Indiana partnerships include nonresident partners on shared tax returns

Partnerships file a shared Indiana income tax return for their nonresident partners. This applies to partnerships and their nonresident partners, including people and entities that do not live or are not domiciled in Indiana. The return must include every nonresident partner, even one with other Indiana-source income. These rules apply to pass-through entity returns due after the law's passage, including returns with allowed extensions.

A pass-through entity that leaves required nonresident owners off its shared return owes a $500 penalty. This applies to pass-through entities that must file shared returns for nonresident partners, shareholders, or beneficiaries. The penalty applies when an omitted owner has more than zero dollars of income from the entity that comes from Indiana. Whether an owner must be listed is generally judged when the entity files its return, unless the entity acted fraudulently or intentionally or recklessly disregarded tax law. These rules apply to pass-through entity returns due after the law's passage, including returns with allowed extensions.