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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 2018 ................................................................................... 1
www.nd.gov/tax
General instructions ................................................................................2
E-mail
Who must file .....................................................................................2
Individual, estate, trust, partnership,
When and where to file ........................................................................ 2 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 shareholders ............................................ 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 S Corporation income tax—
W-2/1099 reporting requirement .......................................................... 4 Questions 701.328.1258
Forms 701.328.1243
Disclosure notification ......................................................................... 4
Use of information .............................................................................. 4 Speech/hearing impaired
TDD 800.366.6888
General instructions for completing Form 60 .............................................. 4
Specific line instructions ..........................................................................4 Write
Form 60, Page 1, Items A-H ................................................................. 4 Office of State Tax Commissioner
Schedule FACT ...................................................................................5 600 E. Boulevard Ave., Dept. 127
Bismarck, ND 58505-0599
Schedule BG ......................................................................................6
Schedule K ........................................................................................6 Walk-in service
Schedule KS .......................................................................................9 State Capitol, 16th Floor
Form 60, Page 1, Lines 1-13 ............................................................... 10 Monday through Friday
8:00 a.m. to 5:00 p.m.
Schedule K-1 .................................................................................... 11
(except holidays)
Before you file Form 60 ..................................................................... 12
Required forms
The following forms are needed to complete Form 60:
Form 60 S corporation return
Schedule FACT Calculation of North Dakota apportionment factor
Schedule BG Tax on excess net passive income and built-in gains
Schedule K Total North Dakota adjustments, credits, and other
items distributable to shareholders
Schedule KS Shareholder information
Schedule K-1 Shareholder’s share of North Dakota income (loss),
deductions, adjustments, credits, and other items
The following forms may be needed:
Form 60-PV S corporation return payment voucher Privacy Act Notification
Form 60-EXT S corporation extension payment voucher 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
Number (FEIN) or social security number on
income tax return this form is required under N.D.C.C.
Form PWA Passthrough entity withholding adjustment §§ 57-01-15 and 57-38-32, and will be
Form PWE Nonresident passthrough entity member exemption and used for tax reporting, identification, and
certification administration of North Dakota tax laws.
Disclosure is mandatory. Failure to provide
Download these forms from our website at www.nd.gov/tax. 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 S corporations
Developments, updates, and items of interest relating to S corporation 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 60. Starting with the 2018 tax year, corporation must attach a supporting
• Online—Pay online with an electronic
an S corporation must complete and attach statement showing how it calculated the
check or a debit or credit card. The
this schedule to Form 60 to claim the North deduction or tax credit, including any
electronic check option is free. A
Dakota endowment fund tax credit based on tax credit carryback or carryforward.
convenience fee is charged by the
contributions it makes directly to a qualified This requirement to attach a prescribed
service provider for the debit or credit
endowment fund. Note: If an S corporation schedule or supporting statement is
card option, none of which goes to the
receives a North Dakota qualified noted in parentheses on each line.
endowment fund tax credit from another State of North Dakota. To pay online, go
passthrough entity on a North Dakota • The lines for the automation tax credit to www.nd.gov/tax/payment.
Schedule K-1, the credit is not reported and the angel fund investment tax credit
• Electronic funds transfer—Pay by
on the new Schedule QEC; instead, the were removed because they expired in
means of an Automated Clearing House
credit and related contribution amount 2017.
(ACH) credit transaction, which the
shown on the North Dakota Schedule K-1 • The line for the endowment fund tax taxpayer initiates through the taxpayer’s
must be reported on the applicable lines of credit was split into four lines—see own banking institution. For more
Schedule K of Form 60. lines 12a through 12d. If the corporation information, go to www.nd.gov/tax/
completes Schedule QEC to claim an payment and click on “ACH credit” at
Changes to 2018 Form 60 and endowment fund credit based on its bottom of page.
its instructions own contributions, the credit and its
Payment by check. If choosing to mail a
related contribution amount are entered
paper check, complete and enclose with the
The Form 60, page 1, Item F, instructions on lines 12a and 12b, respectively. If
check the appropriate payment voucher as
to the “Composite filing” check-off were the corporation receives a North Dakota
follows:
revised to provide that it must be checked Schedule K-1 from another passthrough
only if all eligible nonresident shareholders entity on which an endowment fund • Use Form 60-ES if making an estimated
elect to include their distributive shares credit is reported, the credit amount(s) tax payment.
of North Dakota source income in a and related contribution amount(s)
• Use Form 60-EXT if making an
composite filing. If any eligible nonresident must be entered on lines 12c and 12d,
extension payment.
shareholder does not make the election to respectively.
be included, do not fill in the circle next to • Use Form 60-PV if paying a balance
“Composite filing.” due on Form 60.
Changes to 2018 Schedule K-1
On Schedule K, the following changes Don’t have a payment voucher? Print one
were made: On Schedule K-1 (Form 60), Part 3, the
out at www.nd.gov/tax/payment.
lines for the automation credit and the angel
• 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. Federal tax reform changes
schedule were revised to clarify that In addition, the line for the endowment
Major changes to federal income tax law
an S corporation claiming any of the fund credit was split into four lines—see
made by the federal Tax Cuts and Jobs Act
identified deductions or credits must lines 12a through 12d—to correspond with
take effect in 2018. The starting point in
answer the question that asks if it or any the same changes made to Schedule K.
responsible officer owns a 50 percent calculating North Dakota taxable income
or more interest in real estate located is federal taxable income. Therefore,
in North Dakota. If the corporation or Reminder: Return payment North Dakota income tax law conforms to
its responsible officers do not hold a options those changes that affect the calculation
of federal taxable income. These include
50 percent or more ownership interest North Dakota offers several payment
the changes to the section 179 expensing,
in real property in North Dakota, the options for submitting an estimated tax
depreciation, and like-kind exchange
corporation must answer no to the payment, extension payment, or payment of
provisions, and the new provisions on the
question. Failure to answer the question a balance due on a return.
may delay the processing of the return. taxation of foreign-sourced income.
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Form 60 Instructions 2018
North Dakota S Corporation 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.
natural gas, electrical, or telecommunication request a North Dakota extension. Form 101
General transmission property that is damaged, or must be postmarked on or before the due
instructions under threat of damage, from a state- or date of Form 60. Notification of whether
presidentially-declared disaster or emergency. the extension is accepted or rejected will
For more information, go to www.nd.gov/tax. be provided by the Office of State Tax
Who must file
Commissioner.
A 2018 Form 60, S Corporation Income Tax
Return, must be filed by a corporation that When and where to file Extension interest. If Form 60 is filed on or
meets both of the following: The 2018 Form 60 must be filed on or before before the extended due date, and the total
(1) April 15, 2019, if filing for the 2018 amount of tax due is paid with the return, no
• It is required to file a 2018 Form 1120S, calendar year, or (2) the 15th day of the 4th penalty will be charged. Interest on the tax
U.S. Income Tax Return for an S month following the end of the tax year, if due will be charged at the rate of 12% per
Corporation. filing for a fiscal year beginning in the 2018 year from the original due date of the return
• It carries on business, or derives gross calendar year. If the due date falls on a to the earlier of the date the return is filed or
income from sources, in North Dakota Saturday, Sunday, or holiday, the return may the extended due date.
during the 2018 tax year. be filed on or before the next day that is not a
Exception for certain S corporations. An Saturday, Sunday, or holiday. Prepayment of tax due. If an extension
S corporation must file a 2018 Form 40, Note: Use the 2017 Form 60 if filing for a of time to file Form 60 is obtained, any
North Dakota Corporation Income Tax fiscal year beginning in the 2017 calendar tax expected to be due may be paid on or
Return, for the 2018 tax year if all of the year. before the regular due date to avoid paying
extension interest. For more information,
following apply: Mail Form 60 and all required attachments to: including payment options, obtain the 2018
The corporation is a bank or other financial Form 60-EXT.
