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2022
NORTH DAKOTA
FIDUCIARY INCOME TAX
FORM 38
Includes: Form 38 (Pages 1-3)
Schedule K-1
Photo credit:
ND Tourism
Tax forms, guidelines, and more are
available at www.tax.nd.gov.
Email questions to individualtax@nd.gov.
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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 2022 ................................................................................... 1
www.tax.nd.gov
General instructions ................................................................................2
Email
Who must file .....................................................................................2
Individual, estate and trust income
When and where to file ........................................................................ 3 tax—
Extension of time to file ....................................................................... 3 individualtax@nd.gov
Penalty and interest ............................................................................ 3
Estimated tax requirement (for 2023 tax year) ....................................... 3 Call
Withholding from nonresident beneficiary ............................................... 4 Questions 701-328-1258
Composite filing ..................................................................................4 Forms 701-328-1243
Correcting a previously filed return ........................................................ 4 Speech/hearing impaired
Reporting federal changes ....................................................................5 TDD 800-366-6888
W-2/1099 reporting requirement ..........................................................5
Write
Disclosure notification .........................................................................5 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 ..................................................................................... 10 Monday through Friday
Form 38, Page 1, Lines 1-17 ............................................................... 10 8:00 a.m. to 5:00 p.m.
(except holidays)
Schedule K-1 .................................................................................... 11
Before you file Form 38 ..................................................................... 12 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.tax.nd.gov. 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.tax.nd.gov
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1
Changes affecting estates and trusts
Developments, updates, and items of interest relating to estate and trust income tax
REMINDER: Form 38 efiling For questions and assistance, contact Eligibility for the credit was
requirement the Office of State Tax Commissioner extended to all taxpayers (not just
by sending an email to withhold@ C corporations), the credit rate was
House Bill 1082 passed by the 2021
nd.gov or calling 701-328-1248. increased from 5% to 25%, and
North Dakota Legislature requires a
the wages on which the credit is
partnership, S corporation, trust, or
other passthrough entity with 10 or REMINDER: Changes to allowed was changed from the first
more owners (or beneficiaries, if a employer withholding return $6,000 paid in the first 12 months of
trust) to file its North Dakota income and payment requirements employment to the first $6,000 paid
annually. The 2019 changes were
tax return and pay any tax due on House Bill 1082 passed by the 2021 effective only for the 2019 and 2020
it by electronic means. This new North Dakota Legislature made the tax years.
requirement applies to returns filed following changes affecting the income
for tax years 2022 and after. For tax withholding return and payment House Bill 1405 passed by the 2021
more information about electronic requirements for employers: North Dakota Legislature reinstated
filing of the North Dakota partnership
return (Form 58), S corporation • Effective for calendar years 2022 the 2019 changes for two additional
return (Form 60), or fiduciary return and after, an employer may file tax years—2021 and 2022—after
(Form 38), go to www.tax.nd.gov Form 306, Income Tax Withholding which the changes will expire, and the
and click on For Businesses>E-File. Return, on an annual basis instead law will revert to how it read prior to
of quarterly if the amount of North 2019.
Dakota income tax withheld in
REMINDER: Change to efiling To qualify for the credit, an employer
the previous calendar year was
requirement for W-2s and less than $1,000. This is a $500 must apply for and obtain from the
1099s increase in the threshold applicable North Dakota Department of Human
Beginning with returns that are due to calendar years before 2022. Services, Vocational Rehabilitation
on January 31, 2023, businesses are Division, a letter certifying that the
required to electronically file Forms • Effective for calendar years 2022 individual has a severe developmental
W-2 and 1099. and after, Form 306, Income or mental disability, is eligible
Tax Withholding Return, and the for the agency’s services, and
Electronically filing these forms can tax due on it must be submitted requires customized or supported
easily be done in one of the following electronically on a quarterly basis employment to become employed.
ways: if the amount of North Dakota See Schedule 38-TC, line 19.
income tax withheld in the
• North Dakota Taxpayer Access previous calendar year was $1,000 Staying on top of
Point (ND TAP) at or more.
www.tax.nd.gov/tap developments
If you do not already have a ND For questions and assistance, contact Businesses or other interested
TAP account, select “Sign Up For the Office of State Tax Commissioner persons may sign up to receive
Access”. by sending an email to email notifications when a newsletter
withhold@nd.gov or by calling or other important information
• Third-party accounting 701-328-1248. is issued by the Office of State
software Tax Commissioner. There is a
A business should check its REMINDER: 2-year extension separate update list for each tax
accounting software or contact the of 2019 changes to disabled type administered by the Tax
accounting software provider to Commissioner. To sign up, go to
employment credit
see if it provides electronic filing www.tax.nd.gov and click on
of Forms W-2 and 1099 with North In 2019, the North Dakota Legislature
Dakota. expanded the income tax credit for “Subscribe” under “Email Updates” in
hiring a qualifying developmentally the lower left-hand side of the web
disabled or mentally ill individual. page.
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Form 38 Instructions 2022
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.
• Compensation, including Tax-exempt trust
General unemployment compensation, A fiduciary for a trust that is tax-
instructions received by an estate based on exempt under Internal Revenue Code
services performed in North Dakota § 501(a) must file a 2022 Form 38
Who must file by a decedent. if (1) the fiduciary is required to file
Resident estate or trust • Rental income from real and a 2021 Form 1041 or Form 990-T to
A fiduciary for a resident estate tangible personal property located report the trust’s unrelated business
or trust must file a 2022 Form 38, in North Dakota. taxable income, (2) the federal
income tax is calculated using the tax
Fiduciary Income Tax Return, if the • Royalties, bonus or lease payments,
rates applicable to a trust, and (3) the
fiduciary is required to file a 2022 and other income from an interest
unrelated business taxable income
Form 1041, U.S. Income Tax Return in oil, gas, coal, or other minerals
is reportable to North Dakota. The
for Estates and Trusts. located in North Dakota.
unrelated business taxable income is
A fiduciary for a resident estate • Gain from the sale, exchange, reportable to North Dakota if the trust
or trust is generally subject to the or other disposition of real and is a North Dakota resident trust or, in
same law provisions that apply to tangible personal property located the case of a nonresident trust, the
a resident individual. The entire in North Dakota. unrelated business taxable income has
income (loss) of a resident estate or • Income from a sole proprietorship, a source in North Dakota.
