North Dakota Form 58 Partnership Income Tax Booklet

Form 58 Partnership Income Tax Booklet
Partnership Income Tax Instruction Booklet
TAX.ND.GOV

2023

NORTH DAKOTA

PARTNERSHIP
INCOME TAX
INCLUDES
SCHEDULE FACT
SCHEDULE K
SCHEDULE KP
SCHEDULE K-1
Email Questions to: [email protected]

Contents
Where to get help and forms......................................................... This page
Changes for 2023....................................................................................1
General instructions.................................................................................2
	 Who must file......................................................................................2
	 When and where to file.........................................................................2
	 Extension of time to file........................................................................2
	 Penalty and interest.............................................................................2

Need help?
You can download forms and find other
information on our website at:
tax.nd.gov

Email
Individual, estate, trust, partnership,
and S corporation income tax—
	 [email protected]

	 Estimated tax payment (for 2024).........................................................3

Call

	 Withholding from nonresident partners...................................................3

Individual income tax—
	 Questions	
701-328-1247
	Forms	
701-328-1243

	 Composite filing...................................................................................3
	 Correcting a previously filed return.........................................................4
	 Reporting federal changes.....................................................................4
	 W-2/1099 reporting requirement...........................................................4
	 Disclosure notification..........................................................................4
	 Use of information...............................................................................4
General instructions for completing Form 58...............................................4
Specific line instructions...........................................................................5
	 Form 58, Page 1, Items A-J...................................................................5
	 Schedule FACT....................................................................................5
	 Schedule K.........................................................................................6
	 Schedule KP...................................................................................... 10
	 Form 58, Page 1, Lines 1-12................................................................ 12
	 Schedule K-1..................................................................................... 13
	 Before you file Form 58...................................................................... 14

Required forms

The following forms are needed to complete Form 58:
	
Form 58	
	
Schedule
	
Schedule
		
	
Schedule
	
Schedule

Partnership return
FACT	 Calculation of North Dakota apportionment factor
K	
Total North Dakota adjustments, credits, and other
items distributable to partners
KP	
Partner information
K-1	
Partner’s share of North Dakota income (loss), deductions, 	
adjustments, credits, and other items

Partnership income tax—
	 Questions	
701-328-1258
	Forms	
701-328-1243
Speech/hearing impaired
	TDD	800-366-6888

Write

Office of State Tax Commissioner
600 E. Boulevard Ave., Dept. 127
Bismarck, ND 58505-0599

Walk-in or appointment
service

State Capitol Building, 8th Floor
600 E. Boulevard Ave., Bismarck, ND
Monday through Friday
8:00 a.m. to 5:00 p.m.
(except holidays)
Walk-ins are welcome. To assure
availability and promptness of
service, call in advance to make an
appointment.

The following forms may be needed:
	
	
	

Form 58-PV	
Form 58-EXT	
Form 101	

	
Form PWA	
	
Form PWE	
		

Partnership return payment voucher
Partnership extension payment voucher
Application for extension of time to file a North Dakota	
income tax return
Passthrough entity withholding adjustment
Nonresident passthrough entity member exemption and
certification

Download these forms from our website at tax.nd.gov.

Taxpayer Bill of Rights
Obtain a copy of the North Dakota Taxpayer Bill of Rights on the
Office of State Tax Commissioner’s website at
tax.nd.gov

Privacy Act Notification

In compliance with the Privacy Act of
1974, disclosure of a Federal Employer
Identification Number (FEIN) or social
security number on this form is required under
N.D.C.C. §§ 57‑01-15 and 57-38-42, and will
be used for tax reporting, identification, and
administration of North Dakota tax laws.
Disclosure is mandatory. Failure to provide
the FEIN or social security number may
delay or prevent the processing of this form.