Office of State Tax Commissioner
institution that formerly was subject to Alternatively, a check or money order may be
600 East Boulevard Ave., Dept. 127
the North Dakota financial institution sent with a letter containing the following: (1)
Bismarck, ND 58505-0599
tax under N.D.C.C. ch. 57-35.3 and filed name of corporation, (2) corporation’s FEIN,
Form 35 for tax years prior to 2013. (3) corporation’s address and phone number,
Extension of time to file
The corporation made an election under An extension of time to file Form 60 may be and (4) statement that the payment is a 2018
N.D.C.C. §57-38-01.35 to be taxed as a obtained in one of the following ways: Form 60-EXT payment.
C corporation for the 2013 tax year and • Obtain a federal extension.
filed a 2013 Form 40. Penalty and interest
• Separately apply for a North Dakota
If an extension of time to file the return
The corporation’s North Dakota net tax extension.
liability on the 2017 Form 40 (page 1, was obtained, the tax due may be paid by
line 20) is zero and the corporation is not Federal extension. If an extension of time to the extended due date of the return without
revoking the election for 2018, which is file the federal corporation return is obtained, penalty, but extension interest will apply at
done by filing Form 60 for the 2018 tax it is automatically accepted as an extension of the rate of 12% per year—see “Extension
year. time to file Form 60. If this applies, a separate interest” and “Prepayment of tax due” on this
North Dakota extension does not have to page.
See the instructions to Form 40 for more be applied for, nor does the Office of State
If Form 60 is filed by its due date (or
information. Tax Commissioner have to be notified that
extended due date), but the total amount
Nonfiler penalty. If an S corporation does a federal extension has been obtained prior
of tax due is not paid by the due date (or
not file Form 60 as required, a minimum to filing Form 60. The extended due date for
extended due date), a penalty equal to 5% of
$500 penalty may be assessed if the failure North Dakota purposes is the same as the
the unpaid tax or $5.00, whichever is greater,
continues after receiving a thirty-day federal extended due date.
must be paid.
notice to file from the Office of State Tax North Dakota extension. If a federal
If Form 60 is filed after its due date (or
Commissioner. extension is not obtained, but additional
extended due date), and there is an unpaid tax
time is needed to complete and file Form 60,
due on it, a penalty equal to 5% of the unpaid
Disaster recovery tax exemptions. a separate North Dakota extension may be
tax due or $5.00, whichever is greater, for the
Exemptions from state and local tax filing applied for by filing Form 101, Application
month in which the return was due plus 5% of
and payment obligations are available to for Extension of Time to File a North
the unpaid tax due for each additional month
out-of-state businesses and their employees Dakota Tax Return. This is not an automatic
(or fraction of a month) during which the
who are in North Dakota on a temporary basis extension—there must be good cause to
return remains delinquent must be paid. This
for the sole purpose of repairing or replacing
penalty may not exceed 25% of the tax due.
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In addition to any penalty, interest must be the 2.90% tax rate may be withheld. For the Composite filing method procedure.
paid at the rate of 1% per month or fraction qualifying conditions, see Form PWA. An The tax under the composite filing method
of a month, except for the month in which S corporation must submit a payment for the is calculated and reported on Form 60,
the tax was due, on any tax due that remains the total amount of withholding reported on Schedule KS, Column 8. An S corporation
unpaid after the return’s due date (or extended Schedule KS, Column 7, with Form 60 when must submit a payment for the total tax
due date). it is filed. reported on Schedule KS, Column 8, with
Form 60 when it is filed.
Estimated tax payment Composite filing
(for 2019) A composite filing method is available to Correcting a previously filed
An S corporation may, but is not required to, an S corporation with one or more eligible return
make estimated income tax payments. For nonresident shareholders. Under this method, If a corporation needs to correct an error on
more information, including payment options, an S corporation calculates the North Dakota Form 60 after it is filed, the corporation must
obtain the 2019 Form 60-ES. income tax on an eligible nonresident file an amended return. There is no special
shareholder’s year-end distributive share form for this purpose. See “How to prepare an
Withholding from of North Dakota income and pays the tax amended 2018 return” below.
with Form 60. The tax is calculated at the
nonresident shareholders If a corporation paid too much tax because of
highest individual income tax rate (which
An S corporation must withhold North an error on its 2018 Form 60, the corporation
is 2.90% for the 2018 tax year), and no
Dakota income tax at the rate of 2.90% from generally has three years from the due date
adjustments, deductions, or tax credits are
the year-end distributive share of North of the return (excluding extensions) or the
allowed in calculating the tax. A composite
Dakota income of a nonresident shareholder. date the return was actually filed, whichever
filing satisfies the North Dakota income tax
Nonresident shareholder. For purposes of filing and payment obligations of the eligible is later, in which to file an amended return
this withholding requirement, a nonresident nonresident shareholders included in it, which to claim a refund of the overpayment. See
shareholder means: means they do not have to separately file their N.D.C.C. § 57-38-40 for other time periods
• an individual who is not domiciled in own North Dakota income tax returns. The that may apply.
North Dakota, or composite filing method is optional and does How to prepare an amended 2018 return
not require prior approval from the Office of
• a trust, including a grantor trust, that is 1. Obtain a blank 2018 Form 60.
State Tax Commissioner, and a choice to use
not organized under North Dakota law.
it may be made on a year-to-year basis.
This only includes trusts that are subject 2. Enter the corporation’s name, current
to income tax. Eligible nonresident shareholder. For this address, FEIN, etc., in the top portion of
purpose, a nonresident shareholder has the page 1 of Form 60.
Exception from withholding. No 3. Fill in the “Amended return” circle at the
same meaning as that used for withholding
withholding is required if any of the following top of page 1 of Form 60.
income tax from nonresident shareholders—
apply:
see “Withholding from nonresident 4. Complete Schedules FACT, BG, K, and
• The distributive share of North Dakota shareholders” on this page. A nonresident KS using the corrected information.
income is less than $1,000. shareholder is eligible to be included in a However, unless there is an increase in
• The nonresident shareholder elects composite filing if both of the following the amount reported on Schedule KS,
to include the distributive share in a apply: Column 6, of the amended return, enter
composite filing—see “Composite filing” • The nonresident shareholder’s only source on Schedule KS, Column 7, the same
on this page. of income within North Dakota is one or amount reported on the previously filed
• The nonresident shareholder is a trust more passthrough entities. A passthrough return. Then complete lines 1 through 4
and elects exemption from withholding entity includes a trust, partnership, on page 1 of Form 60.
on its distributive share of North Dakota S corporation, limited liability company 5. On line 6 of page 1 of Form 60, enter the
income. For more information, obtain treated like a partnership or S corporation, total taxes due from the previously filed
Form PWE. and any other similar entity. 2018 Form 60, page 1, line 4.
Withholding procedure. This withholding • The nonresident shareholder elects 6. Complete line 8 (overpayment) or line 11
requirement applies to a nonresident to be included in a composite filing. (tax due), whichever applies. If there
shareholder’s year-end distributive share of An election is indicated by the is an overpayment on line 8, enter the
North Dakota income, which is determined S corporation’s calculation and reporting full amount on line 10 (refund). On an
at the end of the S corporation’s tax year of a tax amount for the nonresident amended return, the amount credited to
and reported on Form 60, Schedule KS, shareholder on Form 60, Schedule KS, the next year’s estimated tax (line 9) may
Column 6. The requirement does not apply Column 8. (If the distributive share is a not be increased or decreased.
to actual distributions made to a nonresident loss, the tax is zero.) 7. Attach a statement explaining the
shareholder during the tax year. The The distributive share of North Dakota reason(s) for filing the amended return. If
withholding amount is calculated and reported income included in a composite return is it is because of changes the corporation
on Schedule KS, Column 7. If a nonresident subject to tax even if it is under $1,000. or the IRS made to the corporation’s 2018
shareholder meets certain conditions, an Federal Form 1120S, attach a copy of the
amount less than the amount calculated at amended federal return or IRS notice.
