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Form D-403A

             North Carolina Partnership Income

             Tax Return Instructions

                                                eFile

           3 Make filing taxes easier – choose eFile
           3 More convenient and faster than filing paper
           3 Pay tax due by bank draft with no convenience fee
           3  Schedule quarterly tax payments up to a year out

             Visit the Department’s website to get started.

             Declaración Electrónica (EN ESPAÑOL)

             www.ncdor.gov

                                                                                           20232023
                                                Tax Assistance

Information about partnership income tax and tax forms may be obtained from our website at www.ncdor.gov. You may also call the 
North Carolina Department of Revenue Customer Service line at 1-877-252-3052 (toll-free) for additional assistance in completing 
the partnership’s tax forms or to request forms.

NORTH CAROLINA DEPARTMENT OF REVENUE, P.O. BOX 25000, RALEIGH, NC 27640-0100

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What’s New for 2023?

• Certain Partnerships are Eligible to Make the Election to Pay Tax at the Entity-Level
North Carolina law was amended to include provisions that allow additional partnerships to elect to pay North Carolina income
tax at the entity-level (a “Taxed Partnership”). Important: A Taxed Partnership cannot pay entity-level tax for a partner classified
as a corporation or a partnership. (For more information, see Directive TA-23-1 and page 3 of these instructions.)
• Amending the Taxed Partnership Election After a Return is Filed
North Carolina law was amended to include a provision that prevents a partnership from making or revoking the Taxed
Partnership election after the partnership income tax return is filed.
• North Carolina Taxable Income
North Carolina law was amended to provide that the North Carolina taxable income for a Taxed Partnership is determined
only on income attributable to North Carolina. As such, income not sourced to North Carolina should not be included in the
computation.
• Deduction Allowed on a Resident Partner’s Tax Return for Certain Non-North Carolina Sourced Partnership Income
North Carolina law was amended to include a provision that allows a resident partner to claim a deduction on the resident
partner’s individual income tax return for the partner’s distributive share of the partnership’s income not attributable to North
Carolina that was taxed at the entity-level in another state or the District of Columbia. (For more information, see instructions
for Form D-400 Schedule S, Line 38 on page 19 of 2023 Form D-401, North Carolina Individual Income Tax Instructions.)
• Taxed Partnerships Cannot Claim a Tax Credit for Income Taxes Paid to Another State or Country
North Carolina law was amended to remove a provision that allowed a Taxed Partnership to claim a tax credit for income
taxes paid to another state or country.
• North Carolina Tax Rate
North Carolina law was amended to decrease the individual income tax rate to 4.75% for tax year 2023. Partnerships are
subject to the same income tax rate as individuals.
• Other 2023 Legislation Changes
For more information on other legislative changes that affect tax year 2023, see the “2023 Tax Law Changes” publication
available on the Department’s website.

Before You Begin
Read the instructions carefully before you begin preparing the partnership’s income tax return. Make sure that you complete and attach
the proper tax schedules to the partnership’s tax return. Incomplete or inaccurate information may result in the Department returning the
tax return to you, thereby delaying the processing of the tax return and any refund due thereon.
Important: You must enter the partnership’s entire nine-digit Federal Employer Identification Number (“FEIN”) in the appropriate boxes
on the forms. An incorrect or missing FEIN can increase the partnership’s tax, reduce the partnership’s refund, or delay the partnership’s
refund.

Be sure to enter the partnership’s complete address on the tax return.
Make sure you have received all of the 1099s, K-1s, and other tax documents that you need to prepare the tax return.
Do not submit photocopies of the return. Submit original forms only. Do not use any prior year forms.
Use black or blue ink only. Do not use red ink or pencil.
Write your numbers clearly inside the boxes like this:
Do not use dollar signs ($), commas, decimal points, or other punctuation marks like this:
Do not use brackets to indicate negative numbers. Negative numbers are indicated by either:
- Filling in the circle next to the number like this (Web version):
- Entering a minus sign in the appropriate space like this (Web-fill version):

If the partnership does not have an entry for a particular line, leave it blank. Do not enter dashes, zeros, draw lines, or other symbols
in boxes that the partnership has no entry for that line.
Round off to the nearest whole dollar. Drop amounts under 50 cents and increase amounts from 50 cents to 99 cents to the next
whole dollar.
Use capital letters.
Print letters and numbers like this: A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

0 1 2 3 4 5 6 7 8 9

Fill in applicable circles completely. Example: Yes No

Each year the Department makes available (and approves) several different versions of North Carolina tax forms and schedules. Do
not mix the different versions. If you submit different versions for the same tax year, the Department cannot process the tax return.

Example: Do not submit a software generated Form D-403 with a web-fill Form D-403TC. Instead, submit a software generated Form
D-403 and a software generated Form D-403TC, or a web-fill Form D-403 and a web-fill Form D-403TC.

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                       General Information

The information contained in this booklet is to be used as a guide in the preparation of the 2023 North Carolina partnership income tax 
return and is not intended to cover all provisions of the law. For further information on North Carolina tax law, refer to the administrative 
rules, bulletins, directives, or other publications issued by the Department of Revenue.

Important: The references to line numbers on federal return of partnership income were correct at the time this booklet was published. If 
line numbers have changed since publication and you are unable to determine the proper line to use when completing the partnership’s 
North Carolina tax return, contact the Department of Revenue at 1-877-252-3052.

                      A partnership doing business in North Carolina that is required to file a federal return of 
Who Must File a North partnership income must file a North Carolina partnership income tax return, Form D-403, 
                      for the taxable year.  The term “partnership” includes a limited liability company classified for 
Carolina Partnership 
                      federal income tax purposes as a partnership as well as certain publicly traded partnerships 
Income Tax Return?    described in section 7704(c) of the Internal Revenue Code.

                      The term “doing business in North Carolina” means the operation of any business enterprise 
What Does “Doing      or activity in North Carolina for economic gain, including, but not limited to, the following:
Business in North 
                      •  The maintenance of an office or other place of business in North Carolina;
Carolina” Mean?       •  The maintenance in North Carolina of an inventory of merchandise or material for sale, 
                       distribution or manufacture, regardless of whether kept on the premises of the taxpayer 
                       or in a public or rented warehouse;
                      •  The selling or distributing of merchandise to customers in North Carolina directly from a 
                       company-owned or operated vehicle when title to the merchandise is transferred from 
                       the seller or distributor to the customer at the time of the sale or distribution;
                      •  The rendering of a service to clients or customers in North Carolina by agents or employees 
                       of a foreign partnership;
                      •  The owning, renting, or operating of business or income-producing property in North 
                       Carolina including, but not limited to, the following:

                       (A)  Realty;
                       (B)  Tangible personal property;
                       (C)  Trademarks, tradenames, franchise rights, computer programs, copyrights, patented 
                       processes, licenses.

                      In addition, a partnership that is a partner in another partnership or joint venture operating 
                      in North Carolina is considered to be “doing business in North Carolina.”  Exception:         A 
                      partnership whose only activity is as an investment partnership is not considered to be 
                      “doing business in North Carolina” and is not required to file a return in North Carolina or 
                      pay income tax to the State on behalf of its nonresident partners. (For more information on 
                      investment partnerships, see  North Carolina Administrative Code 17 NCAC 06B .3503.)

                      For tax years beginning on or after January 1, 2022, an eligible partnership that is required to 
Can a Partnership     file a partnership income tax return can elect to pay North Carolina income tax at the entity-
                      level (a “Taxed Partnership”).  An eligible partnership is defined as a domestic partnership, 
Elect to Pay Income 
                      a foreign partnership, or a  limited liability company (“LLC”) classified for federal income 
Tax  at  the  Entity- tax purposes as a partnership. Important:  The following partnerships are not eligible to 
                      make the election to be a Taxed Partnership:
Level?                 
                      •   A publicly traded partnership that is described in section 7704(c) of the Internal Revenue 
                       Code (“Code”). 
                      •   A partnership that has at any time during the taxable year a partner who is not one of the 
                       following: 

                       (1)  An individual. 
                       (2)  An estate.
                       (3)  Any of the following: 
                               a.  A trust described in section 1361(c)(2) of the Code. 
                              b.  A trust if such trust does not have as a beneficiary any person other than an

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                              individual, an estate, a trust, or an organization described in section 1361(c)(6) of 
                              the Code. 
                       (4)  An organization described in section 1361(c)(6) of the Code. 
                       (5)  A partnership, including an entity classified as a partnership for federal income tax 
                       purposes, or an entity classified as a corporation for federal income tax purposes.

                       Important: A Taxed Partnership cannot pay tax at the entity-level for a partner classified 
                       as a corporation or a partnership. As such, the distributive share of the partner’s income 
                       (loss) cannot be included when calculating the Taxed Partnership’s North Carolina taxable 
                       income on which the Taxed Partnership pays entity-level tax.