trust is reportable to North Dakota partnership, S corporation, or other
regardless of its source. An estate or trade or business carried on in Bankruptcy estate
trust is considered a resident if it has North Dakota. This includes farming A fiduciary that is required to file a
a relationship to North Dakota that is and ranching operations. 2022 Form 38 for a bankruptcy estate
sufficient to create nexus for income • Income from gambling activity must file it in a manner similar to
tax purposes. See North Dakota carried on in North Dakota. how the 2022 Form 1041 is filed. Use
Administrative Code (N.D.A.C.) Form 38 only as a transmittal form
§ 81-03-02.1-04 for more information. • Income from another estate or for Form ND-1, Individual Income
trust consisting of the same kinds Tax Return. In the top margin of
Nonresident estate or trust of income listed above. Form ND-1, write “Attachment to
A fiduciary for a nonresident estate Form 38.” Complete and attach
or trust must file a 2022 Form 38, For a nonresident estate or trust, Form ND-1 to Form 38. Complete
Fiduciary Income Tax Return, if both gross income from North Dakota Items A through H at the top of
of the following apply: sources generally does not include Form 38. Enter on Form 38, page 1,
interest, dividends, pensions, line 7, the net tax liability from
• The fiduciary is required to file a annuities, or income and gain from Form ND-1, page 2, line 25. Then
2022 Form 1041, U.S. Income Tax intangible property. However, interest, complete lines 8 through 17 on page 1
Return for Estates and Trusts. dividends, gains, and other income of Form 38 as required.
• The estate or trust derived any from intangible property are included
gross income from North Dakota in gross income from North Dakota Disaster recovery tax exemptions
sources during the 2022 tax year. sources if derived from a trade or Exemptions from state and local tax
business carried on in North Dakota.
A fiduciary for a nonresident estate filing and payment obligations are
available to out-of-state businesses
or trust is generally subject to the Grantor trust and their employees who are in
same law provisions that apply to A grantor trust is required to file a North Dakota on a temporary basis
a nonresident individual. Only the 2022 Form 38, Fiduciary Income Tax for the sole purpose of repairing
portion of the nonresident estate’s Return, if the grantor is required to or replacing natural gas, electrical,
or trust’s gross income from North file a 2022 Form 1041, U.S. Income or telecommunication transmission
Dakota sources is reportable to North Tax Return for Estates and Trusts. This property that is damaged, or under
Dakota. applies even if a grantor trust elects to threat of damage, from a state- or
use an alternative filing method under presidentially-declared disaster or
For a nonresident estate or trust, the federal income tax regulations emergency. For more information, go
gross income from North Dakota in lieu of filing a Form 1041. See to www.tax.nd.gov.
sources includes the following: the specific line instructions for
Form 38 (page 1), Schedule BI, and
Schedule K-1 for special instructions
that apply to a grantor trust.
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Electronic Filing Dakota extension. Form 101 must be remains delinquent must be paid. This
Estates or trusts with 10 or more postmarked on or before the due date penalty may not exceed 25% of the
beneficiaries are required to file the of Form 38. Notification of whether tax due.
North Dakota income tax return and the extension is accepted or rejected
In addition to any penalty, interest
pay any tax due on it by electronic will be provided by the Office of State
must be paid at the rate of 1% per
means. Tax Commissioner.
month or fraction of a month, except
for the month in which the tax was
When and Where to file Extension interest. If Form 38
due, on any tax due that remains
The 2022 Form 38 must be filed on is filed on or before the extended
unpaid after the return’s due date.
or before (1) April 15, 2023, if filing due date, and any tax due is paid
for the 2021 calendar year, or (2) the with the return, no penalty will be
15th day of the 4th month following charged. Interest on the tax due will Estimated tax requirement
the end of the tax year, if filing for be charged at the rate of 12% per (for 2023)
a fiscal year beginning in the 2022 year from the original due date of the A fiduciary for an estate or trust must
calendar year. If the due date falls return to the earlier of the date the pay estimated North Dakota income
on a Saturday, Sunday, or holiday, return is filed or the extended due tax for the 2023 tax year if all four of
the return may be filed on or before date. the following conditions apply:
the next day that is not a Saturday, 1. The fiduciary is required to
Sunday, or holiday. Prepayment of tax due. If an pay estimated federal income
extension of time to file Form 38 is tax for the 2023 tax year. This
Note: Use the 2021 Form 38 if obtained, any tax expected to be due condition applies whether or not
filing for a fiscal year beginning in may be paid on or before the regular the fiduciary actually makes the
the 2021 calendar year. due date to avoid paying extension required payment(s) of estimated
interest. For more information, tax to the Internal Revenue
If not required to file including payment options, obtain Service.
electronically, mail Form 38 and all the 2022 Form 38-EXT. Alternatively,
required attachments to: a check or money order may be 2. The North Dakota net income tax
Office of State Tax Commissioner sent with a letter containing the liability on the fiduciary’s taxable
600 East Boulevard Ave., Dept. 127 following: (1) name of estate or income for the 2022 tax year
Bismarck, ND 58505-0599 trust; (2) estate’s or trust’s FEIN; (as shown on the 2022 Form 38,
(3) fiduciary’s name, address and page 1, line 4) was equal to or
Extension of time to file phone number; and (4) statement more than $1,000. Note: If the
An extension of time to file Form 38 that the payment is a 2022 fiduciary was not required to
may be obtained in one of the Form 38-EXT payment. file a North Dakota income tax
return for the 2022 tax year, the
following ways: fiduciary’s net tax liability is zero
Penalty and interest for purposes of this condition.
• Obtain a federal extension. The tax due must be paid by the due
• Separately apply for a North date (without extension) of Form 38 3. The fiduciary expects to owe
Dakota extension. to avoid penalty and interest charges. (after subtracting any estimated
However, if an extension of time to North Dakota income tax
Federal extension. If an extension file Form 38 was obtained, the tax withholding) North Dakota
of time to file Form 1041 is obtained, due may be paid by the extended due income tax equal to or more than
it is automatically accepted as an date of the return without penalty, $1,000 for the 2023 tax year.
extension of time to file Form 38. The but extension interest will apply—see Note: Do not include income tax
extended due date for North Dakota “Extension interest” and “Prepayment withholding from nonresident
purposes is the same as the federal of tax due” on this page. individual beneficiaries or
extended due date. A separate North composite income tax in this
Dakota extension does not have to If Form 38 is filed on or before its due estimation.
be applied for, nor does the Office of date (or extended due date), but all
4. The fiduciary expects North
State Tax Commissioner have to be of the tax due is not paid by the due
Dakota income tax withholding
notified that a federal extension has date (or extended date), a penalty
(other than income tax
been obtained prior to filing Form 38. equal to 5% of the unpaid tax due or
withholding from nonresident
$5.00, whichever is greater, must be
individual beneficiaries) for the
North Dakota extension. If a paid.