1

Changes affecting partnerships

Developments, updates, and items of interest relating to partnership income tax
REMINDER - Electronic Filing
Partnerships with 10 or more owners
are required to file the North Dakota
income tax return and pay any tax
due on it by electronic means. If a
partnership return with 10 or more
owners is filed on paper, the return
will not be processed and may be
subject to penalties due to the failure
to file electronically.
NEW - North Dakota passthrough
withholding
Income tax rates were lowered
effective with the 2023 tax year. The
highest rate was lowered to 2.50%.
The income tax withholding rate on
nonresident owners of passthrough
entities also was lowered and is
reflected on the 2023 income tax
forms and instructions.
NEW - Contributions to maternity
home, child placing agency, or
pregnancy help center
An income tax credit is allowed
for contributions to a child placing
agency licensed by the North Dakota
Department of Health and Human
Services (DHS), a nonprofit maternity
home located in North Dakota, or a
pregnancy help center recognized by
DHS.
The credit is equal to 100% of the
contribution. The credit is limited to
50% of a taxpayer’s tax liability. Any
credit earned in excess of the limit may
not be carried forward or back to other
tax years.
The credit is available to corporations,
individuals, estates, trusts, and
passthrough entities.
A tax credit earned by a passthrough
entity is passed through and allowed
to each owner in proportion to their
respective interests in the passthrough
entity.
NEW – Tax credit for compensation
paid to an apprentice
An income tax credit was created
for the employment of a qualified
apprentice in an apprenticeship
program position in North Dakota.

The apprentice must be in an
apprenticeship program certified by
the U.S. Department of Labor or be an
electrical apprentice registered under
North Dakota law.
The credit is equal to 10% of the
stipend or salary paid to the qualified
apprentice. The maximum credit a
taxpayer can claim over all tax years
is $3,000 and limits the earning of a
tax credit to only five apprentices at
the same time. Any credit earned in
excess of the limit may not be carried
forward or back to other tax years.
The credit is available to corporations,
individuals, estates, trusts, and
passthrough entities. A tax credit
earned by a passthrough entity is
passed through and allowed to each
owner in proportion to their respective
interests in the passthrough entity.
UPDATE – Renaissance Zone
tax incentive changes effective
August 1, 2023
A variety of changes occurred to
the Renaissance Zone program.
One of the changes is the maximum
length of an income tax incentive
was changed from five years to
eight years for a project that meets
certain rehabilitation thresholds.
Specifically, for residential (except
owner occupied) and commercial
property, a rehabilitation level
exceeding 75% is required to allow
for an exemption up to eight years.
Rehabilitation exceeding 50% is
required for an exemption up to five
years. For owner occupied residential
property, rehabilitation exceeding
20% may qualify for an exemption up
to eight years.
For additional RZ information, please
refer to our website:
www.tax.nd.gov/renaissancezone-incentives.
UPDATE – Automation tax credit
The 2023 North Dakota Legislature
made changes to the existing
automation tax credit program. The
program was expanded to include
automation or robotic equipment
purchased to upgrade or advance an
animal agricultural process.

The tax rate was changed from up
to 20% to now be 15% of the cost
of the qualifying equipment. The
annual maximum statewide tax credits
authorized was increased from $1
million to $3 million per year. Of the
$3 million annual total tax amount,
$500,000 of tax credits is reserved
each year for first-time claimants for
automation equipment and $500,000
of tax credits is reserved each year
for first-time claimants for animal
agriculture equipment.
The program was also made
permanent.Other provisions were
unchanged.
The changes are applicable for
purchases during calendar year 2023,
for which applications would be due
to the North Dakota Department of
Commerce by January 31, 2024. The
requirement continues to exist for
a claimant to subsequently file with
the Office of State Tax Commissioner
a report of Improved Job Quality or
Increased Productivity.
UPDATE - Disabled employment
tax credit
In 2023, the North Dakota Legislature
reenacted and made permanent the
existing income tax credit related to
the employment of an individual with
developmental disabilities or severe
mental illness. The existing provisions
of the tax credit were unchanged,
except the statewide limitation on
the number of eligible employees was
removed and there is no limit.
Stay informed of developments
Individuals, businesses, or other
interested persons may sign up to
receive email notifications when
a newsletter or other important
information is issued by the Office of
State Tax Commissioner. To sign up,
go to tax.nd.gov and select “News
Center” at the top of the page. Then
select “Email Sign-Up”.