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8. Complete and provide a corrected North
Dakota Schedule K-1 (Form 60) to the General Specific line
shareholders, as required. instructions for instructions for
Reporting federal changes completing page 1 of Form 60,
If the Internal Revenue Service (IRS) changes
or audits the federal corporation return, or Form 60 Items A-H
if a corporation files an amended federal Complete Form 60 as Complete Items A through H at
corporation return, an amended North Dakota follows: the top of page 1 of Form 60.
Form 60 must be filed within ninety days after Then complete Schedule FACT,
the final determination of the IRS changes 1. Complete Federal Form 1120S in its Schedule BG, Schedule K, and
entirety.
or the filing of the amended federal return. Schedule KS before completing
Enclose a copy of the IRS audit report or the 2. Complete Items A through H at the top lines 1 through 13 on page 1 of
amended federal corporation return with the of page 1 of Form 60—see page 4. Form 60.
amended North Dakota Form 60. 3. Complete Schedule FACT on page 2 of Item A
Form 60—see page 5. Tax year
W-2/1099 reporting 4. Complete Schedule BG, if required, on The same tax year used for federal income
requirement page 2 of Form 60—see page 6. tax purposes (as indicated on the federal
Every corporation doing business in North 5. Complete Schedule K on page 3 of corporation return) must be used for North
Dakota that is required to file Federal Form 60—see page 6. Dakota income tax purposes. Fill in the
Form 1099 or W-2 must also file one with the 6. Complete Schedule KS on page 5 of applicable circle. If the corporation uses a
Office of State Tax Commissioner. For more Form 60—see page 9. fiscal year, enter the beginning and ending
information, obtain the guideline Income Tax dates of the fiscal year. Use the 2018
7. Complete lines 1 through 13 on page 1
Withholding: Information Returns. of Form 60—see page 10. Form 60 only if the corporation’s tax year
began in the 2018 calendar year.
Disclosure notification 8. Complete Schedule K-1, if required, for
the shareholders—see page 11.
Upon written request from the chairman of a Item B
North Dakota legislative standing committee Name and address
Rounding of numbers. Numbers may be
or Legislative Management, the law requires Enter the legal name of the corporation on
entered on the return in dollars and cents, or
the Office of State Tax Commissioner to the first line of the name and address area.
they may be rounded to the nearest whole
disclose the amount of any deduction or If the corporation publicly operates under a
dollar. If rounding, drop the cents if less
credit claimed on a tax return. Any other fictitious or assumed name (which, in most
than 50 cents and round up to the next whole
confidential information, such as a taxpayer’s states, must be recorded or registered with
dollar amount if 50 cents or higher. For
name or federal employer identification the state), enter that name on the second
example, $25.36 becomes $25.00, and $25.50
number, may not be disclosed. line of the name and address area. If filing
becomes $26.00. an amended return, enter the most current
address.
Use of information Fiscal year filers. The tax year for North
All of the information on Form 60 and its Dakota income tax purposes must be the Item C
attachments is confidential by law and cannot same as the tax year used for federal income Federal EIN
be given to others except as provided by tax purposes. Use the 2018 Form 60 if the North Dakota uses the federal employer
state law. Information about the shareholders corporation’s taxable year began in the 2018 identification number (FEIN or federal EIN)
is required under state law so the Office of calendar year. Note: Use the 2017 Form 60 if for identification purposes. Enter the federal
State Tax Commissioner can determine the the taxable year began in the 2017 calendar employer identification number from page 1
shareholder’s correct North Dakota taxable year. of Federal Form 1120S.
income and verify if the shareholder has filed
a return and paid the tax. Item D
Business code number
Enter the business code from the NAICS
code list found on the Office of State Tax
Commissioner’s website at www.nd.gov/tax.
Enter the code that most closely describes the
industry from which the corporation derives
the majority of its income.
Item E
Date incorporated
Enter the date the business incorporated from
page 1 of Federal Form 1120S.
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Item F • 100% North Dakota corporation business income by the apportionment factor
Indicators If the corporation conducted all of its to determine the portion of its business
Fill in all applicable circles, as follows: trade or business within North Dakota income attributable to North Dakota.
Initial return. Fill in if this is the first return during the tax year, skip lines 1 through
filed in North Dakota by the corporation. 13 and enter “1.000000” on line 14 of If the corporation includes the distributable
Schedule FACT. share of income from a partnership in its
Final return. Fill in if this is the last return to apportionable business income, include
be filed in North Dakota by the S corporation. • Multistate corporation in the numerator and denominator of each
If the corporation conducted its trade or factor the corporation’s proportionate share
Farming/ranching corporation. Fill in if business both within and without North of the partnership’s apportionment factors—
the corporation is registered as a farming or Dakota during the tax year, complete see the specific line instructions for more
ranching corporation with the North Dakota lines 1 through 14 of Schedule FACT. information. Do not include in the factors
Secretary of State. However, if all of the shareholders consist any property, payroll, or sales related to
Composite return. Fill in this circle only of only North Dakota resident individuals, allocable nonbusiness income—see the
if (1) the corporation has one or more estates, and trusts, and the corporation is instructions to Form 60, Schedule K, line 21,
nonresident shareholders eligible to be not required to complete Schedule BG, for what constitutes allocable nonbusiness
included in a composite filing and (2) all skip lines 1 through 13, and enter income.
of them elected to include their distributive “1.000000” on line 14 of Schedule FACT.
If the amount of any factor’s denominator is
shares of North Dakota source income in a zero, exclude that factor from the calculation.
composite filing. See “Composite filing” on Apportionment factor in
page 3 for more information. general Special apportionment rules may apply
in the case of certain industries or unique
Amended return. Fill in if this return is In general, the apportionment factor is a circumstances. For additional information
being filed to correct a previously filed 2018 product of a formula consisting of an equally- on the apportionment factor, see N.D.C.C.
Form 60. See “Correcting a previously filed weighted average of three factors: property, ch. 57-38.1 and N.D. Admin. Code
return” on page 3 for more information. payroll, and sales. Each factor represents ch. 81-03-09.
the percentage of the corporation’s North
Extension. Fill in if a federal or state Dakota activity compared to its total activity
extension of time to file the return was everywhere. A corporation multiplies its
obtained. See “Extension of time to file” on
page 2 for more information.
Item G
Number of shareholders Worksheet for Schedule BG, Line 6
Enter the total number of shareholders. Also North Dakota net operating loss deduction
enter the number of each type of shareholder. 1. Net recognized built-in gain from Form 60,
For “Trust/estate shareholders,” only include Schedule BG, line 2 ............................................................ 1 _________________
trusts that are not tax-exempt organizations 2. Apportionment factor from Schedule BG, line 4 ...................... 2 __.__ __ __ __ __ __
for federal income tax purposes.
