. For a mutual fund, identify
Enter the following on this line if included in
• Taxable portion of a lump-sum distribution the fund, the qualifying securities, and
the amount on line 1:
from Federal Form 4972, line 6 plus the percentage of income from qualifying
line 10. This adjustment does not apply to • Interest income from U.S. obligations. securities.
a fiduciary for a nonresident estate or trust. • Interest income from other securities that
Line 4b
• Loss adjustment reported to the fiduciary is specifically exempted from state income
Net long-term capital gain exclusion
by an S corporation that elected taxation tax by federal statute.
If the amount on line 1 includes a net long-
under N.D.C.C. § 57-38-01.35. For • The portion of dividend income from a term capital gain, 40 percent of the gain
details, obtain the Income Tax Guideline: mutual fund attributable to the fund’s is excludable from North Dakota taxable
Adjustment For Income (Loss) From An investment in U.S. obligations or income. For a nonresident estate or trust, the
S Corporation electing to be taxed as federally-exempted securities. exclusion is allowed only for a net long-term
a C corporation. Attach a copy of the capital gain based on the capital gains and
statement received from the entity. losses reportable to North Dakota. A net
long-term capital gain included in an amount
entered on line 4d (Other subtractions) is

Worksheet for calculating net long-term capital gain exclusion
(for Form 38, Tax Computation Schedule, Part 1, line 4b)
1. Enter amount from 2021 Schedule D (Form 1041), line 18a, column (2).
If zero or less, stop here; no exclusion is allowed ................................................................................................... 1 ______________
2. Enter amount from 2021 Schedule D (Form 1041), line 19, column (2).
If zero or less, stop here; no exclusion is allowed ................................................................................................... 2 ______________
3. Enter the smaller of line 1 or line 2. This is the fiduciary’s federal net long-term capital gain ........................................... 3 ______________
• If a resident estate or trust, enter the amount from line 3 on line 5 and go to line 6.
• If a nonresident estate or trust, go to line 4.
4. Complete lines 4a through 4d using only the capital gains and losses reportable to North Dakota by the fiduciary:
a. North Dakota net short-term capital gain (loss) included on 2021 Schedule D (Form 1041),
line 17, column (2) ......................................................................................................... 4a ______________
b. North Dakota net long-term capital gain (loss) included on 2021 Schedule D (Form 1041),
line 18a, column (2). If zero or less, stop here; no exclusion is allowed ...................................... 4b ______________
c. Combine lines 4a and 4b. If zero or less, stop here; no exclusion is allowed ................................. 4c ______________
d. Enter the smaller of line 4b or line 4c. This is the North Dakota net long-term capital gain ........................................ 4d ______________
5. If resident estate or trust, enter amount from line 3. Otherwise, enter smaller of line 3 or line 4d. ...................................... 5 ______________
6. Portion of line 5, if any, included in an amount that will be entered on Form 38, Tax Computation Schedule, Part 1, line 4d. .. 6 ______________
7. Subtract line 6 from line 5. ................................................................................................................................. 7 ______________
8. Multiply line 7 by 40% (.40). Enter this amount on Form 38, Tax Computation Schedule, Part 1, line 4b ............................ 8 ______________

- 9 -

not eligible for the exclusion. Complete the • Compensation received by a National Instructions for Column B only—
worksheet on page 6 to calculate the amount Guard or U.S. armed forces member North Dakota
to enter on this line. activated for federal active duty service If part or all of a North Dakota income
under Title 10 of United States Code. amount reportable in Column B was entered
Line 4c Compensation received for annual in Part 1, line 4a and line 4d because it is
Qualified dividend exclusion training, basic military training, or exempt from North Dakota income tax, only
Resident estate or trust— A fiduciary for a professional military education is enter the taxable portion in Column B.
resident estate or trust may enter on this line not eligible. Attach a copy of the
40 percent of the qualified dividends allocated mobilization orders. Line 1, Column B
to the estate or trust and reported on Form • Compensation received by a nonresident Interest income
1041, page 1, line 2b(2). individual for active duty in the U.S. Enter the fiduciary’s share of interest
armed forces. received from a partnership, S corporation,
Nonresident estate or trust. A fiduciary or limited liability company doing business
for a nonresident estate or trust may enter Also enter on this line contributions made
on this line 40 percent of the portion of the during the tax year to a College SAVE in North Dakota, to the extent the interest is
qualified dividends allocated to the estate account administered by the Bank of North apportioned or allocated to North Dakota by
or trust and reported on Form 1041, page 1, Dakota. The maximum deduction allowed is that entity. Do not include any interest from
line 2b(2), that are reportable to North $5,000. U.S. obligations.

