Pass-Through Entities - Update to Existing Guidelines
On September 21, 2007, the Department of Taxation published guidelines regarding the treatment of pass-through entities subject to the withholding tax on nonresident owners (Public Document 07-150, also available on the Town Hall). These guidelines state that the guidelines may be updated in the future as necessary.
Since the publication of the Pass-Through Entity Withholding Guidelines, a number of additional issues have arisen regarding the treatment of pass-through entities that are subject to the withholding tax on nonresident owners. As a result, the Department updated these guidelines on December 22, 2015 to address the following:
- Relax the requirements for filing a unified return;
- Increase the types of pass-through entities that are exempt from withholding;
- Increase the types nonresident owners that pass-through entities are not required to withhold for;
- Define investment pass-through entities;
- Establish that an upper-tier entity cannot withhold for a lower-tier entity;
- Set forth how pass-through entities are to allocate and apportion income;
- Update the penalties section to reflect changes to the late payment and late filing penalties;
- Any additional issues raised by public comments.
This website contains documents and links to websites that are relevant to the drafting of these updated guidelines.
Guideline Development Documents
Workplan - Updated Guidelines (PDF 12 KB)
Draft Guidelines (PDF 70 KB)
Final Guidelines (PDF 86 KB)