3. North Dakota apportioned built-in gain.
Multiply line 1 by line 2 ....................................................... 3 _________________
Item H
Qualified subchapter S subsidiary 4. Accumulated North Dakota net
Indicate whether the corporation is a parent operating loss as of the end of the
last tax year as a C corporation.
of one or more qualified subchapter S Enter as a positive number .................. 4_________________
subsidiaries. Attach a statement to Form 60
listing the name and federal employer 5. Portion of line 4 that was previously
deducted for North Dakota income tax
identification number of each qualified purposes by the corporation.
subchapter S subsidiary. Enter as a positive number .................. 5_________________
6. Remaining North Dakota net operating loss.
Subtract line 5 from line 4. If less than zero, enter -0- ........... 6 _________________
Instructions for
7. North Dakota net operating loss deduction. Enter smaller of
Schedule FACT line 3 or line 6. Enter result on Schedule BG, line 6 ................ 7 _________________
(Form 60, page 2)
General instructions
2018 Corporation Tax Rate Schedule
All corporations must complete the applicable If the amount on
portions of Schedule FACT as follows: Schedule BG, line 7 is: The tax is equal to:
Over But not over
$ 0 $ 25,000 ...................................... 1.41% of the amount on line 7
25,000 50,000 ......$ 352.50 + 3.55% of the amount over $ 25,000
50,000 ................................1,240.00 + 4.31% of the amount over 50,000
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Specific line instructions Whether or not state income tax was withheld
from an employee’s compensation does not Instructions for
affect where the compensation is assigned Schedule BG
Property Factor for apportionment factor purposes. Include (Form 60, page 2)
on this line in the applicable column the An S corporation that is subject to the federal
Lines 1 through 6 corporation’s share of the payroll factor from income tax on excess net passive income
Owned and rented property a North Dakota Schedule K-1 (Form 58), or built-in gains is subject to North Dakota
Enter on the applicable line the average value Part 6. For more complete information on income tax on the same income and must
of real and tangible personal property owned the payroll factor, see N.D. Admin. Code complete Schedule BG.
and rented by the corporation. For owned §§ 81-03-09-22 through 81-03-09-25.
property, this generally means the average of
the original cost (before depreciation) used Line 4
Apportionment factor
for federal income tax purposes. For rented Sales Factor
If the corporation conducts its trade or
property, this generally means the amount of
rent paid multiplied by eight. Certain property Line 9 business both within and without North
items are subject to special rules. Do not Everywhere sales Dakota during the tax year (multistate
include amounts related to construction in Enter the corporation’s total sales or receipts, corporation), it must complete lines 1
progress. Include on line 5 the corporation’s less returns or allowances, for the tax year. through 14 of Schedule FACT to calculate
share of the property factor from a North Sales generally means all gross receipts of an apportionment factor to enter on
Dakota Schedule K-1 (Form 58), Part 6. a corporation. However, the types of sales Schedule BG, line 4.
or gross receipts included in the sales factor
The average value of owned and rented depend on the nature of the corporation’s Line 6
North Dakota NOL deduction
property is assigned to North Dakota if the regular business activities and may include
If the corporation has always been an S
property is located in North Dakota. The amounts other than sales reported on
corporation, enter zero on this line. However,
amount attributable to mobile property is Form 1120S, line 1. Include on this line
if a corporation changed from a C corporation
generally assignable to North Dakota based the corporation’s share of the everywhere
to an S corporation under an election first
on a ratio of the property’s time spent in sales from a North Dakota Schedule K-1
made on or after January 1, 1987, it may
North Dakota. For more complete information (Form 58), Part 6.
on the property factor, see N.D. Admin. Code carry forward an unused North Dakota net
§§ 81-03-09-15 through 81-03-09-21 and Line 10 operating loss incurred while a C corporation
81-03-09-33. North Dakota sales and deduct it from the apportioned built-in
For sales of tangible property, the sale is gain subject to North Dakota tax. Complete
assigned to North Dakota if the destination the Worksheet for Schedule BG, Line 6 on
Payroll Factor of the property is in North Dakota, regardless page 5 to calculate the amount to enter on
Line 8 of the shipping terms. For sales of other than this line. Attach a copy of the worksheet to
Enter the amount of total compensation paid tangible property, the sale is assigned to North Form 60.
to employees for the tax year. This includes Dakota if the income-producing activity
gross wages, salaries, commissions, and which gave rise to the receipt is performed
any other form of remuneration paid to the in North Dakota. Include on this line the
employees. Use the amount before deductions corporation’s share of the North Dakota Instructions for
for deferred compensation, flexible spending sales from a North Dakota Schedule K-1 Schedule K
plans, and other payroll deductions. Do (Form 58), Part 6. For more complete (Form 60, page 3)
not include amounts paid for employee information, see N.D. Admin. Code
benefit plans that are not considered taxable §§ 81-03-09-26 through 81-03-09-31 and All corporations must complete Schedule K.
wages to the employee. An employee is an 81-03-09-34. The purpose of this schedule is to show the
individual treated as an employee under the total amount of North Dakota adjustments,
Line 11 credits, and other items distributable to its
usual common law rules, which generally Throwback sales
shareholders. These items may be applicable
mirror an individual’s status for purposes of Enter the amount of sales shipped from a
to the preparation of the shareholders’ North
unemployment compensation and the Federal location in North Dakota that are delivered
Dakota income tax returns.
Insurance Contribution Act. to the U.S. government or to another state or
Compensation of an employee’s services country where the sales are not subject to a Include on the applicable lines of Schedule K
performed entirely within North Dakota is tax measured by income in that jurisdiction. any adjustments, credits, etc., from a North
assigned to North Dakota. For an employee For more complete information, see N.D. Dakota Schedule K-1, as instructed in the
whose services are performed in more than Admin. Code §§ 81-03-09-29 and partner or beneficiary instructions to that
one state, compensation is generally assigned 81-03-09-30. form.
to North Dakota based on the amount of
compensation reported to North Dakota Line 14 Reminder: Be sure to attach to Form 60
Apportionment factor
for unemployment compensation purposes. any prescribed schedule or other supporting
Divide line 13 by the number of factors document specified in the instructions.
having an amount greater than zero in
column 1 on lines 7, 8, and 12. Enter the
result on this line.
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Property tax clearance Line 3 if claiming an agricultural commodity
North Dakota Century Code §57-01-15.1 New or expanding business income processing facility investment credit from
provides that, before certain state tax exemption a North Dakota Schedule K-1, attach a
incentives may be claimed, a taxpayer If the corporation qualified for the new statement identifying the facility in which
must obtain a property tax clearance record or expanding business income exemption the investment was made.
from each North Dakota county in which under N.D.C.C. ch. 40-57.1, enter the
the taxpayer holds a 50 percent or more exempt portion of the corporation’s trade Line 7
ownership interest in real property. The or business income. See N.D. Admin. Code Biodiesel or green diesel fuel
property tax clearance record(s) must be § 81-03-01.1-06 for guidance on calculating blending tax credit
attached to the North Dakota tax return on the amount of the exempt income. Attach a If the corporation is a licensed supplier of
which the incentive is claimed. Certain statement showing the calculation of the biodiesel or green diesel fuel, it is allowed
tax incentives on Form 60, Schedule K, are exempt income. a credit equal to five cents per gallon for
subject to this requirement. The incentives blending biodiesel or green diesel fuel having
subject to this requirement are identified in Line 4a at least a 5% blend (“B5”) that meets ASTM
Renaissance zone historic property
the box at the top of Schedule K. specifications. The blending must be done in
preservation tax credit North Dakota. For this purpose, a “supplier”
Enter on this line the amount from
If the corporation is claiming any of the means a person who distributes the biodiesel
Schedule RZ, Part 7, line 4. Attach
specified incentives, it must complete the or green diesel fuel from a terminal in North
Schedule RZ.
property tax clearance section at the top of Dakota. Enter the credit on this line. See
N.D.C.C. §57-38-01.22. Attach a statement
Schedule K. If the corporation is required to Line 4b showing the calculation of the credit.
attach a property tax clearance record, obtain Renaissance fund organization
one by completing the form Property Tax investment tax credit Line 8
Clearance Record, which is available on the Enter on this line the amount from Biodiesel or green diesel fuel sales
Office of State Tax Commissioner’s website. Schedule RZ, Part 7, line 5. Attach equipment tax credit
Schedule RZ. If the corporation is a licensed seller of
Line 1
biodiesel or green diesel fuel, it is allowed a
Interest from U.S. obligations Line 4c credit equal to 10% of the costs to adapt or
Enter on this line interest income from U.S. Renaissance zone nonparticipating
add equipment to its North Dakota facility to
obligations and from securities the interest property owner tax credit
enable it to sell diesel fuel having at least a
of which is specifically exempted from state Enter on this line the amount from
2% biodiesel or green diesel blend (“B2”) that
income tax by federal statute. Include the Schedule RZ, Part 7, line 6. Attach
meets ASTM specifications. For this purpose,
portion of dividend income from a mutual Schedule RZ.
fund attributable to the fund’s investment in a “seller” means a person who acquires the
the same kinds of securities. Line 5 fuel from a wholesale supplier or distributor
Seed capital investment tax credit for resale to a consumer at a retail location.