                       An eligible partnership can make the election to be a Taxed Partnership by filling in the 
How Can a Partnership  appropriate circle on page 1 of Form D-403. The election is for the tax year covered by 
                       the partnership income tax return.   Important: The election must be made by the eligible 
Make an Election to be 
                       partnership by the due date of the partnership income tax return, including extensions. 
a Taxed Partnership?   In addition, an eligible partnership cannot make the Taxed Partnership election after the 
                       partnership income tax return is filed. 

                       Generally, a partnership that is required to file a partnership income tax return with one or 
Does a Partnership     more nonresident partners must compute and pay the tax due on behalf of each nonresident 
                       partner.  If the nonresident  partner is  a corporation, partnership, trust, or estate, the 
Have a Requirement 
                       partnership is not required to pay the tax on that partner’s share of the partnership income 
to Pay North Carolina  provided the partnership files a completed Form NC-NPA, Nonresident Partner Affirmation, 
                       by the due date of the partnership income tax return. Important: If an eligible partnership 
Income Tax on Behalf   makes the election to be a Taxed Partnership, this guidance also applies to any partner 
                       classified as a corporation or a partnership. (For more information, see Directive TA-23-1.)
of a Nonresident 
                       Form NC-NPA. A properly completed Form NC-NPA affirms that the nonresident partner is 
Partner?               not subject to North Carolina income tax or that the nonresident partner will timely file the 
                       appropriate North Carolina tax return and pay any tax due. Form NC-NPA must be attached 
                       to the partnership income tax return when it is originally filed and must be signed by the 
                       partner. An unsigned form is not valid.

                       A new Form NC-NPA must be completed annually by the nonresident partner and filed by the 
                       partnership on or before the due date of the partnership income tax return. Form NC-NPA 
                       applies to the original tax return, any amended tax return for that year, and any proposed 
                       assessments of additional tax for that year. 

                       A nonresident individual partner is not required to file a North Carolina income tax return 
Is  a Nonresident      when the only income from North Carolina sources is the nonresident’s share of income from 
                       a partnership doing business in North Carolina, and the partnership pays the full amount 
Partner Required 
                       of tax shown due for the nonresident individual partner on the partnership’s income tax 
to  File  a  North     return. This guidance also applies to nonresident individual partners of a Taxed Partnership. 

Carolina Income        Important: This  guidance  does  not  apply  to  a  partner  classified  as  a  corporation,  a 
                       partnership, an estate, or a trust. 
Tax Return?

                       •  If the partnership did not make the election to be a Taxed Partnership, the partnership 
On the  Partner’s      must pay North Carolina income tax on behalf of a nonresident partner if the partner does 
North Carolina         not provide the partnership with a completed Form NC-NPA. The nonresident partner is 
                       allowed to claim the partner’s share of net tax paid to North Carolina by the partnership. 
Tax Return, can a      Reminder: The partnership must report the nonresident partner’s share of net tax paid 
                       to North Carolina on Line 9 of Form NC K-1, Partner’s Share of North Carolina Income, 
Partner Claim their    Adjustments, and Credits. (See Form NC K-1 available on the Department’s website.)
Distributive Share 
                       •  If the partnership makes the election to be a Taxed Partnership, the Taxed Partnership 
of  North Carolina     must pay North Carolina income tax at the entity-level on the aggregate amount of income 
                       attributable to North Carolina for all partners except partners classified as corporations or 
Income Tax Paid by     partnerships. The partner not classified as a corporation or a partnership is NOT allowed to 
                       claim the partner’s share of entity-level tax paid to North Carolina by the Taxed Partnership. 
the Partnership?

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                        Reminder: The partnership must NOT report the partner’s share of entity-level tax paid 
                        to North Carolina on Line 9 of Form NC K-1. 

                        Note: A Taxed Partnership must pay North Carolina income tax on behalf of a nonresident 
                        partner classified as a corporation or a partnership if the partner does not provide the 
                        partnership with a completed Form NC-NPA. The nonresident partner is allowed to claim 
                        the partner’s share of net tax paid to North Carolina by the partnership. Reminder:  The 
                        partnership must report the nonresident partner’s share of net tax paid to North Carolina 
                        on Line 9 of Form NC K-1.

                       A partnership that does not make the election to be a Taxed Partnership is not required to 
Is a Partnership       pay estimated income tax. Important: A partnership that makes the election to be a Taxed 
                       Partnership is generally required to make estimated income tax payments if the Taxed 
Required to 
                       Partnership expects to have a North Carolina income tax liability of $500 or more.   (For 
Pay  Estimated         more information, see the Department’s Important Notice dated April 14, 2022, and Form 
                       NC-40 PTE available on the Department’s website.)
Income Tax?

                       A resident individual partner may deduct the amount of the partner’s share of income NOT 
Can a Partner Take     attributable to North Carolina if a partnership pays the tax on the income at the entity-level 
                       in another state or the District of Columbia. Note: Because this deduction is based on 
a Deduction on the 
                       income NOT attributable to North Carolina, the partnership will NOT provide the partner with 
Partner ’s North       the amount of the deduction on Form NC K-1.  However, the partnership must provide the 
                       partner with written documentation of the amount of the deduction.  (For more information, 
Carolina Tax Return if see instructions for Form D-400 Schedule S, Line 38 on page 19 of 2023 Form D-401, North 
                       Carolina Individual Income Tax Instructions.)
the Partnership Pays 
Entity-Level Tax to 
Another State?

                       All tax credits available to individuals are available to partnerships with the exception of the 
What Tax Credits       tax credit for income taxes paid to other states.  (For more information on tax credits, see 
                       page 14 of these instructions.)
are Available  to 
Partnerships?

                       Interest. If a partnership does not pay the total amount of North Carolina income tax owed, 
Will a Partnership     the Department is required to charge interest on any unpaid tax. Interest is computed at the 
                       applicable rate from the original due date of the return to the date of payment, regardless of 
Owe Interest?
                       whether the partnership has been granted an extension. To obtain the current interest rate, 
                       visit the Department’s website.

                       If the partnership pays North Carolina income tax after the original due date of the return, 
                       compute the amount of interest due and include the interest on Form D-403, Part 1, Line 21b.

                       Interest on the Underpayment of Estimated Income Tax.           A partnership that makes 
                       the election to be a Taxed Partnership may be subject to interest on the underpayment of 
                       estimated income tax if the Taxed Partnership does not pay enough estimated income tax or 
                       the estimated income tax is paid late. The interest may apply even if the Taxed Partnership 
                       does not owe additional income tax or is due a refund. To determine if the Taxed Partnership 
                       owes interest on the underpayment of estimated income tax, complete Form NC-429B PTE, 
                       Underpayment of Estimated Tax by Taxed Pass-Through Entities, which is available on the 
                       Department’s website.

                       Failure to File Penalty. A partnership income tax return filed after the original or extended 
Will a Partnership     due date (whichever is later) is subject to a penalty for failure to file a return on the date it 
Owe Penalties?         is due.  The penalty is calculated at a rate of five percent (5%) of the net tax due for each 
                       month, or part of a month, the return is late (maximum twenty-five percent (25%)). When

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                      applicable, include this penalty on Form D-403, Line 21a.

                      Failure to Pay Penalty. A partnership income tax return filed after the original due date with a 
                      balance due is subject to a penalty for failure to pay tax when due.  The penalty is calculated 
                      at a rate of five percent (5%) of the net tax due, regardless of how late the tax is paid.

                      Generally, the failure to pay penalty applies to any tax not paid by the original due date. 
                      However, if the partnership was granted an extension to file its partnership income tax return 
                      and the partnership paid at least ninety percent (90%) of the tax due by the original due 
                      date, the penalty will not be automatically assessed. If the 90% rule is met, any remaining 
                      balance due, including interest, must be paid with the tax return on or before the extended 
                      due date to avoid the late payment penalty. When applicable, include this penalty on Form 
                      D-403, Line 21a.

                      Failure to File an Informational Return. A partnership income tax return filed after the 
                      original or extended due date (whichever is later) is subject to an informational return penalty. 
                      The penalty is calculated at a rate of $50 per day with a maximum of $1,000. The penalty for 
                      failure to file an informational return applies regardless of whether the partnership income 
                      tax return shows tax due, no tax due, or an overpayment. When applicable, include this 
                      penalty on Form D-403, Line 21a.

                      A partnership is subject to the same tax rate as an individual. For tax year 2023, the individual 
What is the Tax Rate? income tax rate is 4.75%.

                       Form D-403. A partnership required to file a North Carolina tax return must file Form D-403, 
What Forms Should a   using the same tax year the partnership used for federal income tax purposes.   Important: 
                      The partnership must file a Form D-403 for the form year in which the tax year begins. For 
Partnership File? 
                      example, a partnership whose tax year begins on or after January 1, 2023, must use the 
                      2023 Form D-403.

                      The 2023 Form D-403 may also be used if:

                      •   The partnership has a tax year of less than 12 months that begins in 2023. Important: If 
                       the partnership’s tax year is less than 12 months, fill in the beginning and ending dates 
                       for the tax year and fill-in the “Short Period” circle located on page 1 of Form D-403.