2023 tax year to be less than the
federal extension is not obtained, but If Form 38 is not filed on or before smaller of:
additional time is needed to complete its due date (or extended due date), a. 90% of the North Dakota net
and file Form 38, a separate North and there is an unpaid tax due on it, a income tax liability on the
Dakota extension may be applied penalty equal to 5% of the unpaid tax fiduciary’s taxable income
for by filing Form 101, Application due or $5.00, whichever is greater, for the 2023 tax year.
for Extension of Time to File a North for the month the return was due Note: Substitute 66 2/3%
Dakota Tax Return. This is not an plus 5% of the unpaid tax due for if a qualified farmer. See
automatic extension—there must each additional month (or fraction instructions for 2023
be good cause to request a North of a month) during which the return Form 38-ES.
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b. 100% of the North Dakota net Withholding procedure. This • The beneficiary elects to be
income tax liability on fiduciary’s withholding requirement applies to the included in a composite filing. An
taxable income for the 2022 year-end distributive share of North election is indicated by the trust’s
tax year (as shown on the Dakota income, which is determined calculation and reporting of a tax
2022 Form 38, page 1, line 4). at the end of the trust’s tax year and amount for the beneficiary on
Note: If the estate or trust was reported on Form 38, Schedule BI, Form 38, Schedule BI, Column 7.
not in existence for the entire Column 5. The requirement does not If the distributive share is a loss,
2022 tax year, this part does not apply to actual distributions made the tax is zero.
apply; the 90% threshold in part during the tax year. The withholding
The distributive share of North Dakota
a must be applied. amount is calculated and reported
income included in a composite return
on Schedule BI, Column 6. If certain
In general, one-fourth (25%) of the is subject to tax even if it is under
conditions are met, an amount less
total estimated tax required to be paid $1,000.
than the amount calculated at the
for the 2023 tax year must be paid by
2.90% tax rate may be withheld. Composite filing method
April 15, June 15, and September 15,
For the qualifying conditions, see procedure. The tax under
2023, and January 15, 2024. For
Form PWA. A payment for the total the composite filing method is
more information, including payment
amount of withholding reported on calculated and reported on Form 38,
options, obtain the 2023 Form 38-ES.
Schedule BI, Column 6, must be Schedule BI, Column 7. A payment
submitted with Form 38 when it is for the total tax amount reported
Withholding from filed. on Schedule BI, Column 7, must be
nonresident beneficiary submitted with Form 38 when it is
If a trust is required to file Form 38, Composite filing filed.
the trust must withhold North Dakota A composite filing method is available
income tax at the rate of 2.90% from to a trust with one or more eligible Correcting a previously filed
the year-end distributive share of nonresident beneficiaries. Under this return
North Dakota income of a nonresident method, a trust calculates the North If a fiduciary needs to correct an
beneficiary. Dakota income tax on the year-end error on Form 38 after it is filed,
Nonresident beneficiary. For this distributive share of North Dakota the fiduciary must file an amended
purpose, a nonresident beneficiary is income of an eligible nonresident return. There is no special form for
defined as: beneficiary and pays the tax with this purpose. See “How to prepare an
Form 38. The tax is calculated at amended 2022 return” below.
• an individual domiciled outside the highest individual income tax
North Dakota, rate (which is 2.90% for the 2022 Note: If required to electronically
• a trust legally organized outside tax year), and no adjustments, file the original return, the amended
North Dakota, or deductions, or tax credits are allowed return must also be electronically
• a partnership, S corporation, or in calculating the tax. A composite filed.
other passthrough entity with a filing satisfies the North Dakota If a fiduciary paid too much tax
commercial domicile outside North income tax filing and payment because of an error on the 2022
Dakota. obligations of the eligible nonresident Form 38, the fiduciary generally
beneficiaries included in it, which has three years from the due date
A nonresident beneficiary includes means they do not have to separately (excluding extensions) of the return or
the grantor of a grantor trust if the file their own North Dakota income tax the date the return was actually filed,
grantor meets the definition of a returns. The composite filing method whichever is later, in which to file an
nonresident beneficiary. is optional and does not require prior amended return to claim a refund of
approval from the Office of State Tax the overpayment. See N.D.C.C.
Exemption from withholding. This Commissioner, and a choice to use it § 57-38-40 for other time periods that
withholding requirement does not may be made on a year-to-year basis. may apply.
apply to a nonresident beneficiary if:
Eligible nonresident beneficiary. How to prepare an amended 2022
• the beneficiary’s distributive share
A nonresident beneficiary (as defined return
of North Dakota income is less
under “Withholding from nonresident
than $1,000, 1. Obtain a blank 2022 Form 38.
beneficiary” on page 3) is eligible to
• the beneficiary elects to include be included in a composite filing if 2. Enter the name of the estate or
the distributive share of North both of the following apply: trust, and the fiduciary’s name,
Dakota income in a composite current address, FEIN, etc., in the
filing (see “Composite filing” on • The beneficiary’s only source of top portion of page 1 of Form 38.
this page), or income within North Dakota is one
3. Fill in the “Amended return” circle
or more passthrough entities. A
• the beneficiary is a passthrough at the top of page 1 of Form 38.
passthrough entity includes a trust,
entity that elects exemption from 4. Complete the Tax Computation
partnership, S corporation, limited
the withholding requirement. Schedule and Schedule BI using
liability company treated like a
Obtain Form PWE for more the corrected information.
partnership or S corporation, and
information. However, unless there is an
any other similar entity.
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increase in the amount reported Disclosure notification higher. For example, $25.36 becomes
on Schedule BI, Column 5, Upon written request from the $25.00, and $25.50 becomes $26.00.
of the amended return, enter chairman of a North Dakota legislative Fiscal year filers. The tax year for
on Schedule BI, Column 6, standing committee or Legislative North Dakota income tax purposes
the same amount reported Management, the law requires the must be the same as the tax year
on the previously filed return. Office of State Tax Commissioner to used for federal income tax purposes.
Also complete Schedule CR, if disclose the amount of any deduction Use the 2022 Form 38 if the estate’s
applicable. Then complete lines 1 or credit claimed on a tax return. Any or trust’s taxable year began in the
through 7 on page 1 of Form 38. other confidential information, such as 2022 calendar year. Note: Use the
5. Leave line 8 on page 1 of a taxpayer’s name or federal employer 2021 Form 38 if the taxable year
Form 38 blank unless claiming an identification number, may not be began in the 2021 calendar year.
additional amount not previously disclosed.
claimed.