Do not enter on this line interest income If the corporation invested in a qualified Except for costs incurred before January 1,
from securities of the Federal Home Loan business for purposes of the seed capital 2005, include eligible costs incurred before
Mortgage Corporation (Freddie Mac), Federal investment tax credit, multiply the total the tax year in which sales of the eligible
National Mortgage Association (Fannie amount invested during the 2018 tax year by biodiesel or green diesel fuel begin. The
Mae), or Government National Mortgage 45% and enter the result on this line. See credit is allowed in each of five tax years,
Association (Ginnie Mae), nor from a federal N.D.C.C. ch. 57-38.5. Attach a copy of the starting with the tax year in which sales of the
income tax refund or repurchase agreement. Qualified Seed Capital Business Investment eligible biodiesel or green diesel fuel begin.
Attach a statement identifying the specific Reporting form. Or, if claiming a seed Enter the credit on this line. See N.D.C.C.
securities from which the interest was capital investment credit from a North § 57-38-01.23. Attach a statement showing
derived. Dakota Schedule K-1, attach a statement the calculation of the credit.
identifying the qualified business in which
Line 2a Line 9
Renaissance zone exemption the investment was made.
Geothermal energy device tax credit
(Projects approved before 8/1/13) Note: The geothermal energy device
Line 6
Enter on this line the amount from Ag commodity investment tax credit income tax credit expired on December 31,
Schedule RZ, Part 7, line 1c. Attach If the corporation invested in a qualified 2014, and the credit is not allowed for a
Schedule RZ. business for purposes of the agricultural geothermal energy device installed on or
commodity processing facility investment after January 1, 2015.
Line 2b
Renaissance zone exemption tax credit, multiply the total amount invested Complete this line only if any of the
(Projects approved after 7/31/13) during the 2018 tax year by 30% and enter the following apply:
Enter on this line the amount from result on this line. The corporation is allowed
Schedule RZ, Part 7, line 1h. Attach no more than $250,000 in total credits for The corporation completed the installation
Schedule RZ. investments made in tax years 2005 and of a qualifying geothermal energy device
after. See N.D.C.C. ch. 57-38.6. Attach on or after January 1, 2009, and before
a copy of the Ag Commodity Processing January 1, 2015, and the 2018 tax year
Facility Investment Reporting form. Or, is one of the five tax years in which the
credit is allowed for the installation.
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The corporation is claiming an allowable
credit from a North Dakota Schedule K-1. Worksheet for Schedule KS, Column 6
For nonresident individual shareholders only—
For more information, see N.D.C.C. see instructions to Schedule KS, Column 6.
§ 57-38-01.8. Attach a statement with a 1. Shareholder’s amount from Column 5 ................................... 1 _________________
description of the device, a detailed list of
2. Allocable income (less related expenses) included in the
the costs of acquisition and installation, amount on line 1 ................................................................ 2 _________________
and the date the device was completely
installed. 3. Interest from U.S. obligations included in the amount on line 1 3 _________________
4. Add lines 2 and 3 ............................................................... 4 _________________
Line 10 5. Apportionable income (loss). Subtract line 4 from line 1 .......... 5 _________________
Employer internship program credit
If the corporation hired an eligible college 6. Apportionment factor from Schedule FACT, line 14 .................. 6 __.__ __ __ __ __ __
student under a qualifying internship program 7. Multiply line 5 by line 6 ....................................................... 7 _________________
set up in North Dakota, it is allowed a credit 8. Allocable income (less related expenses) reportable to
equal to 10% of the compensation paid North Dakota ................................................................... 8 _________________
to the intern. For details, see N.D.C.C. 9. Add lines 7 and 8. Enter result in Column 6........................... 9 _________________
§ 57-38-01.24. The corporation is allowed no
more than $3,000 of credits for all tax years.
Line 10a. Enter the allowable credit on this Line 13 the credit equals 50% of the contributions
line. Workforce recruitment tax credit made to all eligible schools within the
If the corporation employs extraordinary category. (Note: Additional limitations on
Line 10b. Enter the number of eligible recruitment methods to hire an employee to the allowable credit apply at the shareholder
interns hired during the 2018 tax year. fill a hard-to-fill position in North Dakota, level.) An S corporation may elect, on a
Disregard this line if the credit is from a it is allowed a tax credit equal to 5% of the contribution by contribution basis, to treat a
passthrough entity. compensation paid during the first 12 months contribution as having been made during the
Line 10c. Enter on this line the total to the employee hired to fill that position. 2018 tax year if it is made on or before the
compensation paid to eligible interns during The credit may be claimed in the first due date, including extensions, for filing the
the 2018 tax year (as shown on their 2018 taxable year beginning after the employee 2018 Form 60. See N.D.C.C.
Form W-2s). Disregard this line if the credit completes the first 12 consecutive months § 57-38-01.7. For a list of the eligible
is from a passthrough entity. of employment. For details, see N.D.C.C. schools within each of the three categories
§ 57-38-01.25. of schools, see the table on page 13 of this
Line 11 booklet.
Research expense tax credit Line 13a. Enter the allowable credit on this
A credit is allowed for conducting qualified line. To qualify, a contribution must be made
directly to, or specifically designated for
research in North Dakota. For details, see Line 13b. Enter the number of eligible
the exclusive use of, a qualifying school.
N.D.C.C. §57-38-30.5. Enter the allowable employees whose first 12 months of
If a contribution is made to an account
credit on this line. Attach a statement employment ended during the corporation’s
or fund that benefits both qualifying and
showing the computation of the base 2017 tax year.
amount and the credit. nonqualifying schools, the contribution
Line 13c. Enter the total compensation paid will qualify only if the donor specifically
Line 12 to the eligible employees during their first 12 designates it for the exclusive use of a
Endowment fund tax credit consecutive months of employment ending in qualifying school and the account or fund
A tax credit is allowed for making a the corporation’s 2017 tax year. separately accounts for the funds on behalf of
contribution to a qualified endowment fund. the qualifying school. The donor must obtain
For more information, see Schedule QEC (for Line 14 a statement from the administrator of the
filers of Forms 38, 40, 58, and 60). Attach Credit for wages paid to a mobilized account or fund that identifies the qualifying
employee
Schedule QEC. school and shows the amount contributed to
Enter on this line the amount from it.
Lines 12a and 12b. Enter on these lines the Schedule ME, line 13. See N.D.C.C.
applicable amounts from Schedule QEC. § 57-38-01.31. Attach Schedule ME. If a contribution is made to a qualifying
school that provides education in one or more
Lines 12c and 12d. Enter on these lines Lines 15 through 17 grades in both the primary school category
an endowment fund credit and the related Nonprofit private school tax credits (kindergarten through 8th grades) and the
contribution amount shown on a North Tax credits are allowed for making charitable secondary school category (9th through 12th
Dakota Schedule K-1 received from an estate, contributions to qualifying nonprofit private grades), a separate credit is allowed for the
trust, partnership, or S corporation. primary, secondary, and higher education portion of the contribution designated for
schools located in North Dakota. A separate the exclusive use of each school category.