                      •   The 2024 Form D-403 is not available at the time the partnership is required to file its tax 
                       return.

                      Form D-403 must contain all of the information required by the Secretary, including the 
                      partnership’s gross income, the deductions allowed under the Internal Revenue Code, each 
                      partner’s distributive share of the partnership’s income, and any North Carolina adjustments. 
                      Importantly, a partner’s distributive share of income includes guaranteed payments made 
                      to the partner from the partnership.

                      Form NC-PE. Every partnership that is required to add North Carolina adjustments to the 
                      partnership’s total income (loss), or is allowed to deduct North Carolina adjustments from 
                      the partnership’s total income (loss), must complete Form NC-PE and attach it to Form 
                      D-403. (For more information, see the instructions for Part 7 on page 13.)

                      Form D-403TC.  Every partnership entitled to claim a tax credit must complete Form 
                      D-403TC and attach it to Form D-403 if the partnership has (1) allocated some or all of a 
                      tax credit to its nonresident owners or partners on whose behalf the partnership pays North 
                      Carolina income tax, or (2) applied a partner’s distributive share of a tax credit against the 
                      partner’s distributive share of the Taxed Partnership’s income tax. Note: A partnership 
                      claiming a tax credit may also have a requirement to attach Form NC-478 or Form NC-
                      Rehab to Form D-403. (For more information, see instructions for Form D-403TC starting 
                      with page 14 of these instructions.) 

                      Form NC-NPA. A nonresident partner that does not wish for the partnership to calculate 
                      and pay North Carolina income tax due on behalf of the nonresident partner must complete 
                      Form NC-NPA and provide the completed form to the partnership. Form NC-NPA affirms 
                      that the partner is not subject to North Carolina income tax or that the partner will pay the 
                      tax with its applicable North Carolina tax return. The Form NC-NPA must be signed by the

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                      partner. An unsigned form is not valid. (For more information, see Form NC-NPA available 
                      on the Department’s website.)

                      Form NC K-1. Every partnership required to file a partnership income tax return must 
                      prepare and give a Form NC K-1 to every person who was a partner in the partnership at any 
                      time during the year.  This form is used to report each partner’s share of the partnership’s 
                      income, North Carolina adjustments, tax credits, etc. Important:     Form NC K-1 must be 
                      provided to each partner on or before the day on which the North Carolina partnership 
                      return is required to be filed. (For more information, see Form NC K-1 available on the 
                      Department’s website.)

                      Form NC K-1 Supplemental Schedule. Every partnership that reports North Carolina 
                      adjustments to a partner on Form NC K-1 must prepare and give Form NC K-1 Supplemental 
                      Schedule to that partner.  This form is used to provide the partner with information necessary 
                      for the partner to prepare its applicable North Carolina tax return. (For more information, 
                      see Form NC K-1 Supplemental Schedule available on the Department’s website.)

                      Important:   Any facsimile or substitute form must be approved by the Department of 
                      Revenue prior to its use. If you use computer-generated returns, the software company is 
                      responsible for requesting approval and receiving an assigned identification number. The 
                      Department publishes a list of software developers who have received approval on our 
                      website. Photocopies of the return are not acceptable. Returns that cannot be processed 
                      by the Department’s imaging and scanning equipment will be returned to the taxpayer 
                      with instructions to refile on an acceptable form.

                      With the exception of Part 5 and Part 6, attachments may not be used as a substitute for 
                      completing Form D-403. If supporting documents are required, a partnership that mails a 
                      paper copy of Form D-403 to the Department must attach the supporting documents behind 
                      the tax return. The supporting documents must contain all required information (including the 
                      partnership’s federal identification number), follow the format of the official schedules, and 
                      must be attached in the same sequence as the schedules appear on Form D-403.

                      A partnership income tax return must be filed on or before the 15th day of the 4th month following 
When Must the Return  the date the partnership’s tax year ended. For example, for calendar year partnerships, the 
                      due date is April 15th. Note: When the due date of the partnership income tax return falls on 
be Filed?
                      a Saturday, Sunday, or a legal holiday in North Carolina or in the District of Columbia, a return 
                      filed by the next business day after the Saturday, Sunday, or legal holiday will be considered 
                      timely filed. (For more information on timely mailing North Carolina tax returns, see “Directive 
                      TA-18-1” available on the Department’s website.)

                      A partnership that receives an automatic extension to file its federal return of partnership 
Can a Partnership Get income will be granted an automatic extension to file its North Carolina partnership income 
                      tax return, Form D-403. In order to receive the extension, the partnership MUST fill in the 
an Extension to File?
                      “Federal Extension” circle on page 1 of Form D-403.    Important: A partnership that fails 
                      to certify on the partnership income tax return that the partnership was granted a federal 
                      extension is subject to all applicable penalties.

                      If a partnership is not granted an automatic federal extension to file the federal return of 
                      partnership income, the partnership may still request an extension of time to file Form D-403 
                      by filing Form D-410P, Application for Extension for Filing Partnership, Estate, or Trust Tax 
                      Return, by the original due date of the partnership income tax return. Important: Without a 
                      valid extension, a partnership income tax return filed after the original due date is subject to 
                      interest and all applicable penalties. 

                      If a partnership chooses not to eFile its partnership income tax return, the return must be 
Where Do I File       mailed  to the following address:
the Return?
                      NORTH CAROLINA DEPARTMENT OF REVENUE
                      P.O. BOX 25000
                      RALEIGH, NC 27640-0640

                      For information on eFile for businesses, visit the Department’s website.

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                      The partnership income tax return must be signed by the managing partner. If the return is 
Who Can Sign the      prepared by a person or firm other than a partner, it must also be signed by the individual 
                      preparing the return. If the partnership is a limited partnership, the return must be signed by a 
Return?
                      general partner. The managing or general partner should provide a telephone number where 
                      that partner may be reached during the day if the Department needs additional information 
                      to process the return.

                      If the partnership wants to allow a paid preparer to discuss certain tax matters with the 
                      Department, the managing or general partner must check the applicable box located in the 
                      signature area on page 6 of Form D-403. If the box is checked, the managing partner is 
                      authorizing the Department to call the paid preparer to answer any questions that may arise 
                      during the processing of the return. The managing or general partner is also authorizing 
                      the paid preparer to:

                      •  Give the Department any information that is missing from the return;
                      •  Call the Department for information about the processing of the return or the status of 
                      the refund or payment(s);
                      •  Receive copies of notices or transcripts related to the return, upon request; and
                      •  Respond to proposed notices of assessment or notices of adjustment.

                      Important:  The managing or general partner is not authorizing the paid preparer to receive 
                      any refund check, bind the partnership (including any additional tax liability), or otherwise 
                      represent the partnership before the Department in an audit or a request for a Departmental 
                      review. Those types of matters require a Power of Attorney, GEN-58, to be filed with the 
                      Department. Paid preparer authority is extended only to an individual paid preparer, not 
                      to other employees of a company. (For more information on Power of Attorney, visit the 
                      Department’s website.)

                      If the partnership owes North Carolina income tax, the Department offers the following 
How Can a Partnership payment options:
Pay the Tax Due?
                      Electronic
                      •  A partnership that uses approved eFile software to file its partnership income tax return 
                      can generally pay North Carolina income tax due electronically (provided the eFile software 
                      vendor supports an option to pay).  Note: Check the Department’s website for a list of 
                      approved eFile software products.

                      •  A partnership can pay North Carolina income tax due electronically using the Department’s 
                      website. To pay tax due via the Department’s website, select “File & Pay” and then select 
                      “Partnership Tax” under “Tax Category.” Note: The partnership can pay tax due by bank 
                      draft (without a convenience fee), or by credit or debit card (with a convenience fee).  

                      Mail
                      A partnership can pay North Carolina income tax due by paper check. Do not send cash. 
                      The Department will not accept a check, money order, or cashier’s check unless it is drawn 
                      on a U.S. (domestic) bank and the funds are payable in U.S. dollars. 

                      If the partnership wishes to mail a paper check, the partnership must complete Form D-403V, 
                      Partnership Income Payment Voucher. Make the partnership’s check or money order payable 
                      to the N.C. Department of Revenue for the full amount due. (For more information, see Form 
                      D-403V available on the Department’s website.)

                      Mail the applicable form(s) and the paper check to the following address:

                      NORTH CAROLINA DEPARTMENT OF REVENUE
                      P.O. BOX 25000
                      RALEIGH, NC 27640-0640

                      A partnership that uses a tax software to prepare its partnership income tax return should 
                      include Form D-403V and payment with its partnership income tax return generated by the 
                      software package. Important: If the partnership owes additional tax on a 2023 amended 
                      partnership income tax return, see “Instructions for Amending Form D-403, Partnership 
                      Income Tax Return,” on page 16 of these instructions. In addition, Form D-403V Amended 
                      should be used when making a payment for a 2023 amended partnership income tax return.