2

Form 58 Instructions	

2023

North Dakota Partnership Income Tax Return
“N.D.C.C.” references are to the North Dakota Century Code, which contains North Dakota’s statutes.
“N.D. Admin. Code” references are to the North Dakota Administrative Code, which contains North Dakota’s rules.

General
instructions
Who must file

A 2023 Form 58, Partnership Income
Tax Return, must be filed by a
partnership that meets both of the
following:
	 •	 It is required to file a 2023
Form 1065, U.S. Return of
Partnership Income.
	 •	 It carries on business, or derives
gross income from sources, in
North Dakota during the 2023 tax
year.
Investment partnership. A
partnership that elects out of the
partnership rules under I.R.C.
§ 761(a)(1) and does not file a federal
partnership return must file a 2023
Form 58 if it carries on investment
activity, or derives any gross income
from sources, in North Dakota during
its 2023 tax year. A 2023 Form 1065
must be completed on a pro forma
basis and attached to Form 58.
Limited liability company (LLC). An
LLC that is classified as a partnership
for federal income tax purposes is
treated like a partnership for
North Dakota income tax purposes
and must file Form 58 if it meets the
above conditions for filing.
Nonfiler penalty. If a partnership
does not file Form 58 as required,
a minimum $500 penalty may be
assessed if the failure continues after
receiving a 30-day notice to file from
the Office of State Tax Commissioner.
Disaster recovery tax exemptions.
Exemptions from state and local tax
filing and payment obligations are
available to out-of-state businesses
and their employees who are in
North Dakota on a temporary basis
for the sole purpose of repairing
or replacing natural gas, electrical,
or telecommunication transmission
property that is damaged, or under
threat of damage, from a state- or
presidentially-declared disaster or
emergency. For more information, go
to tax.nd.gov.

When and where to file

North Dakota extension. If a
federal extension is not obtained,
but additional time is needed to
complete and file Form 58, a separate
North Dakota extension may be
applied for by filing Form 101,
Application for Extension of Time to
File a North Dakota Tax Return. This
is not an automatic extension—there
must be good cause to request a
North Dakota extension. Form 101
must be postmarked on or before the
due date of Form 58. Notification of
whether the extension is accepted or
rejected will be provided by the
Office of State Tax Commissioner.

Note: Use the 2022 Form 58 if filing
for a fiscal year beginning in the 2022
calendar year.

Extension interest. If Form 58 is
filed on or before the extended due
date, and the total amount of tax due
is paid with the return, no penalty will
be charged. Interest on the tax due will
be charged at the rate of 12% per year
from the original due date of the return
to the earlier of the date the return is
filed or the extended due date.

REMINDER: Electronic filing
Partnerships with 10 or more owners
are required to file the North Dakota
income tax return and pay any tax
due on it by electronic means.

The 2023 Form 58 must be filed on
or before (1) April 15, 2024, if filing
for the 2022 calendar year, or (2) the
15th day of the fourth month following
the end of the tax year, if filing for
a fiscal year beginning in the 2023
calendar year. If the due date falls
on a Saturday, Sunday, or holiday,
the return may be filed on or before
the next day that is not a Saturday,
Sunday, or holiday.

If not required to file
electronically, mail Form 58 and all
required attachments to:
Office of State Tax Commissioner
600 East Boulevard Ave., Dept. 127
Bismarck, ND 58505-0599

Extension of time to file

An extension of time to file Form 58
may be obtained in one of the
following ways:
	•	 Obtain a federal extension.
	•	 Separately apply for a
North Dakota extension.
Federal extension. If an extension
of time to file the federal partnership
return is obtained, it is automatically
accepted as an extension of time to
file Form 58. If this applies, a separate
North Dakota extension does not have
to be applied for, nor does the
Office of State Tax Commissioner have
to be notified that a federal extension
has been obtained prior to filing
Form 58. The extended due date for
North Dakota purposes is the same as
the federal extended due date.

