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FAQ Articles

Are there any exceptions to the withholding requirement?

A partnership does not have to withhold North Dakota income tax from a nonresident partner's distributive share of North Dakota income if:

  • The distributive share for the taxable year is less than $1,000; or
  • In lieu of filing the North Dakota income tax return by the nonresident partner, the nonresident partner elects to be included in a composite filing by the passthrough entity.
  • The nonresident partner is a passthrough entity and elects to exempt its distributive share of North Dakota income from withholding.  This election is made on Form PWE and remains in effect until it is revoked by the nonresident passthrough entity.
  • The nonresident partner is an individual who meets the qualifying conditions, and completes the Form PWA. For the qualifying conditions, see Form PWA

A publicly traded partnership as defined by section 7704(b) of the Internal Revenue Code that is treated as a partnership for federal income tax purposes is not subject to this withholding requirement if it reports each unit-holder with a North Dakota distributive share of income over $500 on Form 58, Schedule KP.

nd.gov - The Official Portal for North Dakota State Government
North Dakota: Legendary. Follow the trail of legends

Ryan Rauschenberger
Tax Commissioner
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FAQ Articles

Are there any exceptions to the withholding requirement?

A partnership does not have to withhold North Dakota income tax from a nonresident partner's distributive share of North Dakota income if:

  • The distributive share for the taxable year is less than $1,000; or
  • In lieu of filing the North Dakota income tax return by the nonresident partner, the nonresident partner elects to be included in a composite filing by the passthrough entity.
  • The nonresident partner is a passthrough entity and elects to exempt its distributive share of North Dakota income from withholding.  This election is made on Form PWE and remains in effect until it is revoked by the nonresident passthrough entity.
  • The nonresident partner is an individual who meets the qualifying conditions, and completes the Form PWA. For the qualifying conditions, see Form PWA

A publicly traded partnership as defined by section 7704(b) of the Internal Revenue Code that is treated as a partnership for federal income tax purposes is not subject to this withholding requirement if it reports each unit-holder with a North Dakota distributive share of income over $500 on Form 58, Schedule KP.

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