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March 1, 2025
Question

Iowa LLC not paying tax for nonresident members who opt out of the composite return tax payment

  • March 1, 2025
  • 0 replies
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According to this page from the Iowa Department of Revenue, nonresident LLC members can opt out of a composite return tax payment (provided they fill out a Nonresident Member Composite Agreement (41-175)).

 

Where can I make this election for members in Turbotax for Business?

 

Currently the K-1s being generated show that tax was paid on behalf of the members, but that is not true.

 

Note: Here is the relevant section from the page referred to above:

 

"A nonresident member who is not exempt from the requirement to have the pass-through entity pay composite tax on their behalf as described above may be excluded from the composite return tax payment requirement only if the nonresident member and pass-through entity complete and sign the Nonresident Member Composite Agreement (41-175). The completed agreement does not need to be filed with the Department, but it must be retained by the pass-through entity and provided to the Department upon request."