Prepayment of tax due. If an
extension of time to file Form 58 is
obtained, any tax expected to be due
may be paid on or before the regular
due date to avoid paying extension
interest. For more information,
including payment options, obtain the
2023 Form 58‑EXT.
Alternatively, a check or money
order may be sent with a letter
containing the following: (1) name of
partnership, (2) partnership’s FEIN,
(3) partnership’s address and phone
number, and (4) statement that the
payment is a 2023 Form 58-EXT
payment.

Penalty and interest

If an extension of time to file
Form 58 was obtained, the tax
due may be paid by the extended
due date of the return without
penalty, but extension interest will
apply—see “Extension interest” and
“Prepayment of tax due” on this page.

3
If Form 58 is filed by its due date (or
extended due date), but the total
amount of tax due is not paid by the
due date (or extended due date), a
penalty equal to 5% of the unpaid tax
or $5.00, whichever is greater, must
be paid.
If Form 58 is filed after its due date
(or extended due date), and there
is an unpaid tax due on it, a penalty
equal to 5% of the unpaid tax due or
$5.00, whichever is greater, for the
month the return was due plus 5% of
the unpaid tax due for each additional
month (or fraction of a month) during
which the return remains delinquent
must be paid. This penalty may not
exceed 25% of the tax due.
In addition to any penalty, interest
must be paid at the rate of 1% per
month or fraction of a month, except
for the month in which the tax was
due, on any tax due that remains
unpaid after the return’s due date (or
extended due date).

Estimated tax payment
(for 2024)

A partnership may, but is not required
to, make estimated income tax
payments. For more information,
including payment options, obtain the
2024 Form 58-ES.

Withholding from
nonresident partners

A partnership must withhold
North Dakota income tax at the rate of
2.50% from the year-end distributive
share of North Dakota income of a
nonresident partner. See “Publicly
traded partnership” on this page for
an exception to this requirement.

Exemption from withholding. No
withholding is required if any of the
following apply:
	•	 The distributive share of
North Dakota income is less
than $1,000.
	•	 The nonresident partner elects to
include the distributive share in a
composite filing—see “Composite
filing” on this page.
	•	 The nonresident partner is a
passthrough entity and elects
exemption from withholding on its
distributive share of North Dakota
income. For more information,
obtain Form PWE.
Withholding procedure. This
withholding requirement applies to
a nonresident partner’s year-end
distributive share of North Dakota
income, which is determined at the
end of the partnership’s tax year and
reported on Form 58, Schedule KP,
Column 6. The requirement does
not apply to actual distributions
made to a nonresident partner
during the tax year. The withholding
amount is calculated and reported
on Schedule KP, Column 7. If a
nonresident partner meets certain
conditions, an amount less than the
amount calculated at the 2.50%
tax rate may be withheld. For the
qualifying conditions, see Form PWA.
A partnership must submit a payment
for the total amount of withholding
reported on Schedule KP, Column 7,
with Form 58 when it is filed.

distributive share of North Dakota
income and pays the tax with
Form 58. The tax is calculated at
the highest individual income tax
rate (which is 2.50% for the 2023
tax year), and no adjustments,
deductions, or tax credits are allowed
in calculating the tax. A composite
filing satisfies the North Dakota
income tax filing and payment
obligations of the eligible nonresident
partners included in it, which means
they do not have to separately file
their own North Dakota income tax
returns. The composite filing method
is optional and does not require prior
approval from the Office of State Tax
Commissioner, and a choice to use it
may be made on a year-to-year basis.
Eligible nonresident partner. For
purposes of this composite filing
method, a nonresident partner
has the same meaning as that
used for withholding income tax
from nonresident partners—see
“Withholding from nonresident
partners” on this page. A nonresident
partner is eligible to be included in a
composite filing if both of the following
apply:
	•	 The nonresident partner’s
only source of income within
North Dakota is one or more
passthrough entities. A
passthrough entity includes a trust,
partnership, S corporation, LLC
treated like a partnership or
S corporation, and any other
similar entity.

Nonresident partner. For purposes
of this withholding requirement, a
nonresident partner means:

Publicly traded partnership.
A publicly traded partnership, as
defined under Internal Revenue Code
§ 7704(b), does not have to withhold
North Dakota income tax from its
unitholders if it meets both of the
following:

	•	 an individual who is not domiciled
in North Dakota;

	•	 It is treated as a partnership for
federal income tax purposes.