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partnership may elect to contribute to the North Carolina Education
Instructions for Form D-403, Endowment Fund by making a contribution to the fund. To make a
contribution, simply enclose Form NC-EDU and the partnership’s
Partnership Income Tax Return payment with the partnership’s Form D-403. If the partnership
If you are filling out Form D-403 by hand, please use black or blue owes additional income tax on its return and would like to make a
ink only. Do not use red ink or pencil. Print your letters and numbers contribution to the fund, the partnership may write one check and
neatly. If you do not have an entry for a particular line, leave it blank. enclose the check with both Form NC-EDU and Form D-403V.
Do not use dashes, zeros or other symbols to indicate that you have To designate part of the partnership’s overpayment to the North
no entry for that line. (For more information on how to avoid common Carolina Education Endowment Fund, see the instructions for Form
mistakes when filing the partnership’s tax return, see “Before You D-403, Part 1, Line 26 on page 11.
Begin” on page 2 of these instructions.)
Taxed Partnership Election. All partnerships must fill in a circle
answering either “Yes” or “No” to the “Taxed Partnership” question
Demographic and Other Taxpayer Information on page 1 of Form D-403. For North Carolina income tax purposes,
a partnership that is required to file a partnership income tax
Name, Address, and Identification Numbers. Enter the return that elects to pay income tax at the entity-level is a Taxed
partnership’s name, address, Federal Employer Identification Partnership. (For information on whether a partnership is eligible
Number, and North Carolina Secretary of State number (when to make the Taxed Partnership election for 2023, see page 3 of
applicable) on the appropriate lines. these instructions.)

Initial Return. If this is the partnership’s first return in North Carolina, The Taxed Partnership question must be answered by ALL
fill in the circle on page 1 of Form D-403. partnerships, not just partnerships that wish to make the election to
be a Taxed Partnership for tax year 2023. If an eligible partnership
Amended Return. If this is an amended return, fill in the circle answers “Yes” to the Taxed Partnership question, the partnership
on page 1 of Form D-403. Note: The partnership must provide a is a Taxed Partnership for tax year 2023. If the partnership answers
complete explanation as to the reason(s) for filing an amended “No” to the Taxed Partnership question (or fails to respond to the
return, including specific schedule and line number references, in question), the partnership is NOT a Taxed Partnership for tax year
the space provided on page 5 of Form D-403. (For more information 2023.
on filing an amended return, see page 16 of these instructions.)
Reminder: A partnership cannot make the election to be a Taxed
Final Return. If this is the partnership’s final return in North Carolina Partnership if the partnership income tax return is filed after the due
because the partnership terminated or ceased doing business in date of the return, including extension.
North Carolina during the tax year, fill in the circle on page 1 of
Form D-403. Federal Extension. All partnerships must fill in a circle answering
either “Yes” or “No” to the “Federal Extension” question on page 1
Short Period. If this is neither the partnership’s initial return nor of Form D-403. This question must be answered by all partnerships,
the partnership’s final return, and the partnership has a tax year not just partnerships that were granted an automatic extension
of less than 12 months, fill in the circle on page 1 of Form D-403. to file federal Form 1065. Important: If the partnership does not
answer “Yes” to the Federal Extension question, the partnership
Partnership is LLC. If the entity is an LLC and is classified as is subject to all applicable penalties. (For more information on late
a partnership for federal income tax purposes, fill in the circle on filing penalties, see page 5 of these instructions.)
page 1 of Form D-403.
Partnership has Nonresident Owners. If the partnership has one or Part 1. Informational Return and Tax Due for
more nonresident owners, fill in the circle on page 1 of Form D-403. Nonresident Partners and Taxed Partnership

NC-NPAs Attached. If the partnership did not pay income tax
on behalf of one or more nonresident partners, fill in the circle on Lines 1 through 10
page 1 and attach Form NC-NPA to Form D-403. (Form NC-NPA
is available from the Department’s website.) All partnerships complete these lines.

NC-478 Attached. If the partnership claimed a tax credit that is Line 1. Income (Loss). Enter the income (loss) for the partnership
limited to 50% of the entity’s income tax, fill in the circle on page 1 for the tax year. Before making this entry, you must complete Part
and attach Form NC-478 to Form D-403. (Form NC-478 is available
5 and Part 6 of Form D-403. (For more information, see page 13 of
from the Department’s website.)
these instructions.) Reminder: If you are filling out the handwritten
Publicly Traded Partnership. If the partnership is a “publicly traded version of Form D-403, and the amount on Line 1 is negative, fill in
partnership” as described in IRC section 7704(c), fill in the circle on the circle located next to Line 1.
page 1 of Form D-403.
Line 2. Guaranteed Payments to Partners. Enter the total
NC-PE Attached. If a partnership added North Carolina adjustments amount of guaranteed payments made to all partners for services
to federal income (loss) or deducted North Carolina adjustments or for the use of capital.
from federal income (loss), fill in the circle on page 1 and attach
Form NC-PE to Form D-403. (Form NC-PE is available from the Line 4. Additions to Income (Loss). Enter the amount of North
Department’s website.) Carolina adjustments required to be added to federal income (loss).
Before making this entry, you must review Form NC-PE to determine
North Carolina Education Endowment Fund Contribution. A if the partnership is required to add the specific North Carolina

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adjustment to federal income (loss). Part A of Form NC-PE lists all Line 12. Tax Credits Allocated to Nonresident Partners and
North Carolina adjustments required to be added to federal adjusted Taxed Partnership. Enter the amount of tax credits that the
gross income by an individual who files a North Carolina income partnership is entitled to take if the tax credits were allocated
tax return. Some of the adjustments do not apply to a partnership. to (1) nonresident partners on whose behalf the partnership is
To determine if a North Carolina addition applies to a partnership, required to pay tax, and (2) partners whose distributive share of
review applicable federal and North Carolina tax law. Example: income was included in the Taxed Partnership’s North Carolina
Line 14, “Taxed Pass-Through Entity Loss,” does not apply to a taxable income. (For more information, see instructions starting
partnership. (See G.S.105-153.5(c3)) on page 12 for Part 4.)

Line 6. Deductions from Income (Loss). Enter the amount of North Reminder: If a tax credit is claimed on Line 12, Form D-403TC must
Carolina adjustments allowed to be deducted from federal income be filed with Form D-403. Failure to attach Form D-403TC to Form
(loss). Before making this entry, you must review Form NC-PE to D-403 may result in the disallowance of a tax credit.
determine if the partnership is allowed to deduct the specific North
Carolina adjustment from federal income (loss). Part B of Form NC- Line 13. Net Tax Due for Nonresident Partners and Taxed
PE lists all North Carolina adjustments allowed to be deducted from Partnership. Enter the amount of tax due for (1) nonresident
federal adjusted gross income by an individual who files a North partners on whose behalf the partnership pays tax, and (2) the
Carolina income tax return. Some of the adjustments do not apply Taxed Partnership. (For more information, see instructions starting
to a partnership. To determine if a North Carolina deduction applies on page 12 for Part 4.)
to a partnership, review applicable federal and North Carolina tax
law. Example: Line 38, “Taxed Pass-Through Entity Income,” does
not apply to a partnership. (See G.S.105-153.5(c3)) Lines 14 through 27

Line 8. Nonapportionable Net Distributive Partnership Income All partnerships that are due a refund or
(Loss). If a partnership conducts business in North Carolina and at that owe North Carolina income tax, interest or
least one other state and has income that should be classified as penalties must complete these lines.
nonapportionable income, enter the total amount of nonapportionable
net distributive income (loss) as reported on Part 3, Line 1 of Form
D-403. If the partnership’s business is conducted entirely within North Line 14. Payments.
Carolina, leave Line 8 blank. (For more information on apportionable a. Extension. If the partnership filed Form D-410P, Application
and nonapportionable income, refer to the Corporate Income and for Extension for Filing 2023 Partnership Tax Return, enter the
Franchise Tax Bulletin available from the Department’s website.) amount paid with the extension application on Line 14a.