Dakota. Qualified dividends allocated to the Property tax clearance. If a renaissance zone Line 2, Column B
estate or trust that are reportable to North income exemption or a new or expanding Ordinary dividends
Dakota must be included in the fiduciary’s business income exemption is claimed on this Enter the fiduciary’s share of dividend income
share of total income reported on Form 38, line, the fiduciary must attach the following to received from a partnership, S corporation,
Tax Computation Schedule, Part 2, Column Form 38: or limited liability company doing business
B, line 11. in North Dakota, to the extent the dividend
• A statement in which the fiduciary states
income is apportioned or allocated to North
Line 4d whether or not the estate or trust holds a
Dakota by that entity.
Other subtractions 50 percent or more interest in real property
Enter the following items on this line to the in North Dakota. If it does, the fiduciary Line 3, Column B
extent they are included in the amount on must also provide in the statement the Business income or (loss)
line 1: name of each North Dakota county in Enter the net income or loss from a sole
which the estate or trust holds a 50 percent
• Income earned or received by a Native proprietorship doing business in North
or more interest in real property.
American while living and working on any Dakota as reported on Federal Schedule C
Indian reservation in North Dakota. • A copy of a property tax clearance record (Form 1040), to the extent the net income or
• Taxable part of a retirement, sick pay, or obtained from each North Dakota county loss is apportionable and allocable to North
unemployment payment from the U.S. in which the estate or trust holds a 50% Dakota.
Railroad Retirement Board. Attach a copy or more interest in real property. This
of Form RRB-1099 or RRB-1099-R (or may be obtained by completing the form Line 4, Column B
both, if applicable). Property Tax Clearance Record available Capital gain (loss)
on the Office of State Tax Commissioner’s Enter net capital gains and losses from the
• Income adjustment reported to the sale or exchange of real and tangible personal
website.
fiduciary by an S corporation that property located in North Dakota. Also enter
elected taxation under N.D.C.C. § 57- the fiduciary’s share of net capital gains and
Instructions for Part 2
38-01.35. For details, obtain the Income losses from a partnership, S corporation, or
Tax Guideline: Adjustment For Income All estates and trusts—Enter the amounts limited liability company doing business
(Loss) From An S Corporation electing from the 2021 Federal Form 1041, page 1, in North Dakota, to the extent they are
to be taxed as a C corporation. Attach lines 1 through 8, on the corresponding lines apportioned or allocated to North Dakota by
statement received from the entity. in Column A. Then complete lines 9 through that entity.
• Income exempted under N.D.C.C. 11 in Column A.
Line 5, Column B
ch. 40-63 (Renaissance Zone Act). Attach Nonresident estate or trust only— Enter Rents, royalties, partnerships, other
Schedule RZ. Also see “Property tax in Column B (North Dakota) the portion of estates and trusts, etc.
clearance” below. the amount in Column A that is reportable to Enter the net income or loss from real and
• Income exempted under N.D.C.C. North Dakota. See below for the instructions tangible personal property located in North
ch. 40-57.1 (new or expanding business to lines 1 through 8 of Column B. Then Dakota. This includes net income or loss from
income exemption). Attach supporting complete lines 9 through 11 in Column B. leasing the property, and royalties and other
statement showing calculation. Also see Complete lines 1 through 11 in Column C by income from interests in oil, coal, or other
“Property tax clearance” below. entering the difference between Column A mineral property located in North Dakota.
and Column B.

