Subchapter S-Corporation Frequently Asked Questions
Q: Am I required to file a North Dakota Small Business Corporation return?
Q: How do I determine if my income is business income which must be apportioned?
Q: When and where do I file my North Dakota return?
Q: Am I required to file a North Dakota Small Business Corporation return?
A: If the subchapter S corporation derives any gross income from North Dakota sources, it is required to file Form 60, North Dakota Small Business Corporation Income Tax Return. A subchapter S corporation that carries on its business entirely within North Dakota must report all of its income or loss to North Dakota. A subchapter S corporation that carries on its business both inside and outside of North Dakota must apportion its income or loss to North Dakota.
Q: How do I determine what portion of my subchapter S corporation's income or loss must be reported to North Dakota?
A: A subchapter S corporation that carries on its business entirely within North Dakota must report all of its income or loss to North Dakota. A multi-state subchapter S corporation must use the three-factor apportionment calculation to determine the amount of business income to report to North Dakota.
Q: How do I determine if my income is business income which must be apportioned?
A: Generally, all income derived from the subchapter S corporation, including interest income generated by the investment of working capital, is business income and is subject to apportionment.
Q: How do I report to the shareholders of the subchapter S corporation how much income they must report to North Dakota on their individual income tax returns?
A: At the present time North Dakota does not have an equivalent to Federal Schedule K-1 to report this income to your subchapter S corporation. However you are still required to provide each shareholder with a statement informing them about the amount of income they must report to North Dakota and their requirement to file a North Dakota return.
Q: Can the subchapter S corporation fulfill the shareholders' individual filing requirement by filing a composite individual income tax return on behalf of the shareholders?
A: A composite filing method is allowed as an alternative method of filing for nonresident individual partners. Under this method one individual income tax return may be filed by the subchapter S corporation on behalf of two or more nonresident individual shareholders. For details, obtain the Income Tax Guideline: Composite Filing Method.
Q: When and where do I file my North Dakota return?
A: Form 60 must be filed on or before the 15th day of the fourth month following the close of the taxable year. For calendar year filers this date is April 15th. Mail the return to Office of State Tax Commissioner, State Capitol, 600 E. Boulevard Ave, Bismarck, ND 58505-0599.