Reminder: If you are using the handwritten version of Form D-403, b. Other Partnerships. If, for tax year 2023, the partnership
fill in the circle located next to Line 8 if the amount reported on Part had North Carolina income tax paid on its behalf by another
3, Line 1 is a nonapportionable loss. partnership, enter the total amount paid on Line 14b. Reminder:
If an amount is entered on Line 14(b) and the partnership
Line 10. Nonapportionable Net Distributive Partnership Income received a Form NC K-1 from another partnership, attach the
(Loss) Allocated to North Carolina. If a partnership conducts form to Form D-403.
business in North Carolina and at least one other state and has
income that should be classified as nonapportionable income, enter c. Withholding from Services. If the partnership had North
the total amount of nonapportionable net distributive income (loss) Carolina income tax withheld from compensation earned for
allocated to North Carolina as reported on Part 3, Line 2 of Form services performed in North Carolina during tax year 2023,
D-403. If the partnership’s business is conducted entirely within North enter the total amount of North Carolina income tax withheld
Carolina, leave Line 10 blank. (For more information on apportionable attributable to all nonresident partners on Line 14(c). Reminder:
and nonapportionable income, refer to the Corporate Income and The partnership must attach to its Form D-403 all 1099 forms
Franchise Tax Bulletin available from the Department’s website.) received by the partnership that report North Carolina tax
withheld.
Reminder: If you are using the handwritten version of Form D-403,
fill in the circle located next to Line 10 if the amount reported on d. Other. If the partnership made payments of North Carolina
Part 3, Line 2 is a nonapportionable loss. income tax not specifically listed on Lines 14a through 14c,
(including estimated income tax payments), enter the total
amount paid on Line 14d.
Lines 11 through 13
A partnership that has nonresident partners or Line 15. Additional Payments (Amended Returns Only). For
more information, see page 16 of these instructions.
that is a Taxed Partnership must complete these
lines if the partnership has North Carolina income Line 17. Previous Refunds (Amended Returns Only). For more
tax due. Before making any entries on these lines, information, see page 16 of these instructions.
you must complete Part 4 of Form D-403 and any
applicable forms or schedules. Line 19. Tax Due. If Line 18 is less than Line 13, the partnership
owes additional tax. Subtract Line 18 from Line 13 and enter the
result on Line 19.
Line 11. Tax Due for Nonresident Partners and Taxed
Partnership. Enter the amount of tax due for (1) nonresident Line 20. Overpayment Before Penalties and Interest. If Line
partners on whose behalf the partnership is required to pay tax, and 18 is greater than Line 13, the partnership has overpaid its
(2) the Taxed Partnership. (For more information, see instructions tax. Subtract Line 13 from Line 18 and enter the amount of the
starting on page 12 for Part 4.) overpayment on Line 20.

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                                                                                                                                        Page 11
Line 21a. Penalties. Enter the amount of penalties due. Penalties         applies, enter an “A” in the “exceptions box” located above Line 
imposed on a partnership include, but are not limited to, the following:  21c, and enter the amount of underpayment interest due, if any, 
                                                                          on Line 21c. 
•  Failure to timely file an informational return on the date it is 
   due.  This penalty applies to a partnership income tax return filed    Line 22. Amount Due. Enter the total amount of tax, penalties,
   after the due date of the return, including extensions, regardless     and interest due for tax year 2023. 
   of whether the tax return reflects a tax due, an overpayment, or 
   no tax due.  The penalty is calculated at a rate of $50 per day        The partnership can pay the amount of tax due online using the 
   with a maximum penalty amount of $1,000.                               Department’s  website  or  mail  a  check  or  money  order  to  the 
                                                                          Department. (For additional details, see page 8 of these instructions.)
•  Failure to timely file a tax return on the date it is due.   This 
   penalty applies to a partnership income tax return filed after the due Line 23. Overpayment After Penalties and Interest.            See the 
   date of the return, including extensions, if the tax return reflects a instructions in the box located above Line 22 of Form D-403.
   tax due.  The penalty is calculated at a rate of 5% of the tax due 
   for each month, or part of a month, the tax return is late, not to     Line 24. 2024 Estimated Income Tax.        If the partnership has 
   exceed 25%.                                                            overpaid its tax for tax year 2023, the partnership may elect to 
                                                                          have a portion of its overpayment applied to its estimated tax for 
•  Failure to pay tax when due.       This penalty applies to a           the following year by entering the amount to be applied on Line 24.  
   partnership income tax return filed after the due date of the          Reminder: The election to apply any overpayment to 2024 cannot 
   return, not including extensions.                                      be changed after the 2023 return is filed.
For more information on penalties that apply to partnerships, see         Note: The last allowable date to make a 2024 estimated income 
                                                                          tax payment is December 15, 2024. Therefore, to apply the 2023 
page 5 of these instructions.
                                                                          refund to tax year 2024, the partnership must file its 2023 tax return 
Line 21b. Interest.  Enter the amount of interest due on the tax          by December 15, 2024.
reported on Line 19. Interest is charged on taxes paid after the 
                                                                          Line 25. North Carolina Nongame and Endangered Wildlife 
original due date even if an extension of time to file the tax return 
                                                                          Fund. A partnership may elect to contribute part or all of its 
is granted. The rate is established semiannually by the Secretary 
                                                                          overpayment to the North Carolina Nongame and Endangered 
of Revenue and is listed on the Department’s website.
                                                                          Wildlife Fund (Wildlife Fund). The tax deductible contribution is 
Line 21c. Interest on the Underpayment of Estimated Income                essential to match private and federal grants to pay for conservation 
Tax (Taxed Partnerships  Only). If a Taxed Partnership owes               projects from sea turtles to songbirds, and native fish to bats. 
interest on the underpayment of estimated tax, enter the amount           Conserving these species and their habitat is made possible by 
of interest on Line 21c. Note: Interest on the underpayment of            contributions. Donations provide most of the funds for conservation 
estimated income tax may increase the tax liability of the Taxed          of North Carolina’s endangered species and native backyard wildlife. 
Partnership or reduce its overpayment.                                    If the partnership wishes to contribute to the Wildlife Fund, enter the 
                                                                          amount of the contribution on Line 25. The election to contribute 
To determine if underpayment interest is due, complete Form NC-           to the Wildlife Fund can not be changed after the  return is 
429B PTE, Underpayment of Estimated Tax by Taxed Pass-Through             filed. If the partnership is not due a refund, it may still contribute to 
Entities, available from the Department’s website.    Important: A        this Wildlife Fund by mailing a donation directly to:  
Taxed Partnership may be able to reduce or eliminate underpayment 
interest if the Taxed Partnership qualifies for one of the exceptions     North Carolina Wildlife Resources Commission
listed below.                                                             1702 Mail Service Center
                                                                          Raleigh, North Carolina 27699-1700
Exceptions to Underpayment of Estimated Tax. In certain 
cases, a Taxed Partnership may reduce or eliminate underpayment           Checks should be made payable to the Nongame & Endangered 
interest. If one of the exceptions listed below applies to the Taxed      Wildlife Fund. For more information about the Fund, check out www.
Partnership,  enter  the  applicable  code  in  the  “exceptions  box”    ncwildlife.org/Give-Donate.
located above Line 21c and enter the amount of underpayment 
interest, if any, on Line 21c.                                            Line 26. North Carolina Education Endowment Fund. The North 
                                                                          Carolina Education Endowment Fund (North Carolina Education 
•  Not a Taxed Partnership in Prior Year. If the Taxed Partnership        Fund) was created to provide additional support and funding for 
   did not make the election to be a Taxed Partnership in North           K-12 public schools. If the partnership wishes to contribute part 
   Carolina for tax year 2022, the Taxed Partnership is not subject       or all of its overpayment to the North Carolina Education Fund, 
   to estimated tax interest. If this exception applies, enter a “P”      enter the amount of the contribution on Line 26. The election to 
   in the “exceptions box” located above Line 21c, and leave Line         contribute to the North Carolina Education Fund can not be 
   21c blank.                                                             changed after the return is filed. 
•  Short Taxable Year. If the Taxed Partnership’s tax year is less        If the partnership is not due a refund, it may still contribute to the 
   than four months, or if the requirements to make an estimated tax      North Carolina Education Fund by (1) making a contribution with its 
   payment were not met before the first day of the last month in the     tax return, or (2) mailing a donation directly to the State.  
   short tax year, the Taxed Partnership is not subject to estimated tax 
   interest. If this exception applies, enter an “S” in the “exceptions   If the partnership makes a contribution with its tax return, the 
   box” located above Line 21c, and leave Line 21c blank.                 partnership MUST send a Form NC-EDU (North Carolina Education 
                                                                          Fund Payment Voucher), along with its contribution.  Form NC-EDU 
•  Annualized Income. If the Taxed Partnership annualized its             is a personalized voucher that allows the Department to process the 
   taxable income for tax year 2023, the partnership may be able          contribution accurately and efficiently with fewer errors. To generate 
   to reduce or eliminate underpayment interest. If this exception        Form NC-EDU, visit the Department’s website.

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If the partnership wishes to make a donation directly to the State, Line 4, enter each partner’s distributive share of the additions on Line 6.
mail the contribution to:
Line 7. If the partnership entered North Carolina deductions on Part
North Carolina Department of Public Instruction, Cash Collections 1, Line 6, enter each partner’s distributive share of the deductions
6336 Mail Service Center, on Line 7.
Raleigh, North Carolina 27699-6336
Reminder: For Lines 6 and 7, the partnership must furnish Form
Line 27. Amount to be Refunded. Enter the amount of overpayment NC K-1 Supplemental Schedule to each partner that was allocated
to be refunded on Line 27. The amount to be refunded cannot North Carolina additions or deductions. (Form NC K-1 Supplemental
exceed Line 23 minus the total of Lines 24, 25, and 26. Schedule is available on the Department’s website.)