- 10 -

8

Enter the fiduciary’s share of income or loss   All Beneficiaries                               Box 14  Other information (Only include 
from a partnership, S corporation, or limited   (Columns 1 through 4)                                 income and deduction items 
liability company doing business in North                                                             includable in the calculation of 
Dakota (that is not reported on the other       Columns 1 and 2                                       federal adjusted gross income.)
lines of Part 2), to the extent the income is   Enter the name, mailing address, and federal 
apportioned and allocated to North Dakota by    identification number of each beneficiary.      Grantor trust owner. For a grantor trust 
that entity.                                                                                    owner (who does not receive a federal 
Enter the fiduciary’s share of North Dakota     Column 3                                        Schedule K-1), enter the sum of the income 
source income and losses from another estate    Identify the entity type of the beneficiary by  and deduction items reportable for federal 
or trust.                                       entering the applicable code letter as follows: income tax purposes that are attributable to 
                                                                                                the owner.
                                                      Entity type     Code letter
Line 6, Column B
                                                      Individual ......................
Farm income or (loss)                                                                     I     Nonresident beneficiaries only
                                                      C corporation ............... C
Enter the net income or loss from a farm                                                        (Columns 5 through 7)
                                                      S corporation .................S
or ranch operation doing business in North 
                                                      Partnership ................... P
Dakota as reported on Federal Schedule F                                                        Columns 5 through 7 only apply to a 
                                                      Estate ............................ E
(Form 1040), to the extent the net income or                                                    nonresident beneficiary. For this purpose, a 
                                                      Trust ............................. T
loss is apportionable and allocable to North                                                    nonresident beneficiary is defined as:
                                                      Exempt organization .... O
Dakota.                                                                                         •  an individual domiciled outside North 
                                                Note: A “C corporation” is a corporation        Dakota,
Line 7, Column B                                that files Federal Form 1120; an                •  a trust legally organized outside North 
Ordinary gain or (loss)                         “S corporation” is a corporation that files     Dakota, or 
Enter the ordinary gain or loss from the sale   Federal Form 1120S; and the “Trust” entity      •  a partnership, S corporation, or other 
or exchange of real and tangible personal       type only applies to a trust that files Federal passthrough entity with a commercial 
property located in North Dakota.               Form 1041 or, in lieu of filing Federal         domicile outside North Dakota.
                                                Form 1041, elects an alternative reporting 
Line 8, Column B                                method under the federal income tax             A nonresident beneficiary includes the grantor 
Other income                                    regulations.                                    of a grantor trust if the grantor meets the 
Enter the amount of any other income having                                                     definition of a nonresident beneficiary.
its source in North Dakota that is not included If the beneficiary is a limited liability 
on lines 1 through 7 of Part 2.                 company (LLC) that is a disregarded entity      Column 5
                                                for federal income tax purposes or a nominee    Nonresident beneficiary only
                                                on Federal Schedule K-1, enter the code letter  Complete Column 5 for each nonresident 
                                                for the type of entity of the entity’s owner.   beneficiary. Include in this column the portion 
Instructions                                    If the LLC is treated like a C corporation,     of each item of income, loss, and deduction 
                                                partnership, or S corporation, enter the code   included in the amount in Column 4 that is 
for completing                                  letter for that particular entity type.         derived from sources in North Dakota. For 
Schedule BI                                                                                     this purpose, this includes the same kinds 
(Form 38, page 3)                               Column 4                                        of items that would be reportable to North 
                                                Enter the sum of the following items from       Dakota had they been directly received by the 
Schedule BI must be completed to provide        the beneficiary’s Federal Schedule K-1          nonresident beneficiary. These items include:
information about each beneficiary. If          (Form 1041), Part III:
                                                                                                •  Compensation for services performed in 
the estate or trust has more than four          Box 1 Interest income                           North Dakota.
beneficiaries, complete and attach additional   Box 2a  Ordinary dividends                      •  Net income (loss) from the rental or lease 
Schedule BI forms. If more than one             Box 3 Net short-term capital gain               of real and tangible personal property 
Schedule BI is needed, complete lines 1         Box 4a  Net long-term capital gain              located in North Dakota.
through 4 on only one of them, and include      Box 5 Other portfolio and nonbusiness           •  Net income (loss) attributable to royalties 
the combined amount for all of the schedules          income                                    and other income from oil, coal, or other 
on that one schedule. Note: Only the North      Box 6 Ordinary business income                  mineral interests located in North Dakota.
Dakota prescribed Schedule BI will be           Box 7 Net rental real estate income             •  Gain or loss from the sale, exchange, 
accepted. Taxpayer prepared substitutes are     Box 8 Other rental income                       or other disposition of real and tangible 
not acceptable.                                 Box 9 Directly apportioned deductions           personal property located in North Dakota.
                                                Box 11  Final year deductions (Only include     •  Net income (loss) from a sole 
Grantor trust. For purposes of completing             deductions that are allowed as a          proprietorship doing business in North 
Schedule BI, “beneficiary” includes the               deduction from gross income in            Dakota.
owner(s) of a grantor trust.                          calculating adjusted gross income         •  Net income (loss) from a partnership, 
                                                      for federal income tax purposes.)         S corporation, or other trade or business 
                                                                                                carried on in North Dakota, to the extent 
                                                                                                it is apportioned and allocated to North 
                                                                                                Dakota.