	•	 The nonresident partner elects
to be included in a composite
filing. An election is indicated by
the partnership’s calculation and
reporting of a tax amount for the
nonresident partner on Form 58,
Schedule KP, Column 8. (If the
distributive share is a loss, the tax
is zero.)

	•	 It reports on Form 58,
Schedule KP, every unitholder with
a North Dakota distributive share
of income of over $500.

The distributive share of North Dakota
income included in a composite return
is subject to tax even if it is under
$1,000.

	•	 a trust, including a grantor trust,
that is not organized under
North Dakota law. This only
includes trusts that are subject to
income tax; or
	•	 a passthrough entity that has a
commercial domicile outside North
Dakota. A passthrough entity
includes a partnership,
S corporation, LLC treated like a
partnership or S corporation, and
any other similar entity.

Composite filing

A composite filing method is available
to a partnership with one or more
eligible nonresident partners. Under
this method, a partnership calculates
the North Dakota income tax on an
eligible nonresident partner’s year‑end

Composite filing method
procedure. The tax under the
composite filing method is calculated
and reported on Form 58, Schedule KP,
Column 8. A partnership must submit
a payment for the total tax reported on
Schedule KP, Column 8, with Form 58
when it is filed.

4
Correcting a previously filed
return
If a partnership needs to correct an
error on Form 58 after it is filed, the
partnership must file an amended
return. There is no special form for
this purpose. See “How to prepare an
amended 2023 return” below.

If a partnership paid too much tax
because of an error on its 2023
Form 58, the partnership generally
has three years from the due date of
the return (excluding extensions) or
the date the return was actually filed,
whichever is later, in which to file an
amended return to claim a refund of
the overpayment. See N.D.C.C.
§ 57-38-40 for other time periods that
may apply.
How to prepare an amended 2023
return
	 1.	 Obtain a blank 2023 Form 58.
	 2.	 Enter the partnership’s name,
current address, FEIN, etc., in the
top portion of page 1 of Form 58.
	 3.	 Fill in the “Amended return” circle
at the top of page 1 of Form 58.
	 4.	 Complete Schedules FACT,
K, and KP using the corrected
information. However, unless
there is an increase in the
amount reported on Schedule KP,
Column 6, of the amended return,
enter on Schedule KP, Column 7,
the same amount reported on
the previously filed return. Then
complete lines 1 through 3 on
page 1 of Form 58.
	 5.	 On line 5 of one of Form 58,
enter the total taxes due from the
previously filed 2023 Form 58,
page 1, line 3.
	 6.	 Complete line 7 (overpayment)
or line 10 (tax due), whichever
applies. If there is an
overpayment on line 7, enter the
full amount on line 9 (refund). On
an amended return, the amount
credited to the next year’s
estimated tax (line 8) may not be
increased or decreased.

	 7.	 Attach a statement explaining the
reason(s) for filing the amended
return. If it is because of changes
the partnership or the IRS made
to the partnership’s 2023 Federal
Form 1065, attach a copy of the
amended federal return or IRS
notice.
	 8.	 Complete and provide a corrected
Schedule K-1 (Form 58) to the
partners, as required.

Reporting federal changes

If the Internal Revenue Service
(IRS) changes or audits the federal
partnership return, or if a partnership
files an amended federal partnership
return, an amended North Dakota
Form 58 must be filed within 90 days
after the final determination of the
IRS changes or the filing of the
amended federal return. Enclose a
copy of the IRS audit report or the
amended federal partnership return
with the amended North Dakota
Form 58.

W-2/1099 reporting
requirement

Every partnership doing business in
North Dakota that is required to file
Federal Form 1099 or W-2 must also
file one with the Office of State Tax
Commissioner. For more information,
obtain the guideline Income Tax
Withholding and see “Annual Filing
Requirements - W-2 and 1099.”