credit is allowed for each of the three The donor must obtain a statement from the
categories of school—primary, secondary, and qualifying school that identifies the qualifying
higher education. For each category of school, school and shows the amount contributed to
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9
each category of school. If the donor does • It has one or more nonresident individual, Line 20
not obtain a statement showing how the estate, or trust shareholders. Disposition of I.R.C. Section 179
contribution is allocated to each category • It has allocable nonbusiness income. property
of school, one-half of the total contribution Generally, all income received by a Lines 20a through 20d apply only if the
will be deemed to have been made to each corporation is considered business corporation sold, exchanged, or disposed
category of school. income unless clearly classifiable as of property for which an I.R.C. Section 179
nonbusiness income. The classification deduction was passed through to the
Line 15. Enter on this line the allowable shareholders. Note: The corporation is
of income by the labels used to describe
credit for contributions to qualified nonprofit required to report this same information on
it—for example, interest, dividends,
private primary schools. a separate statement attached to Federal
rents, royalties, operating income, or
Line 16. Enter on this line the allowable nonoperating income—is generally not Form 1120S, Schedule K, line 17d.
credit for contributions to qualified nonprofit relevant in determining whether income For lines 20a through 20d, multiply the
private high schools. is businsess or nonbusiness income. For corresponding combined amount for
more information, see N.D. Admin. Code
Line 17. Enter on this line the allowable all shareholders as reported on Federal
§ 81-03-09-03.
credit for contributions to qualified nonprofit Form 1120S, Schedule K, line 17d, by the
private colleges. Nonbusiness income is not apportioned North Dakota apportionment factor from
using the apportionment factor (from Schedule FACT, line 14, and enter the result.
Line 18 - Angel investor investment Schedule FACT) but is allocated within or However, if the property disposed of is treated
credit without North Dakota as provided under as a nonbusiness asset the gain or loss from
N.D.C.C. §§ 57-38.1-04 through 57-38.1-08 which is subject to allocation under N.D.C.C.
Important! This line is only for credits and N.D. Admin. Code § 81-03-09-09. §§ 57-38.1-04 through 57-38.1-08, subtract
attributable to investments made in qualified Expenses must be attributed to the the amounts for that asset before multiplying
businesses by angel funds organized and nonbusiness income in a manner that fairly by the apportionment factor. Include the
certified on or after July 1, 2017. distributes all of the corporation’s expenses to nonbusiness gain or loss from the disposition
If an S corporation is a member of a North its business and nonbusiness income. on Form 60, Schedule K, line 19.
Dakota angel fund that is organized and If the corporation has an item of nonbusiness
certified on or after July 1, 2017, a credit is income subject to allocation, the corporation
allowed to the corporation if it participates must take this into account when calculating Instructions for
in a qualified investment made by the angel the North Dakota distributive share of
fund in a qualified business. The angel fund income or loss reportable on Schedule KS Schedule KS
is required to provide a Participating Angel and Schedule K-1 (Form 60). See the (Form 60, page 5)
Investor Statement to the S corporation, instructions to Schedule KS, Column 6, for
which evidences the corporation’s investment. more information. In addition to completing Schedule KS must be completed to provide
For qualified investments made after June 30, lines 19a and 19b, the corporation must attach information about each shareholder. If the
2017, that fall into the S corporation’s 2018 the following to Form 60: corporation has more than seven shareholders,
tax year, multiply the investment amount complete and attach additional schedules as
by the applicable credit rate shown on the • A statement on which each item of needed to list all shareholders. If more than
statement. If an S corporation participates in nonbusiness income is shown along with one Schedule KS is needed, complete lines 1
more than one qualified investment during its related expenses. through 4 on only one of them, and include
the tax year, calculate the credit separately for the combined amount for all of the schedules
• A statement explaining the basis
each Participating Angel Investor Statement on that one schedule.
for treating the item of income as
received and add the separately calculated
nonbusiness income subject to allocation.
amounts. All Shareholders
• If an item of nonbusiness income is
Enter the credit amount on this line. Do (Columns 1 through 5)
allocated to a state other than North
not enter on this line an angel investor
Dakota, a copy of that other state’s
credit from a North Dakota Schedule K-1. Columns 1 and 2
income tax return must be attached. If
See N.D.C.C. §57-38-01.26 (effective for Enter the name, mailing address, and
the corporation is not required to file an
investments made after June 30, 2017). shareholder’s identifying number as shown
income tax return with the other state, on the shareholder’s Federal Schedule K-1.
Attach a copy of the Participating Angel the corporation must indicate this in the If the shareholder is a single member limited
Investor Investment Statement. attached statement. liability company (LLC) that is a disregarded
Line 19 Line 19a. Enter the total allocable income entity for federal income tax purposes, enter
Allocable nonbusiness income (less related expenses) from all sources within the owner’s name, address, and identifying
Lines 19a and 19b apply only if the and without North Dakota. number.
corporation meets all of the following: Line 19b. Enter the portion of the amount on Column 3
• It is a multistate corporation, i.e., it carries line 19a that is allocable to North Dakota. Identify the entity type of the shareholder by
on its business both within and without entering the applicable code letter as follows:
North Dakota.
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10
Entity type Code letter • a trust, including a grantor trust, that is
Individual ................................ I not organized under North Dakota law. Specific line
Trust ........................................T This only applies to trusts that are subject instructions for
Decedent’s estate .....................D to income tax.
Bankruptcy estate ....................B page 1 of Form 60,
Column 6
Exempt organization ...............O
Complete Column 6 for each nonresident lines 1-13
If the shareholder is a limited liability shareholder. Multiply the shareholder’s
company (LLC) that is a disregarded entity amount in Column 5 by the apportionment Complete Schedule FACT,
Schedule BG, Schedule K, and
for federal income tax purposes, enter the factor from Schedule FACT, line 14, and enter Schedule KS before completing
code letter for the type of entity of the LLC’s the result in Column 6. However, complete lines 1 through 13 on page 1 of
owner. the Worksheet for Schedule KS, Column 6 Form 60.
on page 8 to calculate the amount to enter in
Note: The “Trust” entity type only applies
Column 6 if either or both of the following Line 5
to a trust that files Federal Form 1041 or, Income tax withholding
apply:
in lieu of filing Federal Form 1041, elects Enter the North Dakota income tax
an alternative reporting method under the withholding shown on a 2018 Form 1099 or
• The corporation has an item of
federal income tax regulations. North Dakota Schedule K-1. Be sure the state
nonbusiness income subject to allocation.
Column 4 See the instructions to Form 60, identified on the Form 1099 is North Dakota.
Enter the shareholder’s stock ownership Schedule K, line 19, for more information. Also enter the North Dakota income tax
withholding shown on a 2017 North Dakota
percentage as shown on the shareholder’s • The amount in Column 5 includes interest Schedule K-1 if the entity that issued it has
Federal Schedule K-1. from U.S. obligations. a fiscal tax year ending in the corporation’s
2018 tax year. Do not enter on this line
Column 5 Column 7
North Dakota extraction or production taxes
Enter the sum of the following items from If a nonresident shareholder’s distributive
withheld from mineral interest income, such
the shareholder’s Federal Schedule K-1 share of North Dakota income in Column
as an oil or gas royalty, because they are
(Form 1120S), Part III: 6 is $1,000 or more, multiply the amount
not income taxes. Attach a copy of the
Box 1 Ordinary business income (loss) in Column 6 by 2.90% (.029) and enter the
Form 1099 or North Dakota Schedule K-1.
Box 2 Net rental real estate income (loss) result in Column 7. However, the following
Box 3 Other net rental income (loss) exceptions apply: Line 6
Box 4 Interest income • If the nonresident shareholder gives you a Estimated tax payments
Box 5a Ordinary dividends completed Form PWA, enter the amount Enter the amount paid with the 2018
Box 6 Royalties from line 6 of Form PWA in Column 7 Forms 60-EXT and 60-ES plus any
Box 7 Net short-term capital gain (loss) and fill in the circle under “Form PWA or overpayment applied from the 2017 Form 60.
Box 8a Net long-term capital gain (loss) Form PWE.” However, if filing an amended return, do
Box 9 Net section 1231 gain (loss) not enter any previously paid estimated tax
Box 10 Other income (loss) • If the nonresident shareholder gives amount; instead, enter the amount of the total
Box 11 Section 179 deduction you a completed Form PWE, leave taxes due from line 4 of the previously filed
Box 12 Other deductions (Only include the Column 7 blank and fill in the circle under original or amended return.
deductions allowed as a deduction “Form PWA or Form PWE.”