6. On line 9 of page 1 of Form 38, Use of information Specific line
enter the total taxes due from the All of the information on Form 38 and
previously filed 2022 Form 38, its attachments is confidential by law instructions for
page 1, line 7. If the total taxes and cannot be given to others except page 1 of Form 38,
due have not been fully paid, only as provided by state law. Information
enter the amount paid. about the beneficiaries is required Items A-H
under state law so the Office of State
7. Complete lines 10 through 16 of Complete Items A through H at
Tax Commissioner can determine the
page 1 of Form 38. If there is an the top of page 1 of Form 38. Then
beneficiary’s correct North Dakota
overpayment on line 11, enter complete the Tax Computation
taxable income and verify if the
the full amount on line 13. On Schedule and Schedule BI before
beneficiary has filed a return and paid
an amended return, the amount completing lines 1 through 17 on
the tax.
credited to the next year’s page 1 of Form 38.
estimated tax (line 12) may not
Item A - Tax year
be increased or decreased. General
The same tax year used for federal
8. Attach a statement explaining the
reason(s) for filing the amended instructions for income tax purposes (as indicated on
the federal return) must be used for
return. If it is because of changes completing North Dakota income tax purposes.
the fiduciary or the Internal
Fill in the applicable circle. If the
Revenue Service (IRS) made to Form 38
estate or trust has a fiscal year, enter
the 2022 Federal Form 1041,
attach a copy of the amended Complete Form 38 as the beginning and ending dates of
federal return or IRS notice. follows: the fiscal year. Use the 2022 Form 38
only if the estate’s or trust’s tax year
9. Complete and provide a corrected 1. Complete Federal Form 1041 in began in the 2022 calendar year.
North Dakota Schedule K-1 to the its entirety.
beneficiaries, as required. 2. Complete Items A through H at Item B - Name and address
the top of page 1 of Form 38—see Enter the legal name of the estate
Reporting federal changes page 5 of these instructions. or trust, the name and title of the
If the Internal Revenue Service (IRS) 3. Complete the Tax Computation fiduciary, and the fiduciary’s mailing
changes Federal Form 1041, or if a Schedule on page 2 of Form 38— address on the applicable lines. If
fiduciary files an amended Federal see page 6 of these instructions. filing an amended return, enter the
Form 1041, an amended North Dakota most current address.
Form 38 must be filed within ninety 4. Complete Schedule BI on page 3
days after the final determination of of Form 38—see page 8 of these Item C - Federal EIN
the IRS changes or the filing of the instructions. North Dakota uses the federal
amended federal return. Enclose a 5. Complete lines 1 through 17 on employer identification number (FEIN
copy of the IRS audit report or the page 1 of Form 38—see page 10 or federal EIN) for identification
amended federal return with the of these instructions. purposes. Enter the federal employer
amended North Dakota Form 38. 6. Complete Schedule K-1, if identification number from page 1 of
required, for the beneficiaries— Federal Form 1041.
W-2/1099 reporting see page 11 of these instructions. Important: Do not enter the
requirement Rounding of numbers. Numbers fiduciary’s own federal employer
Every fiduciary that is required to may be entered on the return in identification number. A fiduciary
file Federal Form 1099 or W-2 may dollars and cents, or they may be for an estate or trust must obtain
also have to file one with the Office rounded to the nearest whole dollar. If a separate federal employer
of State Tax Commissioner. For more rounding, drop the cents if less than identification number for the estate or
information, obtain the guideline 50 cents and round up to the next trust.
Income Tax Withholding and see whole dollar amount if 50 cents or
“Annual Filing Requirements—W-2 and
1099.”
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Item D - Date created Item H - Check off items
Enter the date the estate or trust Fill in all applicable circles. Instructions for
was created from page 1 of Federal completing
Initial return. Fill in this circle if this
Form 1041.
is the first return filed in North Dakota Tax Computation
for this estate or trust.
Item E - Number of beneficiaries
Schedule
Enter the total number of beneficiaries Final return. Fill in this circle if this
(Form 38, page 2)
and the number of each type of is the last return to be filed in North
beneficiary. Dakota for this estate or trust. Grantor trust. If all of a trust is a
grantor trust, do not complete the
Item F - Residency status Composite return. Fill in this circle
Tax Computation Schedule. However,
Fill in the applicable circle to indicate only if (1) the trust has one or more
if a trust is part grantor trust and
the residency status of the estate or nonresident beneficiaries eligible to
part other type of trust (e.g., simple
trust. See “Resident estate or trust” be included in a composite filing and
or complex), complete the Tax
under “Who must file” on page 2 for (2) all of them elected to include their
Computation Schedule to the extent it
more information. distributive shares of North Dakota
applies to the nongrantor part of the
source income in a composite filing.
trust.
Item G - Entity type See “Composite filing” on page 4 for
If Federal Form 1041 was used, fill in more information.
Instructions for Part 1
the circle next to the same entity type Amended return. Fill in this circle
checked on page 1 of Form 1041. Fill if this return is being filed to correct Line 2
in the circle next to “Other” (Item 10) a previously filed 2022 Form 38. See Additions
if the fiduciary filed: “Correcting a previously filed return” The following items must be entered
• Form 1041-QFT (Write “Qualified on page 4 for more information. on this line if taxable to the fiduciary:
funeral trust” on the line.) Extension. Fill in this circle if a • Taxable portion of a lump-sum
• Form 990-T for a tax-exempt trust federal or state extension of time distribution from Federal
with unrelated business taxable to file the return was obtained. See Form 4972, line 6 plus line 10. This
income (Write “Tax-exempt trust “Extension of time to file” on page 3 adjustment does not apply to a
with UBTI” on the line.) for more information. fiduciary for a nonresident estate
or trust.
Worksheet for calculating net long-term capital gain exclusion
(for Form 38, Tax Computation Schedule, Part 1, line 4b)
1. Enter amount from 2022 Schedule D (Form 1041), line 18a, column (2).
If zero or less, stop here; no exclusion is allowed ............................................................... 1 ______________
2. Enter amount from 2022 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 2022
Schedule D (Form 1041), line 17, column (2) ................................... 4a ______________
b. North Dakota net long-term capital gain (loss) included on 2022
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 ______________
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• Loss adjustment reported to the Federal Land Banks, Federal Savings Line 4d
fiduciary by an S corporation that & Loan Insurance Corporations, and Other subtractions
elected taxation under N.D.C.C. Student Loan Marketing Association. Enter the following items on this line
§ 57-38-01.35. For details, to the extent they are included in the
Do not enter on this line interest
obtain the Income Tax Guideline: amount on line 1:
income from securities of the Federal
Adjustment For Income (Loss)
Home Loan Mortgage Corporation • Income earned or received by a
From An S Corporation electing
(Freddie Mac), Federal National Native American while living and
to be taxed as a C corporation.
Mortgage Association (Fannie working on any Indian reservation
Attach a copy of the statement
Mae), and Government National in North Dakota.
received from the entity.