Disclosure notification

Upon written request from the
chairman of a North Dakota legislative
standing committee or Legislative
Management, the law requires the
Office of State Tax Commissioner to
disclose the amount of any deduction
or credit claimed on a tax return.
Any other confidential information,
such as a taxpayer’s name or federal
employer identification number, may
not be disclosed.

Use of information

All of the information on Form 58 and
its attachments is confidential by law
and cannot be given to others except
as provided by state law. Information
about the partners is required under
state law so the Office of State
Tax Commissioner can determine
the partner’s correct North Dakota
taxable income and verify if the
partner has filed a return and paid the
tax.

General instructions
for completing
Form 58
Complete Federal
Form 1065 as follows:
	 1.	 Complete Federal Form 1065 (or
1065-B) in its entirety.
	 2.	 Complete Items A through J at
the top of page 1 of
Form 58—see page 5.
	 3.	 Complete Schedule FACT on
page 2 of Form 58—see page 5.
	 4.	 Complete Schedule K on page 3
of Form 58—see page 7.
	 5.	 Complete Schedule KP on
page 5 of Form 58—see page 10.
	 6.	 Complete lines 1 through 12 on
page 1 of Form 58—see page 12.
	 7.	 Complete Schedule K-1, if
required, for the partners—see
page 13.
Rounding of numbers. Numbers
may be entered on the return in
dollars and cents, or they may be
rounded to the nearest whole dollar. If
rounding, drop the cents if less than
$0.50 and round up to the next whole
dollar amount if $0.50 or higher. For
example, $25.36 becomes $25.00,
and $25.50 becomes $26.00.
Fiscal year filers. The tax year for
North Dakota income tax purposes
must be the same as the tax
year used for federal income tax
purposes. Use the 2022 Form 58 if
the partnership’s taxable year began
in the 2022 calendar year. Note: Use
the 2021 Form 58 if the taxable year
began in the 2021 calendar year.

5

Specific line
instructions for
page 1 of
Form 58, Items A-J
Complete Items A through J at
the top of page 1 of Form 58.
Then complete Schedule FACT,
Schedule K, and Schedule KP
before completing lines 1
through 12 on page 1 of Form 58.
Item A - Tax year
The same tax year used for federal
income tax purposes (as indicated on
the federal partnership return) must
be used for North Dakota income
tax purposes. Fill in the applicable
circle. If the partnership uses a fiscal
year, enter the beginning and ending
dates of the fiscal year. Use the 2023
Form 58 only if the partnership’s tax
year began in the 2023 calendar year.
Item B - Name and address
Enter the legal name of the partnership
on the first line of the name and
address area. If the partnership
publicly operates under a fictitious or
assumed name (which, in most states,
must be recorded or registered with
the state), enter that name on the
second line of the name and address
area. If filing an amended return, enter
the most current address.
Item C - Federal EIN
North Dakota uses the federal
employer identification number
(FEIN) for identification purposes.
Enter the FEIN from page 1 of Federal
Form 1065.
Item D - Business code number
Enter the business code number from
the NAICS code list found on the
Office of State Tax Commissioner’s
website at tax.nd.gov. Enter the
code that most closely describes the
industry in which the partnership
derives most of its income.
Item E - Date business started
Enter the date the business started
from page 1 of Federal Form 1065.
Item F - Indicators
Fill in applicable circles, as follows:
Initial return. Fill in circle if this is
the first return filed in North Dakota
by the partnership.
Final return. Fill in circle if this is the
last return to be filed in North Dakota
by this partnership.