Part 2. Apportionment Percentage Line 8. If the partnership did not elect to be a Taxed Partnership for
tax year 2023 AND the partnership qualified to claim a tax credit in
A partnership whose trade or business activities in North Carolina are 2023, enter each partner’s distributive share of the tax credit passed
unified and integrated with its trade or business activities in another through to the partner. The partnership MAY NOT pass through to
state is required to apportion its partnership income (loss). Partnership the partner a tax credit that is required to be taken in installments if
income (loss) must be apportioned using the partnership’s sales factor the first installment of the tax credit was taken in a taxable period for
only. Important: The partnership’s sales factor is a ratio determined which the election to be a Taxed Partnership was in effect. Important:
using the corporate apportionment formula outlined in G.S. 105-130.4. If the partnership made an election to be a Taxed Partnership for tax
(For more information on the sales factor, see the Corporate Income year 2023 and the first installment of the tax credit was taken in a
and Franchise Tax Bulletin available on the Department’s website.) taxable period for which the election to be a Taxed Partnership was
not in effect, the partnership must pass through to the partner the
partner’s distributive share of the tax credit installment the partnership
Part 3. Nonapportionable Net Distributive is qualified to claim in 2023. (For more information on tax credits and
Partnership Income (Loss) Taxed Partnerships, see G.S. 105-154.1(c)).

If a partnership classified partnership income (loss) as NC Resident. All partnerships must fill in one circle for each partner
nonapportionable on Part 1, Line 8 or Part 1, Line 10, Part 3 must answering either “Yes” or “No” to the “NC Resident” question located
be completed. Important: For North Carolina income tax purposes, under Line 8 of Part A. Important: If the partnership does not answer
apportionable income means all income that is apportionable under “Yes” to the NC Resident question for one or more partners, the
the United States Constitution. Nonapporationable income means all Department may enforce the partnership’s liability for the tax not paid
income other than apportionable income. (For more information on on each partner’s share of the income by sending the partnership a
nonapportionable income, see the Corporate Income and Franchise notice of proposed assessment in accordance with G.S. 105-241.9.
Tax Bulletin available on the Department’s website.)
B. Income Attributable to North Carolina
Part 4. Partner Information and Tax All partnerships must complete Part B.
Calculation for Nonresident Partners and
Taxed Partnerships Line 9. If the partnership reported guaranteed payments to partners on
Part 1, Line 2, enter each partner’s distributive share of the guaranteed
payment applicable to the partnership’s apportionable income (loss).
A. Partners’ Share of Income, Adjustments,
Tax Credits, and Other Items Line 14. If the partnership reported guaranteed payments to partners
on Part 1, Line 2, enter each partner’s distributive share of the
All partnerships must complete Part A. guaranteed payment applicable to the partnership’s nonapportionable
income (loss) allocated to North Carolina.

Lines 1 through 3. Enter each partner’s identification number, Line 16. If, for federal income tax purposes, the partnership was
name, and address. required to report to its partners items of income that required
special treatment on the individual partners’ tax return (i.e., a
Line 4. Enter each partner’s percentage share of profit and loss used separately stated item of income), enter each partner’s distributive
for federal income tax purposes. (From partner’s federal Schedule share of that income item on Line 16 ONLY if the income was not
K-1 for Form 1065) Note: If a partner’s percentage share of profit reported on Part 1, Line 1 for Form D-403. (For more information
is not the same as the partner’s percentage share of loss, write on what is considered a separately stated item of income, see the
“various” on Line 4 and attach a schedule to Form D-403 that lists instructions for federal Form 1065.)
each partner’s percentage share of profit and loss.

Line 5. Enter each partner’s entity type from the following list: C. Tax Computation for Nonresident Partners
C Corp, Estate, Foreign Gov, Grantor Trust, Individual, IRA,
Partnership, S Corp, Tax Exempt or Trust. All partnerships must complete Part C for all
nonresident partners on whose behalf the
Note: If the partner is an LLC, enter the entity type that corresponds partnership is required to pay North Carolina
with the partner’s federal tax classification. If the partner is a income tax.
disregarded entity, such as a single member LLC that did not elect to be
treated as a corporation, enter the entity type of the beneficial owner.
NC-NPA Form Attached. If a partnership is required to pay tax
Line 6. If the partnership entered North Carolina additions on Part 1, due on behalf of a nonresident partner, the partnership must fill

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Page 13
in a circle answering either “Yes” or “No” to the “NC-NPA Form the tax credit was taken in a taxable period for which an election to
Attached” question located above Line 18. If the partnership be a Taxed Partnership was not in effect. (For more information on
answers “Yes” to the question, Form NC-NPA must be attached tax credits and Taxed Partnerships, see G.S. 105-154.1(c)).
to Form D-403. If the partnership answers “No” to the question
(or fails to respond to the question), the partnership is required
to pay tax due on the nonresident partner’s distributive share of E. Tax Computation of Taxed Partnership
income attributable to North Carolina. Important: If the partnership
answers “Yes” to the “NC-NPA Form Attached” question but fails All Taxed Partnerships must complete Part E for
to attach a valid Form NC-NPA to Form D-403 for a nonresident each partner NOT classified as a corporation or a
partner, the Department is required to assess the partnership tax partnership.
due based on the nonresident partner’s distributive share of income
attributable to North Carolina.
Line 24. If the partnership is a Taxed Partnership, enter each
Reminder: A partnership that is comprised of one or more partner’s distributive share of income attributable to North Carolina
nonresident partners that DID NOT MAKE the election to be a if the partner is NOT classified as a corporation or a partnership.
Taxed Partnership for tax year 2023 is required to pay tax due on Important: For the applicable partners, the amount entered on
behalf of all of its nonresident partners unless the partner is eligible Line 24 must equal the amount entered on Part 4, Line 17 for the
to and completes Form NC-NPA. A partnership that is comprised same partner.
of one or more nonresident partners that DID MAKE the election
to be a Taxed Partnership for tax year 2023 is required to pay tax Line 25. If the partnership is a Taxed Partnership, multiply the
due on behalf of all nonresident partners classified as a corporation Partners’ Total as reported on Line 24 by 4.75%.
or a partnership unless the partner completes Form NC-NPA. (For
more information on what type of partner is eligible to file Form Line 26. If the partnership is a Taxed Partnership, enter the total
NC-NPA, see Form NC-NPA, Nonresident Partner Affirmation, amount of tax credits the Taxed Partnership is qualified to take
available from the Department’s website.) in 2023. Before making this entry, the Taxed Partnership must
complete Form D-403TC. Important: The amount entered on
Line 18. For each nonresident partner on whose behalf the Line 26 cannot exceed the amount entered on Line 13 of Form
partnership is required to pay tax, multiply the amount reported D-403TC. (For more information on Form D-403TC, see page 14
on Line 17 by 4.75%. of these instructions.)

Line 19. For each nonresident partner on whose behalf the Line 27. If the partnership is a Taxed Partnership, subtract Line
partnership is required to pay tax, enter the nonresident partner’s 26 from Line 27.
distributive share of tax credit the partnership is qualified to take
in 2023. Before making this entry, the partnership must complete Reminder: The partnership must furnish each partner the
Form D-403TC. Important: The amount entered in the Partners’ information necessary for the partner to file its North Carolina
Total column cannot exceed the amount entered on Line 13 of tax return. (For more information, see Form NC K-1 and NC K-1
Form D-403TC. (For more information on Form D-403TC, see Supplemental Schedule, available from the Department’s website.)
page 14 of these instructions.)
Line 20. For each nonresident partner on whose behalf the Part 5. Ordinary Business Income (Loss)
partnership is required to pay tax, subtract Line 19 from Line The computation of the partnership’s net income from its trade or
18. Note: When filing an amended return, see page 16 of these business activities follows the determination of ordinary income
instructions. as defined by the Internal Revenue Code. All partnerships must
transfer the information from federal Form 1065, Lines 1 through
Reminder: The partnership must furnish each partner the 22 to Part 5. Note: In lieu of completing Part 5, the partnership may
information necessary for the partner to file its North Carolina attach a copy of federal Form 1065 and all supporting schedules
tax return. (For more information, see Form NC K-1 and NC K-1 to Form D-403.
Supplemental Schedule, available from the Department’s website.)