Mortgage Association (Ginnie Mae), • Taxable part of a retirement, sick
• For an electing small business trust nor from a federal income tax pay, or unemployment payment
(ESBT), the net amount of the refund or repurchase agreement. from the U.S. Railroad Retirement
separate S corporation items of Attach a statement specifically Board. Attach a copy of
income, gain, loss, etc., that would identifying the securities and the Form RRB-1099 or RRB-1099-R
have been included had they not interest income from them. For (or both, if applicable).
been removed for purposes of the a mutual fund, identify the fund,
• Income adjustment reported to the
separate tax calculation on Federal the qualifying securities, and
fiduciary by an S corporation that
Form 1041. If the net amount is a the percentage of income from
elected taxation under N.D.C.C.
loss, enter as a negative number. qualifying securities.
§ 57-38-01.35. For details,
• Amount of contribution on which
obtain the Income Tax Guideline:
the fiduciary claims a North Dakota Line 4b
Adjustment For Income (Loss)
endowment fund tax credit under Net long-term capital gain
From An S Corporation electing
N.D.C.C. § 57-38-01.21, but only exclusion
to be taxed as a C corporation.
to the extent the contribution If the amount on line 1 includes a net
Attach statement received from
reduced the fiduciary’s federal long-term capital gain, 40 percent
the entity.
taxable income. If a fiduciary of the gain is excludable from
receives the credit from a North Dakota taxable income. For • Income exempted under N.D.C.C.
passthrough entity, include on a nonresident estate or trust, the Ch. 40-63 (Renaissance Zone
this line the fiduciary’s share of exclusion is allowed only for a net Act). Attach Schedule RZ. Also
the related contribution from the long-term capital gain based on the see “Property tax clearance”
passthrough entity to the extent capital gains and losses reportable to below.
it reduced the fiduciary’s federal North Dakota. A net long-term capital • Income exempted under N.D.C.C.
taxable income. gain included in an amount entered Ch. 40-57.1 (new or expanding
on line 4d (Other subtractions) is not business income exemption).
Line 4a eligible for the exclusion. Complete Attach supporting statement
Interest from U.S. obligations the worksheet on page 6 to calculate showing calculation. Also
Enter the following on this line if the amount to enter on this line. see “Property tax clearance”
included in the amount on line 1: below.
Line 4c
• Interest income from U.S. • Compensation received by a
Qualified dividend exclusion
obligations. National Guard or U.S. armed
• Interest income from other Resident estate or trust— A forces member activated for
securities that is specifically fiduciary for a resident estate or trust federal active duty service under
exempted from state income tax may enter on this line 40 percent of Title 10 of United States Code.
by federal statute. the qualified dividends allocated to Compensation received for annual
the estate or trust and reported on training, basic military training, or
• The portion of dividend income professional military education is
Form 1041, page 1, line 2b(2).
from a mutual fund attributable not eligible. Attach a copy of the
to the fund’s investment in U.S. Nonresident estate or trust. A mobilization orders.
obligations or federally-exempted fiduciary for a nonresident estate
• Compensation received by a
securities. or trust may enter on this line
nonresident individual for active
40 percent of the portion of the
Common sources of interest income duty in the U.S. armed forces.
qualified dividends allocated to the
that may be entered on this line
estate or trust and reported on Also enter on this line contributions
include U.S. savings bonds, Treasury
Form 1041, page 1, line 2b(2), that made during the tax year to a College
bills and notes, and securities issued
are reportable to North Dakota. SAVE account administered by the
by the Banks for Cooperatives,
Qualified dividends allocated to the Bank of North Dakota. The maximum
Commodity Credit Corporation,
estate or trust that are reportable deduction allowed is $5,000.
Federal Deposit Insurance
to North Dakota must be included in
Corporation, Federal Farm Credit
the fiduciary’s share of total income
System, Federal Home Loan Banks,
reported on Form 38, Tax Computation
Federal Intermediate Credit Banks,
Schedule, Part 2, Column B, line 11.
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Property tax clearance. If a company doing business in North Enter the fiduciary’s share of North
renaissance zone income exemption or Dakota, to the extent the interest Dakota source income and losses from
a new or expanding business income is apportioned or allocated to North another estate or trust.
exemption is claimed on this line, the Dakota by that entity. Do not include
fiduciary must attach the following to any interest from U.S. obligations. Line 6, Column B
Form 38: Farm income or (loss)
Line 2, Column B Enter the net income or loss from
• A statement in which the fiduciary
Ordinary dividends a farm or ranch operation doing
states whether or not the estate or
Enter the fiduciary’s share of dividend business in North Dakota as reported
trust holds a 50 percent or more
income received from a partnership, on Federal Schedule F (Form 1040),
interest in real property in North
S corporation, or limited liability to the extent the net income or loss is
Dakota. If it does, the fiduciary
company doing business in North apportionable and allocable to North
must also provide in the statement
Dakota, to the extent the dividend Dakota.
the name of each North Dakota
income is apportioned or allocated to
county in which the estate or trust
North Dakota by that entity. Line 7, Column B
holds a 50 percent or more interest
Ordinary gain or (loss)
in real property.
Line 3, Column B Enter the ordinary gain or loss from
• A copy of a property tax clearance Business income or (loss) the sale or exchange of real and
record obtained from each North Enter the net income or loss from a tangible personal property located in
Dakota county in which the estate sole proprietorship doing business in North Dakota.
or trust holds a 50% or more North Dakota as reported on Federal
interest in real property. This Schedule C (Form 1040), to the extent Line 8, Column B
may be obtained by completing the net income or loss is apportionable Other income
the form Property Tax Clearance and allocable to North Dakota. Enter the amount of any other income
Record available on the Office of having its source in North Dakota that
State Tax Commissioner’s website. Line 4, Column B is not included on lines 1 through 7 of
Capital gain (loss) Part 2.
Instructions for Part 2 Enter net capital gains and losses
from the sale or exchange of real
All estates and trusts—Enter the Instructions
and tangible personal property
amounts from the 2022 Federal
located in North Dakota. Also enter
Form 1041, page 1, lines 1 through 8, for completing
the fiduciary’s share of net capital
on the corresponding lines in
gains and losses from a partnership,
Column A. Then complete lines 9 Schedule BI
S corporation, or limited liability
through 11 in Column A. (Form 38, page 3)
company doing business in North
Dakota, to the extent they are Schedule BI must be completed
Nonresident estate or trust to provide information about each
apportioned or allocated to North
only— Enter in Column B (North beneficiary. If the estate or trust has
Dakota by that entity.