Farming/ranching partnership.
Fill in circle if this is an LLC that is
registered as a farming and ranching
LLC with the North Dakota Secretary
of State.
Filed by an LLC. Fill in circle if the
entity filing this return is an LLC.
Composite return. Fill in this circle
only if (1) the partnership has one or
more nonresident partners eligible to
be included in a composite filing and
(2) all of them elected to include their
distributive shares of North Dakota
source income in a composite filing.
See “Composite filing” on page 3 for
more information.
Amended return. Fill in circle if
this return is being filed to correct a
previously filed 2023 Form 58. See
“Correcting a previously filed return”
on page 3 for more information.
Extension. Fill in circle if a federal
or state extension of time to file the
return was obtained. See “Extension
of time to file” on page 2 for more
information.
Item G - Number of partners
Enter the total number of partners
and the number of each type of
partner.
Item H - Professional service
partnership
Indicate whether the partnership is
a professional service partnership.
A “professional service partnership”
is a partnership that engages in the
practice of law, accounting, medicine,
or any other profession in which the
capital or the services of employees
are not a material income-producing
factor. The services performed by
the partners themselves must be the
primary income-producing factor. A
professional service partnership does
not include one that primarily engages
in wholesale or retail sales activity,
manufacturing activity, or any other
type of activity in which the capital
or the services of employees are a
material income-producing factor.
Item I - Publicly traded
partnership
Indicate whether the partnership is a
publicly traded partnership. A “publicly
traded partnership” is a partnership in
which interests in it are either traded
on an established securities market
or are readily tradable on a secondary
market.

Item J
Tiered partnership
Indicate whether the partnership
holds an interest in one or more
other partnerships or limited liability
companies. If it does, attach a
statement to Form 58 showing
the name and federal employer
identification number of each
partnership or LLC in which it holds an
interest.

Instructions for
Schedule FACT
(Form 58, page 2)
General instructions

All partnerships must complete the
applicable portions of Schedule FACT.
If the partnership has ONLY individual,
estate, and trust partners, complete
Schedule FACT as follows:
	•	 100% North Dakota
partnership
		 If the partnership conducted all of
its business within North Dakota
during the tax year, skip lines 1
through 13 and enter “1.000000”
on line 14.
	•	 Multistate partnership
		 If the partnership conducted its
trade or business both within
and without North Dakota during
the tax year, complete lines
1 through 14. However, if all
of the partners consist of only
North Dakota resident individuals,
estates, and trusts, skip lines 1
through 13 and enter “1.000000”
on line 14.
If the partnership has a partner
OTHER THAN an individual, estate,
or trust, complete lines 1 through 14
of Schedule FACT.

Apportionment factor in
general

In general, the apportionment factor
is a product of a formula consisting of
an equally-weighted average of three
factors: property, payroll, and sales.
Each factor represents the percentage
of the partnership’s North Dakota
activity compared to its total
activity everywhere. A partnership
multiplies its business income by the
apportionment factor to determine
the portion of its business income
attributable to North Dakota.

6
If the partnership includes the
distributable share of income
from another partnership in its
apportionable business income, include
in the numerator and denominator
of each factor the partnership’s
proportionate share of the other
partnership’s apportionment factors—
see the specific line instructions for
more information. Do not include in
the factors any property, payroll, or
sales related to allocable nonbusiness
income—see the instructions to
Form 58, Schedule K, line 24, for what
constitutes allocable nonbusiness
income.
If the amount of any factor’s
denominator is zero, exclude that
factor from the calculation.
Special apportionment rules
may apply in the case of certain
industries or unique circumstances.
For additional information on the
apportionment factor, see N.D.C.C.
Ch. 57-38.1 and N.D. Admin. Code
Ch. 81-03-09.

Specific line instructions
Property factor
Lines 1 through 6
Owned and rented property
Enter on the applicable line the
average value of real and tangible
personal property owned and rented
by the partnership. For owned
property, this generally means the
average of the original cost (before
depreciation) used for federal income
tax purposes. For rented property,
this generally means the amount of
rent paid multiplied by eight. Certain
property items are subject to special
rules. Do not include amounts related
to construction in progress. Include on
line 5 the partnership’s share of the
property factor from a North Dakota
Schedule K-1 (Form 58), Part 6.
The average value of owned and
rented property is assigned to North
Dakota if the property is located
in North Dakota. The amount
attributable to mobile property is
generally assignable to North Dakota
based on a ratio of the property’s
time spent in North Dakota. For more
complete information on the property
factor, see N.D. Admin. Code
§§ 81-03-09-15 through 81-03-09-21
and 81-03-09-33.

