Question

PA, IA, CA Taxes - Do I need to file if received K-1, but had only business loss - no taxable income

Forum|Forum|3 years ago
April 4, 2023
1 reply
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Hi,

I inherited partnerships in IA, CA, and PA. I received for each one a respective state K-1. each business residing in one of those states.

However, for all three businesses I received no income and only have minor reported losses (in two, approx $-150, and in CA $-1750). Do I have to file state taxes in in each of these states? Given the losses, I have no taxable income.

Thanks,

Gary

E

ErnieS0

It depends on your other income.

California. California nonresidents are required to file a return if their total adjusted gross income or California adjusted gross income exceeds certain amounts. With a loss, you may be required to file but there would be no penalty for not filing because all penalties and interest are based on unpaid tax.

However, you can’t claim a state net operating loss if you don’t file. An NOL will offset profit in future years.

Iowa. You don’t have to file if your net income from Iowa sources is less than $1,000. Like California, you may want to file to preserve a net operating loss.

See Part-year resident and nonresident

Pennsylvania. You do not have to file a return. PA does not allow for carryforwards or carrybacks. You simply lose the loss if you can’t claim it in the current year.

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