Line 9
from gross income in calculating • If the nonresident shareholder elected to Application of overpayment to 2019
adjusted gross income for federal be included in a composite filing, leave If there is an overpayment on line 8, the
income tax purposes.) Column 7 blank and see the instructions to corporation may elect to apply part or all of
Box 17 Include the gain (loss) from I.R.C. Column 8. it as an estimated payment toward its 2019
Section 179 property disposition
(For purposes of calculating the See “Withholding from nonresident tax liability. To make the election, enter the
gain or loss, include all of the shareholders” on page 3 for more information. portion of line 8 to be applied on line 9. If this
Section 179 deduction passed election is made, the election and the amount
through to the shareholder, Column 8 applied may not be changed after the return
regardless of whether or not the Note: Leave Column 8 blank if Column 7 was is filed. If this is an amended return, do not
shareholder actually deducted all of completed for the nonresident shareholder. make an entry on this line.
it.) Complete Column 8 for each nonresident Line 11
shareholder electing to be included in a Tax due
Nonresident Shareholders Only composite filing. Multiply the amount A tax due must be paid in full with the return
(Columns 6 through 8) in Column 6 by 2.90% (.029) and enter when it is filed. See the instructions to line 13
the result in Column 8. If the amount in for payment options.
For purposes of Columns 6 through 8, a Column 6 is zero or less, enter zero in
nonresident shareholder means: Column 8. See “Composite filing” on page 3
for more information.
• an individual who is not domiciled in
North Dakota, or
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11
Line 12 Electronic funds transfer—A payment • Each shareholder that is a qualified
Penalty and interest may be made by means of an Automated subchapter S trust (QSST) or an
The Office of State Tax Commissioner will Clearing House (ACH) credit transaction electing small business trust (ESBT)
notify the corporation of any penalty and that the taxpayer initiates through its with a nonresident individual or estate
interest payable on a tax due shown on banking institution. For more information, beneficiary.
Form 60. However, the corporation may go to our website at www.nd.gov/tax.
calculate the penalty and interest amounts and If there are no North Dakota adjustments or
include them in the balance due on Form 60. If paying with a paper check or money order, tax credits on Form 60, Schedule K, lines 1
complete a Form 60-PV payment voucher through 18, a North Dakota Schedule K-1
Penalty. Calculate the penalty amount as and enclose it with the payment. Make the does not have to be given to a North Dakota
follows: check or money order payable to “ND State resident individual, estate, or trust.
• If Form 60 is filed by the due date (or Tax Commissioner,” and write the last four
In addition to the North Dakota Schedule K-1
extended due date), but the total amount digits of the corporation’s FEIN and “2018
(Form 60), the corporation must provide the
of tax due is not paid with the return, the Form 60” on the check or money order. A
shareholder with a copy of the Shareholder’s
penalty is equal to 5% of the unpaid tax or check must be drawn on a U.S. or Canadian
Instructions for North Dakota Schedule K-1
$5.00, whichever is greater. bank, be in U.S. dollars, and use a standard
(Form 60).
9-digit routing number. A check drawn on a
• If Form 60 is filed after its due date foreign bank (except one in Canada) cannot A copy of all North Dakota Schedule K-1
(or extended due date), and there is an be accepted. forms must be enclosed with Form 60 along
unpaid tax due on it, a penalty equal to with any required supplemental statements.
5% of the unpaid tax due (with a $5.00
minimum) applies for the month the return Instructions for Amended schedule. If a corporation files an
was due, plus 5% of the unpaid tax due amended Form 60, the corporation must issue
(with a $5.00 minimum) for each month Schedule K-1 amended North Dakota Schedule K-1 forms
or fraction of a month the return remains to its shareholders. Fill in the “Amended”
With the exception of the taxes on excess net
unfiled, not to exceed the greater of 25% circle at the top of the North Dakota Schedule
passive income and built-in gains (calculated
of the unpaid tax due or $25.00. K-1 (Form 60).
on Schedule BG), an S corporation is
Interest. Calculate the interest amount as not subject to North Dakota income tax. Final schedule. Fill in the “Final” circle at
follows: Instead, the shareholders are responsible for the top of the North Dakota Schedule K-1 if it
reporting and paying any applicable North is the last one to be issued by the corporation
• If an extension of time to file Form 60 was Dakota income tax on their shares of the to the shareholder.
obtained, extension interest is calculated corporation’s income reportable to North
at the rate of 12% per year on any tax Dakota. Part 2
due from the due date of the return to the
Shareholder information
earlier of the extended due date or the date North Dakota Schedule K-1 (Form 60) must
the return was filed. be used by an S corporation to provide its Item E
shareholders with information they will Enter the code letter for the shareholder from
• If the total amount of tax due is not paid need to complete a North Dakota income Form 60, Schedule KS, Column 3.
by the due date (or extended due date) of tax return. The information to be included
the return, interest is calculated at the rate in the schedule will depend on the type of Item F
of 1% per month or fraction of a month shareholder. In the case of certain credits If the shareholder is an individual, estate, or
on the unpaid tax, except for the month in reported on Schedule K-1 (Form 60), trust, fill in the applicable circle to indicate
which the return was due. additional supporting information must the legal residency status of the shareholder
Line 13 be provided with Schedule K-1—see the for North Dakota income tax purposes. If
Balance due instructions to Part 3. an individual shareholder changed his or
The balance due must be paid in full with North Dakota Schedule K-1 (Form 60) must her legal residency to or from North Dakota
the return. The payment may be made be completed and given to: during the tax year, check the part-year
electronically in one of the following ways. resident status. In the case of an estate or trust
• Each nonresident shareholder for which shareholder, only the full-year resident or full-
Online—A payment may be made online the corporation is required to report the year nonresident status will apply.
with an electronic check or a debit or North Dakota distributive share of income
credit card. The electronic option is free. on Form 60, Schedule KS, Column 6. Item G
North Dakota contracts with a national • Each shareholder to which a share of a For an eligible nonresident shareholder,
payment service to provide the debit or North Dakota adjustment or tax credit indicate whether the shareholder is included
credit card option. There is a fee for the from Form 60, Schedule K, lines 1 in a composite filing by filling in the
debit or credit card option, none of which through 18, is distributable. applicable circle.
goes to the State of North Dakota. To pay
online, go to www.nd.gov/tax/payment.
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12
Part 3 For “Other deductions” from box 12 Part 5
All shareholders— of Federal Schedule K-1, only include Nonresident shareholder
deductions that are allowed as a deduction
North Dakota adjustments only
from gross income in calculating adjusted
Complete Part 5 for a nonresident shareholder
and tax credits gross income for federal income tax purposes.
If there are any North Dakota adjustments for which an amount was required to be
or tax credits on Form 60, Schedule K, For purposes of calculating the gain or entered on Form 60, Schedule KS, Column 6.
lines 1 through 18, complete this part for all loss for I.R.C. § 179 property dispositions
shareholders. included in box 17 of Federal Schedule K-1, Line 33
include all of the Section 179 deduction ND distributive share of income
Lines 1 through 18 passed through to the shareholder, regardless (loss)
Enter on the corresponding lines the of whether or not the shareholder actually Enter the shareholder’s North Dakota
shareholder’s share of each amount shown deducted all of it. distributive share of income (loss) from
on Form 60, Schedule K, lines 1 through 18. Form 60, Schedule KS, Column 6.