Dakota) the portion of the amount in more than four beneficiaries, complete
Column A that is reportable to North and attach additional Schedule BI
Line 5, Column B
Dakota. See below for the instructions forms. If more than one Schedule BI
Rents, royalties, partnerships,
to lines 1 through 8 of Column B. is needed, complete lines 1 through
other estates and trusts, etc.
Then complete lines 9 through 11 in 4 on only one of them, and include
Enter the net income or loss from
Column B. Complete lines 1 through the combined amount for all of the
real and tangible personal property
11 in Column C by entering the schedules on that one schedule.
located in North Dakota. This includes
difference between Column A and Note: Only the North Dakota
net income or loss from leasing the
Column B. prescribed Schedule BI will be
property, and royalties and other
income from interests in oil, coal, accepted. Taxpayer prepared
Instructions for Column B only— substitutes are not acceptable.
or other mineral property located in
North Dakota
North Dakota.
If part or all of a North Dakota income Grantor trust. For purposes of
amount reportable in Column B was Enter the fiduciary’s share of
entered in Part 1, line 4a and line 4d income or loss from a partnership, completing Schedule BI, “beneficiary”
because it is exempt from North S corporation, or limited liability includes the owner(s) of a grantor
Dakota income tax, only enter the company doing business in North trust.
taxable portion in Column B. Dakota (that is not reported on the
other lines of Part 2), to the extent All Beneficiaries
Line 1, Column B the income is apportioned and (Columns 1 through 4)
Interest income allocated to North Dakota by that
Enter the fiduciary’s share of entity. Columns 1 and 2
interest received from a partnership, Enter the name, mailing address, and
S corporation, or limited liability federal identification number of each
beneficiary.
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Column 3 Box 14 Other information (Only • Gain or loss from the sale,
Identify the entity type of the include income and exchange, or other disposition of
beneficiary by entering the applicable deduction items includable real and tangible personal property
code letter as follows: in the calculation of federal located in North Dakota.
adjusted gross income.)
Entity type Code letter • Net income (loss) from a sole
proprietorship doing business in
Individual ..................... I Grantor trust owner. For a grantor North Dakota.
C corporation ................ C trust owner (who does not receive a
• Net income (loss) from a
S corporation ................ S federal Schedule K-1), enter the sum
partnership, S corporation, or
Partnership ...................P of the income and deduction items
other trade or business carried on
Estate .......................... E reportable for federal income tax
in North Dakota, to the extent it is
Trust ............................ T purposes that are attributable to the
apportioned and allocated to North
Exempt organization ...... O owner.
Dakota.
Note: A “C corporation” is a
corporation that files Federal Nonresident beneficiaries • Income from gambling activity
carried on in North Dakota.
Form 1120; an “S corporation” only (Columns 5 through 7)
is a corporation that files Federal • Income, gain, or loss from sources
Columns 5 through 7 only apply to
Form 1120S; and the “Trust” entity in North Dakota received from
a nonresident beneficiary. For this
type only applies to a trust that another estate or trust.
purpose, a nonresident beneficiary is
files Federal Form 1041 or, in lieu of For a nonresident beneficiary,
defined as:
filing Federal Form 1041, elects an income from North Dakota sources
alternative reporting method under • an individual domiciled outside generally does not include interest,
the federal income tax regulations. North Dakota, dividends, pensions, annuities, or
If the beneficiary is a limited liability • a trust legally organized outside income and gain from intangible
company (LLC) that is a disregarded North Dakota, or property. However, if any of these
entity for federal income tax purposes • a partnership, S corporation, or income items were derived from a
or a nominee on Federal Schedule K-1, other passthrough entity with a partnership, S corporation, or limited
enter the code letter for the type of commercial domicile outside North liability company doing business in
entity of the entity’s owner. If the Dakota. North Dakota, they must be included
LLC is treated like a C corporation, in Column 5 to the extent they are
partnership, or S corporation, enter A nonresident beneficiary includes apportioned or allocated to North
the code letter for that particular the grantor of a grantor trust if the Dakota by that entity.
entity type. grantor meets the definition of a
nonresident beneficiary. Column 6
Column 4 Nonresident beneficiary only
Enter the sum of the following Column 5 If a nonresident beneficiary’s
items from the beneficiary’s Federal Nonresident beneficiary only distributive share of North Dakota
Schedule K-1 (Form 1041), Part III: Complete Column 5 for each income in Column 5 is $1,000
nonresident beneficiary. Include or more, multiply the amount in
Box 1 Interest income in this column the portion of each Column 5 by 2.90% (.029) and enter
Box 2a Ordinary dividends item of income, loss, and deduction the result in Column 6. However, the
included in the amount in Column 4
Box 3 Net short-term capital gain following exceptions apply:
that is derived from sources in North
Box 4a Net long-term capital gain Dakota. For this purpose, this includes • If the nonresident beneficiary
Box 5 Other portfolio and the same kinds of items that would provides the fiduciary with a
nonbusiness income be reportable to North Dakota had completed Form PWA, enter the
Box 6 Ordinary business income they been directly received by the amount from line 6 of Form PWA
nonresident beneficiary. These items in Column 6 and fill in the circle
Box 7 Net rental real estate income under “Form PWA or Form PWE.”
include:
Box 8 Other rental income • If the nonresident beneficiary
• Compensation for services
Box 9 Directly apportioned provides the fiduciary with a
performed in North Dakota.
deductions completed Form PWE, leave
• Net income (loss) from the rental Column 6 blank and fill in the circle
Box 11 Final year deductions (Only
or lease of real and tangible under “Form PWA or Form PWE.”
include deductions that are
personal property located in North
allowed as a deduction from • If the nonresident beneficiary
Dakota.
gross income in calculating elected to be included in a
adjusted gross income • Net income (loss) attributable to composite filing, leave Column 6
for federal income tax royalties and other income from blank and see the instructions to
purposes.) oil, coal, or other mineral interests Column 7.
located in North Dakota.
See “Withholding from nonresident
beneficiary” on page 3 for more
information.
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10
Column 7 Payment of income tax to more that is also taxed to the fiduciary in
Nonresident beneficiary only than one other state—If the North Dakota. See the instructions to
Note: Leave Column 7 blank if fiduciary pays income tax to more Schedule CR on this page. Attach a
Column 6 was completed for the than one other state for the tax copy of the income tax return filed
nonresident beneficiary. year, a separate Schedule CR must with the other state and/or local
be completed for each state. If the jurisdiction.
Complete Column 7 for each fiduciary also paid income tax to a
nonresident beneficiary electing to local jurisdiction in another state, Line 3
be included in a composite filing. include the income tax paid to the Other credits
Multiply the amount in Column 5 by local jurisdiction on the Schedule CR For other credits that may apply, see
2.90% (.029) and enter the result in filed for the state in which the local Schedule 38-TC and its instructions.
