Idaho State Tax Commission

Idaho State Tax Commission

Sourcing for Guaranteed Payments

The reporting of Guaranteed Payments for tax year 2013 is significantly different due to legislative changes.

Sourcing for Guaranteed Payments

Tax Years 2012 and Prior
All guaranteed payments paid by the partnership to its partners are treated as part of net distributable income, except for guaranteed payments to a retired partner that are sourced to the recipient’s home state per U. S. Code (Title 4, Section 114(b)(1)(I)). Report the payments on Form 65, line 15.

Tax Year 2013
Partnership income of nonresidents and part-year residents, including guaranteed payments according to IRC section 707, will be sourced to Idaho based on the Idaho apportionment factor, except for guaranteed payments to a retired partner that are sourced to the recipient’s home state per U. S. Code (Title 4, Section 114(b)(1)(I)). Also excluded are guaranteed payments to an individual partner of up to $250,000; these payments will be sourced as compensation for services. Any amount over $250,000 will be sourced to Idaho based on the Idaho apportionment factor. The $250,000 threshold will be adjusted annually for inflation in future years.
 

Posted 08-13-2013

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