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North Dakota Office of State Tax Commissioner 2021 Schedule RZ instructions
• If the taxpayer owns an interest in Line 8 If the corporation’s shareholders include
a passthrough entity, and Part 1 of North Dakota business income both residents and nonresidents of
Schedule RZ is being completed If the taxpayer qualified for the North Dakota, calculate the amount
only to claim the taxpayer’s share investment income exemption, do not to enter on this line by combining the
of a business or investment income enter any of the investment income on amounts calculated for the shareholders
exemption amount shown on a North this line—see line 16. as follows:
Dakota Schedule K-1 received from the Full-year resident individual, estate,
passthrough entity, skip lines 1 through If the taxpayer is claiming both the
17, and enter the exemption amount on business income exemption under the or trust—Include the shareholder’s
lines 18 and 19 of Part 1. Include a copy Act and the new or expanding business amount from Form 60, Schedule KS,
of the North Dakota Schedule K-1 with income exemption under N.D.C.C. Column 5.
Schedule RZ. See “Passthrough entity ch. 40‑57.1, see “Multiple income Full-year nonresident individual,
owner” on page 2 of these instructions exemptions” on page 2 before completing estate, or trust—Include the
for more information. this line. shareholder’s amount from Form 60,
Schedule KS, Column 6.
If the business incurred a net loss, enter
Line 1 zero. Otherwise, enter a net income as Part-year resident individual—
Enter the project number assigned to the follows: Include the sum of the shareholder’s
zone project by the local zone authority, as amounts attributable to the resident and
• Resident individual—For a resident
shown on the final zone project approval nonresident portions of the tax year. To
individual filing North Dakota
letter. If the taxpayer does not have a copy calculate the amount for the resident
Form ND-1, enter the amount from
of the final zone project approval letter, portion of the tax year, multiply the
Federal Form 1040, Schedule C or
contact the local zone authority to obtain shareholder’s amount from Form 60,
Schedule C-EZ.
one. Attach a copy of the final zone Schedule KS, Column 5, by a ratio
project approval letter to the North • Nonresident or part-year resident equal to the number of months the
Dakota return. individual—For a nonresident or shareholder was a resident of North
part-year resident individual filing Dakota divided by 12 months. To
Line 3 North Dakota Form ND-1, enter the calculate the amount for the nonresident
Enter the street address of the zone project amount from Schedule ND-1NR, line 3, portion of the tax year, first multiply the
property. Include the apartment, suite, or Column B. shareholder’s amount from Form 60,
other unit number, if applicable. Do not • C corporation—For a C corporation Schedule KS, Column 5, by a ratio
enter a post office box number. filing North Dakota Form 40, enter equal to the number of months the
the amount from Form 40, page 1, shareholder was a nonresident of
Line 4 line 6. However, if Schedule CR was North Dakota divided by 12 months,
If the taxpayer qualified for more than one completed, enter the amount from and then multiply this result by the
zone project at the same street address, Schedule CR, Part 1, line 6 of the apportionment factor from Form 60,
check the “Yes” box and enter the project applicable column. Schedule FACT, line 14.
numbers for all of them on the line • S corporation—For an S corporation • Partnership—For a partnership filing
provided on the schedule. filing North Dakota Form 60 that carries North Dakota Form 58 that carries on
on 100 percent of its business in North 100 percent of its business in North
Note: If the taxpayer has more than Dakota, enter the amount from Form 60, Dakota, enter the amount from Form 58,
one zone project for which the taxpayer Schedule KS, line 1. Schedule KP, line 1.
qualifies for the business or investment Regardless of where the corporation Regardless of where the partnership
income exemption, complete a separate carries on its business, if all of its carries on its business, if all of its
Schedule RZ, Part 1, for each project. Add shareholders are full-year residents of partners are individuals, estates, and
the separately calculated amounts and North Dakota, enter the amount from trusts that are full-year residents of
enter the total in Part 7, line 1, of one of Form 60, Schedule KS, line 1. North Dakota, enter the amount from
the schedules.
If the corporation carries on its Form 58, Schedule KP, line 1.
Line 7 business both within and without North If the partnership carries on its
Enter the exemption period start date for Dakota (and is required to complete business both within and without North
the zone project, as shown on the final lines 1 through 14 of Schedule FACT, Dakota (and is required to complete
zone project approval letter. This date Form 60), and all of the shareholders lines 1 through 14 of Schedule FACT,
establishes the beginning of the five-year are full-year nonresidents of North Form 58), and all of the partners are
(60-month) exemption period that applies Dakota, multiply the amount from individuals, estates, and trusts that
to the zone project. This date does not Form 60, Schedule KS, line 1, by the are full-year nonresidents of North
change even if the property is transferred apportionment factor from Form 60, Dakota, multiply the amount from
to another taxpayer. See “Five-year Schedule FACT, line 14, and enter the Form 58, Schedule KP, line 1, by the
exemption period” on page 3 for more result. apportionment factor from Form 58,
information. Schedule FACT, line 14, and enter the
4 result.
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