- 11 -

• Income from gambling activity carried on Line 6
in North Dakota. Instructions Enter the amount of the income tax less any
• Income, gain, or loss from sources in for completing income tax credits (except withholding and
North Dakota received from another estate estimated tax) shown on the other state’s
or trust. Schedule CR income tax return. If the fiduciary also paid
(Form 38, page 3) income tax to a local jurisdiction in the other
For a nonresident beneficiary, income
state, include the income tax shown on the
from North Dakota sources generally does
A credit is allowed to a resident estate or trust local jurisdiction’s income tax return (or, if
not include interest, dividends, pensions,
for income tax paid to another state or local applicable, the other state’s return).
annuities, or income and gain from intangible
jurisdiction on income that is also taxable by
property. However, if any of these income
North Dakota.
items were derived from a partnership,
S corporation, or limited liability company A “state” means any of the other 49 U.S. Specific line
doing business in North Dakota, they must be states, the District of Columbia, and a U.S.
included in Column 5 to the extent they are territory. A “local jurisdiction” means a city, instructions for
apportioned or allocated to North Dakota by township, county, etc., within a state.
that entity. page 1 of Form 38,
Qualifying taxes—The credit is allowed for
Column 6 income taxes paid to another state and any lines 1-17
Nonresident beneficiary only local jurisdictions in that state. This includes Complete the Tax Computation
If a nonresident beneficiary’s distributive an estate’s or trust’s share of income tax paid Schedule and Schedule BI before
share of North Dakota income in Column 5 on a composite return filed by a partnership completing lines 1 through 17 on
is $1,000 or more, multiply the amount in or other passthrough entity in which the page 1 of Form 38.
Column 5 by 2.90% (.029) and enter the estate or trust owns an interest. The credit is
result in Column 6. However, the following not allowed for income tax paid to a foreign Line 2
exceptions apply: country or its local jurisdictions, nor is it Credit for income tax paid to
allowed for any tax that is not an income tax another state or local jurisdiction
• If the nonresident beneficiary provides the (e.g., property or sales taxes). A fiduciary for a resident estate or trust may
fiduciary with a completed Form PWA, be eligible for a credit if the fiduciary pays
enter the amount from line 6 of Form PWA Other state’s return—The credit is allowed income tax to another U.S. state, the District
in Column 6 and fill in the circle under only if the fiduciary files an income tax return of Columbia, a U.S. territory, or any of their
“Form PWA or Form PWE.” with the other state or local jurisdiction. The local jurisdictions, on income that is also
credit is not allowed for income tax withheld
• If the nonresident beneficiary provides the taxed to the fiduciary in North Dakota. See
or estimated income tax paid to the other
fiduciary with a completed Form PWE, the instructions to Schedule CR on this page.
state. A copy of the income tax return filed
leave Column 6 blank and fill in the circle Attach a copy of the income tax return
with the other state and/or local jurisdiction
under “Form PWA or Form PWE.” filed with the other state and/or local
must be attached to Form 38. jurisdiction.
• If the nonresident beneficiary elected to
Payment of income tax to more than one
be included in a composite filing, leave Line 3
other state—If the fiduciary pays income tax
Column 6 blank and see the instructions to Other credits
to more than one other state for the tax year,
Column 7. For other credits that may apply, see
a separate Schedule CR must be completed
See “Withholding from nonresident for each state. If the fiduciary also paid Schedule 38-TC and its instructions. Enter on
beneficiary” on page 3 for more information. income tax to a local jurisdiction in another this line the total credits retained by the estate
state, include the income tax paid to the local or trust from Schedule 38-TC, line 21a. Do
Column 7 jurisdiction on the Schedule CR filed for the not include on this line any credit(s) allocated
Nonresident beneficiary only state in which the local jurisdiction is located. to the beneficiaries. Attach Schedule 38-TC.
Note: Leave Column 7 blank if Column 6 Fill in the total of the separately calculated Line 8
was completed for the nonresident credit amounts on Form 38, page 1, line 2. Income tax withholding
beneficiary.
Enter the North Dakota income tax
Line 2
Complete Column 7 for each nonresident withholding shown on a 2021 Form W-2,
beneficiary electing to be included in a Enter only those items of income, gain, Form 1099, or North Dakota Schedule K-1.
composite filing. Multiply the amount loss, and adjustments to income (included Also enter North Dakota income tax
in Column 5 by 2.90% (.029) and enter in the fiduciary’s share of total income on withholding shown on a 2020 North
the result in Column 7. If the amount in line 1) that have their source in the other Dakota Schedule K-1 if the tax year of the
Column 5 is zero or less, enter zero in state. Generally they have their source in the partnership, S corporation, estate, or trust
Column 7. See “Composite filing” on page 4 other state if they are taxable or deductible shown on the Schedule K-1 is a fiscal year
for more information. under the other state’s tax laws. Disregard ending in your 2021 tax year. Be sure the state
any adjustment to the fiduciary’s total federal identified on the Form W-2 or Form 1099
income allowed or required by the other is North Dakota. Do not enter on this line
state’s tax laws.

