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Level 3
May 13, 2021

K-1 from out-of-state business

  • May 13, 2021
  • 3 replies
  • 16 views

Do taxpayers who receive K-1's from businesses whose income is generated in a different state need to file a non-resident return in that state (assuming there's enough income to require a return)?

For example, a Florida resident receives an 1120S K-1 (50% owner of S-corp) based out of Maryland.  All income from this business is generated in MD.  Is a nonresident MD return required?

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    3 replies

    IRonMaN
    Level 15
    May 13, 2021

    Yes, if the amount is over the state's filing threshold.

    Slava Ukraini!
    BobKamman
    Level 15
    May 13, 2021

    Sometimes

    Level 3
    May 14, 2021

    Sometimes as in if there's enough income to require a tax return?  Or sometimes for another reason?

    sjrcpa
    Level 15
    May 14, 2021

    And they are likely to get back some of the MD nonresident withholding when they file the MD return.

    The more I know the more I don’t know.
    Level 3
    May 14, 2021

    Withholding from what?  There were no MD taxes withheld on the W2 and there aren't any withheld on the K-1.

    sjrcpa
    Level 15
    May 14, 2021

    There should have been for the K-1 income.

    The more I know the more I don’t know.