Part 6. Partners’ Distributive Share Items
D. Partners’ Share of Taxed Partnership’s
Tax Credits Line 1. Enter the partnership’s ordinary business income (loss).
Note: The amount entered on Line 1 must equal the
All Taxed Partnerships must complete Part D for amount reported on Part 5, Line 22, or federal Form
1065, Line 22.
each partner NOT classified as a corporation or a
Lines 2-11. Enter the amounts reported by the partnership on
partnership. federal Form 1065, Schedule K, Lines 2 through 11.
Note: In lieu of completing Part 6, the partnership may
Lines 21 and 22. If the partnership is a Taxed Partnership, enter the attach a copy of federal Form 1065 and all supporting
identification number and name of each partner NOT classified as a schedules to Form D-403.
corporation or a partnership.
Line 23. If the partnership is a Taxed Partnership, enter the Part 7. Adjustments to Income (Loss)
distributive share of tax credits the Taxed Partnership is eligible
to claim for each partner NOT classified as a corporation or a When calculating North Carolina taxable income, a partnership may
partnership. Important: A Taxed Partnership cannot claim any tax be required (or allowed) to make certain North Carolina adjustments
credit required to be taken in installments if the first installment of to income (loss). If a partnership makes North Carolina adjustments

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Page 14
to income (loss), it MUST complete Form NC-PE and attach the form
to Form D-403. Reminder: Both pages of Form NC-PE must be Part 1. Tax Credits Not Subject to
attached to Form D-403, even if the partnership completes only one 50% of Tax Limit
part of the form. Failure to attach both pages of the form may cause
the Department to be unable to process the partnership tax return. Article 3D - Historic Rehabilitation Tax Credits. To claim a
tax credit on Line 1 or Line 2, the partnership must obtain an
Important: Form NC-PE lists ALL North Carolina adjustments eligibility certification from the State Historic Preservation Office.
permitted to an individual who is required to file a North Carolina (For additional information, see Article 3D of Chapter 105 and the
individual income tax return. Only adjustments allowed by North Corporate Income Tax Bulletin, available from the Department’s
Carolina law can be claimed by the partnership. Some of the website.)
adjustments listed on Form NC-PE do not apply to a partnership. To
determine if a North Carolina adjustment applies to a partnership, Line 1. Rehabilitating an Income-Producing Historic Structure.
review applicable federal and North Carolina tax law. Example: Enter the installment amount of the tax credit for rehabilitating an
Line 38, “Taxed Pass-Through Entity Income,” does not apply to a income-producing historic structure. Important: If the partnership
partnership. (See G.S.105-153.5(c3)) took the first installment of the tax credit in 2023, enter the amount
of qualified rehabilitation expenditures on Part 4, Line 14. DO NOT
If you do not see an item listed on Form NC-PE that you think should enter an amount on Part 4, Line 14, when the partnership takes
be an addition or a deduction, you should contact the Department any future installment of the tax credit or takes any carryforward of
before making the adjustment. an unused installment of the tax credit.

Line 2. Rehabilitating a Nonincome-Producing Historic
Instructions for Form D-403TC, Structure. Enter the installment amount of the tax credit for
Partnership Tax Credit Summary rehabilitating a nonincome-producing historic structure. Important:
If the partnership took the first installment of the tax credit in 2023,
Form D-403TC and, if applicable, Form NC-478, and Form NC- enter the amount of rehabilitation expenses on Part 4, Line 15. DO
Rehab must be filed by every partnership eligible to take a tax credit NOT enter an amount on Part 4, Line 15, when the partnership takes
or an installment of a tax credit against its tax due. In addition, the any future installment of the tax credit or takes any carryforward of
partnership must attach a schedule showing the computation of an unused installment of the tax credit.
each tax credit claimed and each partner’s distributive share of
that tax credit. Article 3H - Mill Rehabilitation Tax Credit. To claim a tax credit on
Line 3 or Line 4, the partnership must obtain an eligibility certification
Instructions for partnerships that do not make the election to from the State Historic Preservation Office. Note: When the eligible
be a Taxed Partnership in 2023. A partnership that does not elect site is placed into service in two or more phases in different years,
to be a Taxed Partnership may apply each nonresident partner’s the amount of credit that may be claimed in a year is limited to
distributive share of the partnership’s tax credit against the tax due the amount of expenses associated with the phase placed into
on behalf of the nonresident partner. The partnership MAY NOT service during that year. (For additional information, see Article 3H
apply a tax credit against the tax due on behalf of the nonresident of Chapter 105 and the Corporate Income Tax Bulletin, available
partner if the tax credit is required to be taken in installments and from the Department’s website.)
the first installment of the tax credit was taken in a taxable period
for which the election to be a Taxed Partnership was in effect. Line 3. Rehabilitating an Income-Producing Historic Mill
Facility. Enter the total amount of tax credit for rehabilitating an
income-producing historic mill facility.
Instructions for Taxed Partnerships. A Taxed Partnership that Important: If the partnership
took the tax credit in tax year 2023, enter the amount of qualified
qualifies to claim a tax credit may apply each non-corporate or non-
rehabilitation expenditures on Part 4, Line 16. DO NOT enter
partnership partner’s distributive share of the Taxed Partnership’s an amount on Part 4, Line 16, when the partnership takes any
tax credit against the partner’s distributive share of the Taxed carryforward of the unused tax credit.
Partnership’s tax due. A Taxed Partnership MAY NOT claim a
tax credit against the partner’s distributive share of the Taxed Line 4. Rehabilitating a Nonincome-Producing Historic
Partnership’s tax due, if the tax credit is required to be taken in Mill Facility. Enter the installment amount of the tax credit
installments and the first installment of the tax credit was taken in a for rehabilitating a nonincome-producing historic mill facility.
taxable period for which the election to be a Taxed Partnership was Important: If the partnership took the first installment of the
not in effect. Important: A Taxed Partnership that has nonresident tax credit in 2023, enter the amount of rehabilitation expenses
partners classified as corporations or partnerships may NOT apply on Part 4, Line 17. DO NOT enter an amount on Part 4, Line
these partners’ distributive share of the Taxed Partnership’s tax 17, when the partnership takes any future installment of the tax
credit against the tax due on behalf of the nonresident partner. credit or takes any carryforward of an unused installment of the
tax credit.
(For more information on tax credits and Taxed Partnerships, see
G.S. 105-154.1(c)). Article 3L - Historic Rehabilitation Tax Credits Investment
Program. To claim a tax credit on Line 5 or Line 6, the partnership
must obtain an eligibility certification from the State Historic
If the partnership claims a tax credit on Form D-403, Preservation Office. Note: When an income-producing structure
Line 12, the partnership MUST attach Form D-403TC to is placed into service in two or more phases in different years,
Form D-403. If the partnership does not, the Department the amount of credit that may be claimed in a year is limited to
may be unable to process the partnership’s return. the amount of expenditures associated with the phase placed into
Failure to substantiate a tax credit may result in the service during that year. (For additional information, see Article 3L
disallowance of the tax credit. of Chapter 105 and the Corporate Income Tax Bulletin, available
from the Department’s website.)

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qualified rehabilitation expenditures incurred. Note: The qualified
rehabilitation expenditures must have been incurred before January
If the partnership claims a tax credit under Article 3L,
1, 2015.
the partnership MUST complete Form NC-Rehab and
attach it to the front of Form D-403. If the partnership
Line 15. Rehabilitation Expenses for Rehabilitating Nonincome-
does not, the Department may be unable to process
Producing Historic Structure. If tax year 2023 is the first year
the partnership’s return. Failure to substantiate a tax
the partnership took an installment of the nonincome-producing
credit may result in the disallowance of the tax credit. tax credit allowed under Article 3D, enter the total amount of
rehabilitation expenses incurred. Note: The rehabilitation expenses
Line 5. Rehabilitating an Income-Producing Historic Structure. must have been incurred before January 1, 2015.
Enter the total amount of tax credit for rehabilitating an income-
producing historic structure. (From Form NC-Rehab, Part 4, Line 23.) Line 16. Qualified Rehabilitation Expenditures for Income-
Producing Rehabilitated Mill Property. If tax year 2023 is the first
Line 6. Rehabilitating a Nonincome-Producing Historic year the partnership took the income-producing tax credit allowed
Structure. Enter the total amount of the tax credit for rehabilitating under Article 3H, enter the total amount of qualified rehabilitation
a nonincome-producing historic structure. (From Form NC-Rehab, expenditures incurred.
Part 4, Line 26.)
Line 17. Rehabilitation Expenses for Nonincome-Producing
Line 7. Tax Credits Carried Over From Previous Year - Taxed Rehabilitated Mill Property. If tax year 2023 is the first year
Partnerships Only. Enter the amount of tax credits carried over the partnership took an installment of the nonincome-producing
from previous tax years. Important: Do not include any carryover tax credit allowed under Article 3H, enter the total amount of
of income tax credits taken on Form NC-478 or Form NC-Rehab. rehabilitation expenses incurred.

Line 9. Amount of Income Tax due. Enter the amount of income
tax due from Form D-403, Part 1, Line 11.

Part 2. Tax Credits Subject to
50% of Tax Limit

Line 11. Total Tax Credits Subject to 50% Limit Taken in 2023.
Enter the total amount of tax credits taken by the partnership in
2023 that are limited to 50% of the partnership’s tax due. Generally,
the Form NC-478 series is used to calculate and report these types
of credits. (For additional information on the Form NC-478 series,
see the instructions for the NC-478 series, available from the
Department’s website.)

Important: A partnership that qualified for a tax credit that has
expired or sunset may generally continue to take any remaining
installments in 2023 if the partnership continues to meet the statutory
eligibility requirements previously required of each particular tax
credit.

Part 3. Total of Credits Applied
to 2023

Line 12. Reserved. DO NOT USE THIS LINE. This line will be
used by the Department to accommodate future changes to the
2023 tax return, if applicable. The unauthorized use of this line
may prevent the Department from processing the partnership’s
tax return.