- 12 -

North Dakota extraction or production taxes  Electronic funds transfer—A payment A North Dakota Schedule K-1 does not have
withheld from mineral interest income, may be made by means of an Automated to be provided to a partnership, corporation,
such as an oil or gas royalty, because they Clearing House (ACH) credit transaction or North Dakota resident individual, estate, or
are not income taxes. Attach a copy of the that the taxpayer initiates through its trust beneficiary if there are no North Dakota
Form W-2, Form 1099, or North Dakota banking institution. For more information, adjustments or tax credits distributable to the
Schedule K-1. go to our website at www.nd.gov/tax. beneficiary.
Line 9 If paying with a paper check or money order, In addition to the North Dakota Schedule K-1,
Estimated tax payment complete a 2021 Form 38-PV payment the fiduciary must provide the beneficiary
Enter North Dakota estimated income tax voucher and enclose it with the payment. with a copy of the Beneficiary’s Instructions
paid on 2021 Forms 38-ES and 38-EXT. Also Make the check or money order payable to to North Dakota Schedule K-1 (Form 38).
enter the amount of an overpayment from “ND State Tax Commissioner,” and write
A copy of all North Dakota Schedule K-1
the 2020 Form 38 that was applied as an the last four digits of the federal employer
forms must be enclosed with Form 38 along
estimated tax payment for the 2021 tax year. identification number and “2021 Form 38” on
with any required supplemental statements.
the check or money order. A check must be
Line 12 drawn on a U.S. or Canadian bank, be in U.S. Amended schedule. If a fiduciary files an
Application of overpayment to 2022 dollars, and use a standard 9-digit routing amended Form 38, the fiduciary must issue
If there is an overpayment on line 11, part number. A check drawn on a foreign bank amended North Dakota Schedule K-1 forms
or all of it may be applied as an estimated (except one in Canada) cannot be accepted. to its beneficiaries. Fill in the “Amended”
payment toward the 2022 tax liability. Enter circle at the top of the North Dakota
on this line the amount to be applied. The Line 17 Schedule K-1.
amount applied may not be changed after the Interest on underpaid estimated tax
return is filed. If this is an amended return, do If the fiduciary for an estate or trust was Final schedule. Fill in the “Final” circle at
not make an entry on this line. required to pay estimated North Dakota the top of the North Dakota Schedule K-1 if it
income tax for 2021, but the fiduciary did not is the last one that the fiduciary is required to
Line 14 pay enough or paid it late, interest is charged issue to a beneficiary.
Tax due on the underpayment or late payment. To
A tax due must be paid in full with the determine if interest is owed, obtain and Part 2
return when it is filed. See the instructions to complete Schedule 38-UT. Beneficiary information
line 16 for payment options. A late payment
of tax may be subject to penalty and interest Item F
charges—see “Penalty and interest” on Instructions Enter the same code letter shown in Column 3
page 3. of Schedule BI of Form 38 for the beneficiary.
for completing
Item G
Line 15 Schedule K-1
Penalty and interest If the beneficiary is an individual, estate, or
The Office of State Tax Commissioner will North Dakota Schedule K-1 (Form 38) trust, fill in the applicable circle to indicate
notify the fiduciary of any penalty and interest must be used to provide beneficiaries with the legal residency status of the beneficiary
owed for late filing or late payment, or information they will need to complete for North Dakota income tax purposes. If an
interest owed on tax due during an extension a North Dakota income tax return. The individual beneficiary changed his or her legal
period. However, if desired, the fiduciary may information to be included in the schedule residency to or from North Dakota during the
calculate these amounts and enter them on will depend on the type of beneficiary. tax year, check the part-year resident status. In
this line, and submit payment for them with the case of an estate or trust beneficiary, only
the return. See “Penalty and interest” on page For purposes of completing Schedule K-1 the full-year resident or full-year nonresident
3 for how to calculate these amounts. (Form 38), a beneficiary includes an owner of status will apply.
a grantor trust.
Line 16 Item H
Balance due North Dakota Schedule K-1 (Form 38) must For a nonresident beneficiary, fill in the
The balance due must be paid in full with be completed and given to: applicable circle to indicate whether the
the return. The payment may be made beneficiary elected to be included in a
electronically in one of the following ways. • each beneficiary to whom the fiduciary composite filing by the fiduciary.
distributes a share of a North Dakota
 Online—A payment may be made online adjustment or tax credit (which is Part 3
with an electronic check or a debit or reportable in Part 3 of North Dakota All beneficiaries—
credit card. The electronic check option Schedule K-1), or North Dakota adjustments and
is free. North Dakota contracts with a
national payment service to provide the • each nonresident individual, estate, or tax credits
debit or credit card option. There is a fee trust beneficiary for which the fiduciary Complete this part for a beneficiary only if the
for the debit or credit option, none of is required to report an amount on income, deduction, or tax credit is allocated to
which goes to the State of North Dakota. Schedule BI, Column 5. the beneficiary.
To pay online, go to
www.nd.gov/tax/payment.

