Idaho State Tax Commission

Idaho State Tax Commission

Guaranteed Payments Guidance

For tax years beginning on or after January 1, 2013, guaranteed payments of up to $250,000* in any calendar year to an individual partner are sourced as compensation for services and are sourced to the state where the services are performed. Any amount that exceeds $250,000* is sourced to Idaho based on the partnership's Idaho apportionment factor. All compensation paid to a retired partner is sourced to the partner's state of domicile.

For the entity, the total amount of guaranteed payments is reported on Form 65, line 15, as other items. Amounts up to $250,000* paid to an individual that are sourced as compensation for services performed outside Idaho and all payments made to retired partners are reported on Form 65, line 31, as other subtractions. Amounts paid to individuals who are Idaho residents are included in apportionable income (not listed on Form 65, line 31, as an other subtraction) and reported on Form 65, line 38. Guaranteed payments to an entity are not subtracted on Form 65, line 31, and are included in the entity's apportionable income. An explanation for both lines 15 and 31 should be included with the return

Guaranteed payments that are sourced as compensation for services performed in Idaho to an individual who is not an Idaho resident are subtracted on Form 65, line 31 and re-entered as allocated income on Form 65, line 37.

The total guaranteed payment information is shown on Form ID K-1, Part B, Supplemental Information. The information should show that the first $250,000* is sourced as compensation for services and is sourced to the state where the services are performed. Any amount that exceeds $250,000* is reported as Idaho source income based on the partnership's Idaho apportionment factor.

Example: A Utah partner receives a guaranteed payment of $300,000 for services performed in Utah. The partnership reported an Idaho apportionment factor of 75%. The first $250,000* is sourced to Utah as compensation, and $37,500 of the remaining $50,000 is sourced to Idaho ($50,000 x 75% Idaho apportionment factor).

On Idaho Form PTE-12, the entity reports only the amount that exceeds $250,000* apportioned to Idaho, unless the first $250,000* is sourced as compensation to Idaho.

*Threshold amount changes each year

Tax yearAmount
2017$257,500
2016$254,250
2015$254,000
2014$250,000
2013$250,000

Reporting requirements flowchart

The following flowchart explains this process.

More guaranteed payments information

Page last updated February 15, 2018. Last full review of page: June 2, 2014.

This information is for general guidance only. Tax laws are complex and change regularly. We can't cover every circumstance in our guides. This guidance may not apply to your situation. Please contact us with any questions. We work to provide current and accurate information. But some information could have technical inaccuracies or typographical errors. If there's a conflict between current tax law and this information, current tax law will govern.