Line 13. Tax Credits Taken in 2023. Add Lines 10 through 12
and enter the sum of tax credits to be taken for tax year 2023. (For
partnerships that do not elect to be a Taxed Partnership, enter this
amount on Form D-403, Part 4, Line 19. For Taxed Partnerships,
enter this amount on Form D-403, Part 4, Line 26.)

Part 4. Qualified Rehabilitation Expenditures
and Expenses

Line 14. Qualified Rehabilitation Expenditures for Rehabilitating
Income-Producing Historic Structure. If tax year 2023 is the first
year the partnership took an installment of the income-producing
tax credit allowed under Article 3D, enter the total amount of

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                   Instructions for Amending Form D-403, Partnership Income Tax Return

A partnership must use the 2023 Form D-403 to amend its 2023 partnership income tax return. Unless specifically instructed otherwise, 
the partnership should complete the return in its entirety. For lines on the amended return that are unchanged from the original return, the 
partnership should enter the amount from the original return.

When filing an amended Form D-403, fill in the “Amended Return” circle located in the demographic section on page 1, and provide a 
complete explanation as to the reason(s) for filing an amended return in the space provided on page 5 of Form D-403. You must also attach 
the following information to the partnership’s amended return as documentation to support the changes, if applicable:

•  A copy of a federal audit report. 
•  A copy of an amended federal Form 1065 or federal Form 1065-X and supporting federal schedules and forms if changes are also 
applicable to your State return. 
•  Form NC K-1 to verify tax payments made on the partnership’s behalf by other pass-through entities. 
•  Federal Form 1099 statement(s) to verify a change in income tax withheld. 
•  Any other required schedule or supporting form.

If the partnership filed Form NC-PE or Form D-403TC with the original Form D-403, the partnership MUST file the form(s) 
with the amended Form D-403, even if there is no change to the form(s).

Taxed Partnership Election. An eligible partnership MAY NOT make or revoke the Taxed Partnership Election by filing an amended Form 
D-403 after the original Form D-403 is filed. 

Part 1, Lines 1 through 10. Make any necessary changes to the original Form D-403 by showing the corrected amount on Lines 1 through 
10, if applicable. Important: If the amount reported on Lines 4 or 6 is different from the amount originally reported, enter the amount from 
the corrected Form NC-PE. Attach the corrected Form NC-PE to the amended Form D-403. Note: If you are filling out the handwritten 
version of Form D-403, and the corrected amount of Line 1, 3, 5, 7, 8, 9, or 10 is negative, fill in the circle located next to line.

Part 1, Lines 11 through 13. Before making necessary changes to these lines, you must complete Part 4. If the amount reported on Line 
12 is different from the amount originally reported, you must attach the corrected Form D-403TC to the amended Form D-403. 

Part 1, Lines 14a through 14d. Make any necessary changes to the original Form D-403 by showing the corrected amount on Lines 14a 
through 14d. 

Part 1, Line 15.   Enter the amount of North Carolina income tax paid, if any, shown on Line 19 of the original Form D-403, plus any 
additional tax paid after the original Form D-403 was filed. DO NOT include payments of interest or penalties (Form D-403, Line 21d).
Note: If the partnership did not pay the amount of tax reflected on Form D-403, Line 19, enter only the amount of tax actually paid.
Part 1, Line 17. Enter the amount of overpayment, if any, shown the original return (Form D-403, Line 23).  If the overpayment claimed on 
the original return was previously adjusted by the Department, enter the adjusted overpayment on Line 17. Important: Include any portion of 
the overpayment that was previously refunded, applied to any outstanding debt or estimated income tax, or contributed to the North Carolina 
Nongame and Endangered Wildlife Fund or the North Carolina Education Endowment Fund. DO NOT include interest received on any refunds.
Part 1, Line 18. If Line 17 is greater than Line 16, the partnership previously received a refund greater than it was entitled to. If you are 
filling out the handwritten version of Form D-403, and the amount on Line 18 is negative, fill in the circle located next to Line 18.
Part 1, Line 22. If Line 22 reflects an amount due, the partnership must complete Form D-403V Amended, Amended Partnership 
Income Payment Voucher,      if the partnership mails a paper check for payment of tax due. Form D-403V Amended is available from 
the Department’s website. The voucher allows the Department to process the amended partnership income tax return payment more 
accurately and efficiently with fewer errors. Enclose the completed voucher and payment with the partnership’s amended tax return.   Do 
not send cash. The Department will not accept a check, money order, or cashier’s check unless it is drawn on a U.S. (domestic) bank 
and the funds are payable in U.S. dollars. 
Part 1, Line 24. If the partnership previously applied part or all of an overpayment to estimated income tax, (Form D-403, Line 24), DO 
NOT enter the amount again on the amended return.  However, if the amended return reflects an additional overpayment, the partnership 
may apply that overpayment to estimated income tax by entering the amount on Line 24.  The election to apply an overpayment to 
estimated income tax cannot be changed after the North Carolina partnership return is filed.
Important: In order to apply an overpayment to estimated income tax, the amended return must be filed on or before the last allowable date 
to make an estimated income tax payment for the tax year. For tax year 2024, the last allowable date a calendar year Taxed Partnership 
can make an estimated income tax payment is December 15, 2024. Therefore, to apply an overpayment to 2024 estimated income tax, 
the Taxed Partnership must file the amended D-403 on or before December 15, 2024.
Part 1, Lines 25 and 26. If the partnership previously contributed part or all of an overpayment to either the North Carolina Nongame and 
Endangered Wildlife Fund or the North Carolina Education Endowment Fund, (Form D-403, Line 25 or Line 26), DO NOT enter the amount 
again on the amended return.  However, if the amended return reflects an additional overpayment, the partnership may contribute that

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overpayment to either fund by entering the contribution on Line 25 or Line 26, respectively. The election to contribute an overpayment
to the North Carolina Nongame and Endangered Wildlife Fund or the North Carolina Education Fund cannot be changed after
the North Carolina partnership return is filed.
Part 1, Line 27. Enter the amount of overpayment to be refunded to the partnership on Line 27.
Part 2 and Part 3. Make any necessary changes to the original Form D-403 by showing the corrected amount on the applicable line.
Part 4, Lines 1 – 32. Make necessary changes to the original Form D-403 by showing the corrected amount on the applicable line. Important:
If the amount reported on Line 6, 7, 8, 19, 23, or 26 is different from the amount originally reported, the partnership must complete a corrected
Form NC-PE, Form D-403TC, Form NC-478, or Form NC-Rehab, if applicable. In addition, review the following specific line instructions.
• Line 6 or 7. If the amount reported on Line 6 or 7 is different from the amount originally reported for any partner, enter the corrected
amount of the partner’s distributive share of North Carolina additions or deductions, if applicable.
• Line 8. If the amount reported on Line 8 is different from the amount originally reported for any partner, enter the corrected amount of
the partner’s distributive share of tax credit that the partner can claim.
• Line 19. If the amount reported on Line 19 is different from the amount originally reported for any partner, enter the corrected amount
of the nonresident partner’s distributive share of tax credit used against tax due. Important: The partnership must attach a schedule
showing the computation of each tax credit claimed and each partner’s distributive share of that tax credit.
• Line 20. A partnership MAY NOT request a refund of an overpayment made on behalf of a nonresident partner if the partnership
has already filed its return and paid the tax due. The nonresident partner may, on its own income tax return, request a refund of an
overpayment made on its behalf by the partnership within the statute of limitations for refunds. Therefore, if the amount of Line 20 for
a nonresident partner is less than the amount originally reported on Line 20 for that nonresident partner, the partnership MUST enter
the amount originally reported on Line 20 for that nonresident partner.
• Line 23. If the amount reported on Line 23 is different from the amount originally reported for any partner, enter the corrected amount
of each partner’s distributive share of tax credit the Taxed Partnership is eligible to claim.

• Line 26. If the amount reported on Line 26 is different from the amount originally reported, enter the corrected amount. Important: The
partnership must attach a schedule showing the computation of each tax credit claimed and each partner’s distributive share of that tax
credit.
Part 5 and Part 6. Make any necessary changes to the original Form D-403 by showing the corrected amount on the applicable line.
Part 7. Make any necessary changes to the original Form NC-PE by showing the corrected amount on the applicable line, and enter the
corrected amounts on Part 1, Line 4 or Part 1, Line 6, if applicable. Attach the corrected Form NC-PE to the amended Form D-403.
Form NC K-1 (and Form NC K-1 Supplemental Schedule, if applicable). If a partnership files an amended Form D-403 for a tax year,
the partnership must furnish each impacted partner an amended Form NC K-1 (and Form NC K-1 Supplemental Schedule, if applicable) to
report the partner’s share of the partnership’s income (loss), North Carolina adjustments, North Carolina tax credits, etc. if the information
originally reported to the partner has changed. The partnership must provide the partner with information necessary for the partner to file
the applicable North Carolina tax return.

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