Column 7. If the amount in Column 5 jurisdiction is located. Fill in the total Enter on this line the total credits
is zero or less, enter zero in Column 7. of the separately calculated credit retained by the estate or trust from
See “Composite filing” on page 4 for amounts on Form 38, page 1, line 2. Schedule 38-TC, line 21a. Do not
more information. include on this line any credit(s)
Line 2 allocated to the beneficiaries. Attach
Enter only those items of income, Schedule 38-TC.
Instructions gain, loss, and adjustments to income
for completing (included in the fiduciary’s share of Line 8
total income on line 1) that have their Income tax withholding
Schedule CR source in the other state. Generally Enter the North Dakota income
(Form 38, page 3) they have their source in the other tax withholding shown on a 2022
state if they are taxable or deductible Form W-2, Form 1099, or North
A credit is allowed to a resident estate
under the other state’s tax laws. Dakota Schedule K-1. Also enter North
or trust for income tax paid to another
Disregard any adjustment to the Dakota income tax withholding shown
state or local jurisdiction on income
fiduciary’s total federal income allowed on a 2021 North Dakota Schedule K-1
that is also taxable by North Dakota.
or required by the other state’s tax if the tax year of the partnership,
A “state” means any of the other laws. S corporation, estate, or trust shown
49 U.S. states, the District of on the Schedule K-1 is a fiscal year
Columbia, and a U.S. territory. A “local Line 6 ending in your 2022 tax year. Be sure
jurisdiction” means a city, township, Enter the amount of the income tax the state identified on the Form W-2
county, etc., within a state. less any income tax credits (except or Form 1099 is North Dakota. Do
withholding and estimated tax) shown not enter on this line North Dakota
Qualifying taxes—The credit on the other state’s income tax return. extraction or production taxes
is allowed for income taxes paid If the fiduciary also paid income tax to withheld from mineral interest income,
to another state and any local a local jurisdiction in the other state, such as an oil or gas royalty, because
jurisdictions in that state. This include the income tax shown on the they are not income taxes. Attach a
includes an estate’s or trust’s share local jurisdiction’s income tax return copy of the Form W-2, Form 1099,
of income tax paid on a composite (or, if applicable, the other state’s or North Dakota Schedule K-1.
return filed by a partnership or other return).
passthrough entity in which the Line 9
estate or trust owns an interest. The Estimated tax payment
credit is not allowed for income tax Specific line Enter North Dakota estimated income
paid to a foreign country or its local tax paid on 2022 Forms 38-ES and
jurisdictions, nor is it allowed for any instructions for
Form 38-EXT. Also enter the amount
tax that is not an income tax (e.g., of an overpayment from the 2021
page 1 of Form 38,
property or sales taxes). Form 38 that was applied as an
Other state’s return—The credit lines 1-17 estimated tax payment for the 2022
is allowed only if the fiduciary files Complete the Tax Computation tax year.
an income tax return with the other Schedule and Schedule BI before
state or local jurisdiction. The credit completing lines 1 through 17 on Line 12
is not allowed for income tax withheld page 1 of Form 38. Application of overpayment to
or estimated income tax paid to the 2023
other state. A copy of the income Line 2 If there is an overpayment on line 11,
tax return filed with the other Credit for income tax paid to part or all of it may be applied as an
state and/or local jurisdiction another state or local jurisdiction estimated payment toward the 2023
must be attached to Form 38. A fiduciary for a resident estate or tax liability. Enter on this line the
trust may be eligible for a credit amount to be applied. The amount
if the fiduciary pays income tax to applied may not be changed after the
another U.S. state, the District of return is filed. If this is an amended
Columbia, a U.S. territory, or any of return, do not make an entry on this
their local jurisdictions, on income line.
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11
Line 14 routing number. A check drawn on a Amended schedule. If a fiduciary
Tax due foreign bank (except one in Canada) files an amended Form 38, the
A tax due must be paid in full with cannot be accepted. fiduciary must issue amended North
the return when it is filed. See the Dakota Schedule K-1 forms to its
instructions to line 16 for payment Line 17 beneficiaries. Fill in the “Amended”
options. A late payment of tax may Interest on underpaid estimated circle at the top of the North Dakota
be subject to penalty and interest tax Schedule K-1.
charges—see “Penalty and interest” on If the fiduciary for an estate or trust
Final schedule. Fill in the “Final”
page 3. was required to pay estimated North
circle at the top of the North Dakota
Dakota income tax for 2022, but the
Schedule K-1 if it is the last one that
Line 15 fiduciary did not pay enough or paid
the fiduciary is required to issue to a
Penalty and interest it late, interest is charged on the
beneficiary.
The Office of State Tax Commissioner underpayment or late payment. To
will notify the fiduciary of any penalty determine if interest is owed, obtain
and interest owed for late filing or late and complete Schedule 38-UT. Part 2
payment, or interest owed on tax due Beneficiary information
during an extension period. However,
if desired, the fiduciary may calculate Instructions Item F
these amounts and enter them on Enter the same code letter shown in
for completing
this line, and submit payment for Column 3 of Schedule BI of Form 38
them with the return. See “Penalty Schedule K-1 for the beneficiary.
and interest” on page 3 for how to
calculate these amounts. North Dakota Schedule K-1 (Form 38)
Item G
must be used to provide beneficiaries
If the beneficiary is an individual,
Line 16 with information they will need to
estate, or trust, fill in the applicable
Balance due complete a North Dakota income tax
circle to indicate the legal residency
The balance due must be paid in full return. The information to be included
status of the beneficiary for North
with the return. The payment may in the schedule will depend on the
Dakota income tax purposes. If an
be made electronically in one of the type of beneficiary.
individual beneficiary changed his or
following ways. For purposes of completing her legal residency to or from North
• Online—A payment may be made Schedule K-1 (Form 38), a beneficiary Dakota during the tax year, check
online with an electronic check or a includes an owner of a grantor trust. the part-year resident status. In the
case of an estate or trust beneficiary,
debit or credit card. The electronic North Dakota Schedule K-1 (Form 38) only the full-year resident or full-year
check option is free. North Dakota must be completed and given to: nonresident status will apply.
contracts with a national payment
service to provide the debit or • each beneficiary to whom the
credit card option. There is a fee fiduciary distributes a share of a Item H
for the debit or credit option, none North Dakota adjustment or tax For a nonresident beneficiary, fill
of which goes to the State of North credit (which is reportable in Part 3 in the applicable circle to indicate
Dakota. To pay online, go to of North Dakota Schedule K-1), or whether the beneficiary elected to be
www.tax.nd.gov/payment. • each nonresident individual, included in a composite filing by the
• Electronic funds transfer—A estate, or trust beneficiary for fiduciary.