- 13 -

Line 1 Lines 7 through 21 Line 35
Federally-exempt income from non- Tax credits ND composite income tax
North Dakota bonds and securities If the estate or trust qualified for a North Enter the amount of North Dakota composite
If the beneficiary is an individual, estate, or Dakota income tax credit (see instructions to income tax on the nonresident beneficiary’s
trust, do not make an entry on this line. Form 38, page 1, line 3), and part or all of the North Dakota distributive share of income
For all other beneficiaries, enter the credit was allocated to its beneficiaries, enter from Form 38, Schedule BI, Column 7.
beneficiary’s share of interest and dividend the beneficiary’s share of the credit on the
income from bonds and securities that is applicable line.
Before you file
exempt from federal income tax. Do not Line 14a. Enter on this line the beneficiary’s
include income from bonds and securities share of an endowment fund tax credit from Form 38
of North Dakota and any of its political Schedule 38-TC, line 12a.
subdivisions. Signatures
Line 14b. Enter on this line the beneficiary’s The return must be signed and dated by the
Line 2 share of a contribution amount from fiduciary, or an authorized representative of
State and local income taxes Schedule 38-TC, line 12b. the fiduciary.
If the beneficiary is an individual, estate, or Line 14c. Enter on this line the beneficiary’s If the fiduciary pays someone (other than
trust, do not make an entry on this line. share of an endowment fund tax credit an employee) to prepare the return, the paid
For all other beneficiaries, enter the portion (ND Schedule K-1) from Schedule 38-TC, preparer also must sign and date the return.
of any state or local income taxes deducted in line 12c.
calculating ordinary income (loss) that was Line 14d. Enter on this line the beneficiary’s Preparer authorization check-off
allocated to the beneficiary. share of a contribution amount (ND A fiduciary may authorize the North Dakota
Schedule K-1) from Schedule 38-TC, Office of State Tax Commissioner (Tax
Line 3 line 12d. Department) to discuss matters pertaining
Interest from U.S. obligations to the 2021 Form 38 with the preparer who
Enter the portion of any interest from U.S. Part 4 signed it by filling in the circle to the right of
obligations allocated to the beneficiary. the signature area.
Nonresident individual, estate,
Include interest income from other securities
or trust beneficiary only—
if the interest is specifically exempted from This allows the Tax Department to contact
state income tax by federal statute. Also North Dakota income (loss) the preparer if any questions arise during
include the portion of dividend income from Complete Part 4 for a nonresident individual, the processing of the return. It also allows
a mutual fund attributable to the fund’s estate, or trust beneficiary. Enter on the the preparer to respond to the questions and
investment in the same kinds of securities. corresponding line of Part 4, lines 22 through to provide any information missing from
32, each item of North Dakota income, gain, the return, to contact the Tax Department