Exception 1: Allocable (nonbusiness)
Also, for the following lines, additional
income. If the corporation treated any Line 34
supporting information must be provided with ND income tax withheld
part of a distributable item of income
Schedule K-1: Enter the amount of North Dakota income tax
from the shareholder’s Federal Schedule
K-1 as nonbusiness income subject to withheld from the shareholder’s North Dakota
Lines 5 and 6. Provide a statement distributive share of income from Form 60,
allocation, calculate the amount to enter on
identifying the qualified business or qualified Schedule KS, Column 7.
the corresponding line of this part in the
agricultural commodity processing facility in
following steps:
which the qualifying investment was made. Line 35
1. Subtract the net nonbusiness income ND composite income tax
Line 12. Provide a statement identifying (gross amount less related expenses) Enter the amount of North Dakota composite
the qualified nonprofit organization and from the applicable distributable amount income tax on the shareholder’s North Dakota
the qualified endowment fund to which the shown on the Federal Schedule K-1. distributive share of income from Form 60,
qualifying contribution was made. Schedule KS, Column 8.
2. Multiply the remaining distributive
Line 18. Provide a statement identifying the amount, if any, (from step 1) by the
angel fund that made the qualified investment corporation’s apportionment factor from
Before you file
in the qualified business. Schedule FACT, line 14.
3. Add the result (from step 2) to the Form 60
Part 4 portion, if any, of the net nonbusiness Signatures
Nonresident individual, income allocable to North Dakota, and The return must be signed and dated
estate, or trust shareholder enter the result on the corresponding line by a corporate officer or an authorized
of Part 4.
only—North Dakota income representative of the corporation.
(loss) Note: If any portion of the net nonbusiness If the corporation pays someone other than
Complete Part 4 for a nonresident individual, income removed from the distributable one of its employees to prepare the return,
estate, or trust shareholder. amount (in step 1 above) is allocable outside the paid preparer also must sign and date the
North Dakota, do not enter it anywhere on return.
Line 19 North Dakota Schedule K-1 (Form 60).
Corporation’s apportionment factor Preparer authorization check-off
Enter the corporation’s apportionment factor If the calculation of any amount on lines 20
from Form 60, Schedule FACT, line 14. through 32 of Part 4 was affected by the The corporation may authorize the North
removal or inclusion of net nonbusiness Dakota Office of State Tax Commissioner
Lines 20 through 32 income, attach a statement to the (Tax Department) to discuss matters
Income and loss items shareholder’s North Dakota Schedule K-1 pertaining to its 2018 Form 60 with the
Except as provided under Exception 1 (Form 60) identifying the net nonbusiness preparer who signed it. To do so, fill in the
and Exception 2 below, multiply the income and showing the calculation of the circle next to the signature area in the lower
corresponding amount from the shareholder’s amount entered on the applicable line(s) of right-hand corner of page 1 of Form 60. This
Federal Schedule K-1, Part III, boxes 1 Part 4. authorization applies only to the individual
whose signature and printed name appears in
through 12, and any I.R.C. § 179 property Exception 2: Interest from U.S. obligations. the paid preparer section of the signature area.
disposition gain (loss) included in box 17 by Do not include interest from U.S. obligations It does not apply to the firm, if any, shown in
the corporation’s apportionment factor from in determining the amount to enter on Part 4, that section.
Schedule FACT, line 14, and enter the result line 23.
on the corresponding line of Part 4, lines 20
through 32.
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This authorization allows the Tax Department
to contact the preparer to answer any Qualified nonprofit private schools
questions that may arise during the (for Form 60, Schedule K, lines 15 through 17)
processing of the corporation’s return. It For purposes of the credits on Form 60, Schedule K, lines 15 through 17, the following lists the
also authorizes the preparer to respond to qualifying schools in each school category. (Note: These lists are subject to change.)
questions and to provide any information
missing from the return, to contact the Tax Primary Schools (Grades K through 8)
Department to inquire about the status of
Academy for Children (Fargo) Ojibwa Indian School (Belcourt)
the return’s processing and related refund or
Anne Carlsen Center (Jamestown) Our Redeemer’s Christian School (Minot)
payment, and to respond to Tax Department Bishop Ryan Catholic School (Minot) Prairie Learning Education Center (Raleigh)
notices that the corporation shares with the Brentwood Adventist Christian School Prairie Voyager Adventist School
preparer pertaining to math errors or return (Bismarck) (Grand Forks)
preparation. (Tax Department notices will be Cathedral of the Holy Spirit Elementary School Red River Adventist Elementary School
sent only to the corporation.) (Bismarck) (Fargo)
This authorization automatically expires on Children’s Montessori Center (Fargo) Shanley High-Sullivan Middle School (Fargo)
Christ the King Elementary School (Mandan)
the due date (including extensions) for filing Shiloh Christian School (Bismarck)
Dakota Memorial School (Minot) St Alphonsus Elementary School (Langdon)
the 2019 Form 60.
Dakota Montessori School (Fargo) St Anne Elementary School (Bismarck)
This authorization does not authorize the Forest River School (Fordville) St Ann’s Catholic School (Belcourt)
preparer to receive a refund check, to bind Grace Lutheran Elementary School (Fargo) St Bernard Mission School (Fort Yates)
the corporation in any way (including any Grand Forks Montessori Academy St Catherine Elementary School (Valley City)
additional tax liability), or to represent the (Grand Forks) St John’s Academy (Jamestown)
corporation before the Tax Department for Hillcrest SDA School (Jamestown) St John’s Elementary School (Wahpeton)
any other purpose. Holy Family – St. Mary’s Elementary School St Joseph Elementary School (Mandan)
(Grand Forks) St Joseph Elementary School (Devils Lake)
Assembling a paper return Holy Spirit Elementary School (Fargo) St Joseph’s Elementary School (Williston)
Hope Christian Academy (Dickinson)
Please assemble Form 60 and its required St. Mary’s Academy (Bismarck)
Invitation Hill Adventist School (Dickinson) St Mary’s Elementary School (Bismarck)
attachments in the following order:
Johnson Corners Christian Academy St Michael’s Elementary School (Grand Forks)
1. Form 60. (Watford City) The Innovation School (Bismarck)
2. Schedule FACT / Schedule BG. Little Flower Elementary School (Rugby) Trinity Elementary East School (Dickinson)
Martin Luther School (Bismarck) Trinity Elementary North School (Dickinson)
2. Schedule K.
Missouri Valley Montessori School (Bismarck) Trinity Elementary School (West Fargo)
3. Schedule KS. Nativity Elementary School (Fargo) Trinity Elementary West School (Dickinson)
4. Schedule QEC. New Testament Baptist Christian School Trinity Jr/High High School (Dickinson)
(Larimore) Victory Christian School (Jamestown)
5. North Dakota Schedule K-1 forms.
Oak Grove Lutheran Elementary School Wichakini Owayawa Elementary School
6. Required supporting statements. (Fargo) (Fort Yates)
7. Complete copy of Form 1120S including Williston Trinity Christian School (Williston)
Federal Schedule K-1 forms.
High Schools (Grades 9 through 12)
A balance due may be paid electronically Anne Carlsen Center (Jamestown) Oak Grove Lutheran High School (Fargo)
(see page 11 of these instructions). If paying Bishop Ryan Catholic School (Minot) Our Redeemer’s Christian School (Minot)
with a paper check, enclose the check and Dakota Adventist Academy (Bismarck) Prairie Learning Education Center (Raleigh)
a Form 60-PV payment voucher with the Dakota Memorial School (Minot) Shanley High-Sullivan High School (Fargo)
return. Hope Christian Academy (Dickinson) Shiloh Christian School (Bismarck)
Johnson Corners Christian Academy St Mary’s Central High School (Bismarck)
(Watford City) Trinity Jr/High School (Dickinson)
New Testament Baptist Christian School Williston Trinity Christian School (Williston)
(Larimore)
Colleges (Education above 12th grade)
Jamestown College (Jamestown) United Tribes Technical College (Bismarck)
Trinity Bible College (Ellendale) University of Mary (Bismarck)
Turtle Mountain Community College ND Independent College Fund (Bismarck)
(Belcourt)
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