payment may be made by means which the fiduciary is required to
of an Automated Clearing House report an amount on Schedule BI, Part 3
(ACH) credit transaction that Column 5. All beneficiaries—
the taxpayer initiates through A North Dakota Schedule K-1 North Dakota adjustments
its banking institution. For more does not have to be provided to a and tax credits
information, go to our website at partnership, corporation, or North Complete this part for a beneficiary
www.tax.nd.gov. Dakota resident individual, estate, or only if the income, deduction, or tax
If paying with a paper check or money trust beneficiary if there are no North credit is allocated to the beneficiary.
order, complete a 2022 Form 38-PV Dakota adjustments or tax credits
payment voucher and enclose it with distributable to the beneficiary. Line 1
Federally-exempt income from
the payment. Make the check or In addition to the North Dakota non-North Dakota bonds and
money order payable to “ND State Schedule K-1, the fiduciary must securities
Tax Commissioner,” and write the last provide the beneficiary with a copy of If the beneficiary is an individual,
four digits of the federal employer the Beneficiary’s Instructions to North estate, or trust, do not make an entry
identification number and “2022 Dakota Schedule K-1 (Form 38). on this line.
Form 38” on the check or money
order. A check must be drawn on a A copy of all North Dakota
U.S. or Canadian bank, be in U.S. Schedule K-1 forms must be enclosed
dollars, and use a standard 9-digit with Form 38 along with any required
supplemental statements.
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12
For all other beneficiaries, enter Line 6 Line 33
the beneficiary’s share of interest College SAVE deduction ND distributive share of income
and dividend income from bonds Enter the portion of a College SAVE (loss)
and securities that is exempt from deduction allocated to the beneficiary. Enter the nonresident beneficiary’s
federal income tax. Do not include North Dakota distributive share
income from bonds and securities of Lines 7 through 21 of income (loss) from Form 38,
North Dakota and any of its political Tax credits Schedule BI, Column 5.
subdivisions. If the estate or trust qualified for a
North Dakota income tax credit (see Line 34
Line 2 instructions to Form 38, page 1, ND income tax withheld
State and local income taxes line 3), and part or all of the credit Enter the amount of North Dakota
If the beneficiary is an individual, was allocated to its beneficiaries, income tax withheld from the
estate, or trust, do not make an entry enter the beneficiary’s share of the nonresident beneficiary’s North
on this line. credit on the applicable line. Dakota distributive share of income
from Form 38, Schedule BI, Column 6.
For all other beneficiaries, enter the Line 14a. Enter on this line the
portion of any state or local income beneficiary’s share of an endowment
Line 35
taxes deducted in calculating ordinary fund tax credit from Schedule 38-TC,
ND composite income tax
income (loss) that was allocated to line 12a.
Enter the amount of North Dakota
the beneficiary.
Line 14b. Enter on this line the composite income tax on the
beneficiary’s share of a contribution nonresident beneficiary’s North
Line 3
amount from Schedule 38-TC, Dakota distributive share of income
Interest from U.S. obligations
line 12b. from Form 38, Schedule BI, Column 7.
Enter the portion of any interest
from U.S. obligations allocated to the Line 14c. Enter on this line the
beneficiary. Include interest income beneficiary’s share of an endowment Before you file
from other securities if the interest fund tax credit (ND Schedule K-1)
is specifically exempted from state from Schedule 38-TC, line 12c. Form 38
income tax by federal statute. Also
include the portion of dividend income Line 14d. Enter on this line the Signatures
from a mutual fund attributable to the beneficiary’s share of a contribution The return must be signed and dated
fund’s investment in the same kinds of amount (ND Schedule K-1) from by the fiduciary, or an authorized
securities. Schedule 38-TC, line 12d. representative of the fiduciary.
If the fiduciary pays someone (other
Line 4 Part 4
than an employee) to prepare the
Renaissance zone income Nonresident individual, return, the paid preparer also must
exemption estate, or trust beneficiary sign and date the return.
If the estate or trust qualified for only—North Dakota income
the renaissance zone business or Preparer authorization check-off
investment income exemption (see (loss)
A fiduciary may authorize the
instructions to the Tax Computation Complete Part 4 for a nonresident North Dakota Office of State Tax
Schedule, Part 1, line 4d), enter the individual, estate, or trust beneficiary. Commissioner (Tax Department) to
portion of the exemption amount Enter on the corresponding line of discuss matters pertaining to the 2022
allocated to the beneficiary. This Part 4, lines 22 through 32, each Form 38 with the preparer who signed
applies only if the income qualifying item of North Dakota income, gain, it by filling in the circle to the right of
for the exemption is allocated to the loss, deduction, etc., included in the signature area.
beneficiary. the amount reported on Form 38,
Schedule BI, Column 5. This allows the Tax Department to
Line 5 contact the preparer if any questions
New or expanding business Part 5 arise during the processing of the
income exemption Nonresident beneficiary only return. It also allows the preparer
If the estate or trust qualified for the Complete Part 5 for all nonresident to respond to the questions and to
new or expanding business income beneficiaries for which an amount was provide any information missing
exemption (see instructions to the required to be entered on Form 38, from the return, to contact the Tax
Tax Computation Schedule, Part 1, Schedule BI, Column 5. Department to inquire about the
line 4d), enter on this line the portion status of the return’s processing and
of the exemption amount allocated to related refund or payment, and to
the beneficiary. This applies only if the respond to Tax Department notices
income qualifying for the exemption is that the fiduciary shares with the
allocated to the beneficiary. preparer pertaining to math errors or
return preparation. (Tax Department
notices will be sent only to the
fiduciary.)
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This authorization applies only to the Assembling a paper return A balance due may be paid
individual whose signature and printed Please assemble Form 38 and its electronically (see page 10 of these
name appears in the paid preparer required attachments in the following instructions). If paying with a paper
section of the signature area. It does order: check, enclose the check and a
not apply to the firm, if any, shown Form 38-PV payment voucher with the
1. Form 38.
in that section. It only applies to the return.
2022 return and automatically expires 2. Tax Computation Schedule
on the due date (including extensions) 3. Schedule BI.
for filing the 2023 Form 38. 4. Schedule 38-TC
This authorization does not authorize 5. All other required North Dakota
the preparer to receive a refund schedules and forms (except
check, bind the fiduciary in any way North Dakota Schedule K-1
(including any additional tax liability), forms).
or represent the fiduciary before 6. North Dakota Schedule K-1
the Tax Department for any other forms.
purpose.
7. Required supporting statements.
8. Complete copy of Form 1041,
including Federal Schedule K-1
forms.
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