Line 4 loss, deduction, etc., included in the amount to inquire about the status of the return’s
Renaissance zone income exemption reported on Form 38, Schedule BI, Column 5. processing and related refund or payment, and
If the estate or trust qualified for the to respond to Tax Department notices that the
renaissance zone business or investment Part 5 fiduciary shares with the preparer pertaining
income exemption (see instructions to the Nonresident beneficiary only to math errors or return preparation. (Tax
Tax Computation Schedule, Part 1, line 4d), Complete Part 5 for all nonresident Department notices will be sent only to the
enter the portion of the exemption amount beneficiaries for which an amount was fiduciary.)
allocated to the beneficiary. This applies only required to be entered on Form 38, Schedule
if the income qualifying for the exemption is BI, Column 5. This authorization applies only to the
individual whose signature and printed name
allocated to the beneficiary. appears in the paid preparer section of the
Line 33
Line 5 ND distributive share of income signature area. It does not apply to the firm, if
New or expanding business income (loss) any, shown in that section. It only applies to
exemption Enter the nonresident beneficiary’s North the 2021 return and automatically expires on
If the estate or trust qualified for the new or Dakota distributive share of income (loss) the due date (including extensions) for filing
expanding business income exemption (see from Form 38, Schedule BI, Column 5. the 2022 Form 38.
instructions to the Tax Computation Schedule, This authorization does not authorize the
Part 1, line 4d), enter on this line the portion Line 34 preparer to receive a refund check, bind the
of the exemption amount allocated to the ND income tax withheld fiduciary in any way (including any additional
beneficiary. This applies only if the income Enter the amount of North Dakota income tax tax liability), or represent the fiduciary before
qualifying for the exemption is allocated to withheld from the nonresident beneficiary’s the Tax Department for any other purpose.
the beneficiary. North Dakota distributive share of income
from Form 38, Schedule BI, Column 6.
Line 6
College SAVE deduction
Enter the portion of a College SAVE
deduction allocated to the beneficiary.

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12

Assembling a paper return
Please assemble Form 38 and its required 
attachments in the following order:
1.  Form 38.
2.  Tax Computation Schedule
3.  Schedule BI.
4.  Schedule 38-TC
5.  All other required North Dakota 
schedules and forms (except North 
Dakota Schedule K-1 forms).
6.  North Dakota Schedule K-1 forms.
7.  Required supporting statements.
8.  Complete copy of Form 1041, including 
Federal Schedule K-1 forms.
A balance due may be paid electronically 
(see page 10 of these instructions). If paying 
with a paper check, enclose the check and 
a Form 38-PV payment voucher with the 
return.

PDF file checksum: 2836217243

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