Payroll factor
Line 8
Enter the amount of total
compensation paid to employees
for the tax year. This includes gross
wages, salaries, commissions, and
any other form of remuneration paid
to the employees. Use the amount
before deductions for deferred
compensation, flexible spending plans,
and other payroll deductions. Do not
include amounts paid for employee
benefit plans that are not considered
taxable wages to the employee. An
employee is an individual treated as
an employee under the usual common
law rules, which generally mirror an
individual’s status for purposes of
unemployment compensation and the
Federal Insurance Contribution Act.
Do not include on this line guaranteed
payments to partners.
Compensation of an employee’s
services performed entirely within
North Dakota is assigned to
North Dakota. For an employee whose
services are performed in more than
one state, compensation is generally
assigned to North Dakota based on
the amount of compensation reported
to North Dakota for unemployment
compensation purposes. Whether
or not state income tax was
withheld from an employee’s
compensation does not affect where
the compensation is assigned for
apportionment factor purposes.
Include on this line in the applicable
column the partnership’s share of the
payroll factor from a North Dakota
Schedule K-1 (Form 58), Part 6. For
more complete information on
the payroll factor, see N.D. Admin.
Code §§ 81‑03-09-22 through
81-03-09-25.
Sales Factor
Line 9
Everywhere sales
Enter the partnership’s total
sales or receipts, less returns or
allowances, for the tax year. Sales
generally means all gross receipts
of a partnership. However, the types
of sales or gross receipts included
in the sales factor depend on the
nature of the partnership’s regular
business activities and may include
amounts other than sales reported
on Form 1065, line 1. Include on this
line the partnership’s share of the
everywhere sales from a North Dakota
Schedule K-1 (Form 58), Part 6.

Line 10
North Dakota sales
For sales of tangible property, the
sale is assigned to North Dakota if the
destination of the property is in
North Dakota, regardless of the
shipping terms. For sales of other
than tangible property, the sale
is assigned to North Dakota if the
income-producing activity which gave
rise to the receipt is performed in
North Dakota. Include on this line
the partnership’s share of the North
Dakota sales from a North Dakota
Schedule K-1 (Form 58), Part 6. For
more complete information, see N.D.
Admin. Code §§ 81‑03‑09-26 through
81-03-09-31 and 81-03-09-34.
Line 11
Throwback sales
Enter the amount of sales shipped
from a location in North Dakota that
are delivered to the U.S. government
or to another state or country
where the sales are not subject to
a tax measured by income in that
jurisdiction. For more complete
information, see N.D. Admin. Code
§§ 81-03-09-29 and 81-03-09-30.
Line 14
Apportionment factor
Divide line 13 by the number of
factors having an amount greater than
zero in column 1 on lines 7, 8, and 12.
Enter the result on this line.

Instructions for
Schedule K
(Form 58, page 3)

All partnerships must complete
Schedule K. The purpose of this
schedule is to show the total amount
of North Dakota adjustments, credits,
and other items distributable to
its partners. These items may be
applicable to the preparation of the
partners’ North Dakota income tax
returns.
Schedule K-1 from another
passthrough entity.
Include on the applicable lines
of Schedule K any adjustments,
credits, etc., from a North Dakota
Schedule K-1, as instructed in the
partner or beneficiary instructions to
that form.
Reminder: Be sure to attach to
Form 58 any prescribed schedule or
other supporting document specified
in the instructions.

7
Property tax clearance
North Dakota Century Code
§ 57-01-15.1 provides that, before
certain state tax incentives may be
claimed, a taxpayer must obtain a
property tax clearance record from
each North Dakota county in which
the taxpayer holds a 50% or more
ownership interest in real property.
The property tax clearance record(s)
must be attached to the North Dakota
tax return on which the incentive is
claimed. Certain tax incentives on
Form 58, Schedule K, are subject
to this requirement. The incentives
subject to this requirement are
identified in the box at the top of
Schedule K.
If the partnership is claiming any
of the specified incentives, it must
complete the property tax clearance
section at the top of Schedule K. If
the partnership is required to attach
a property tax clearance record,
obtain one by completing the form
Property Tax Clearance Record, which
is available on the Office of State Tax
Commissioner’s website.
Line 1
Income from state, local, and
foreign securities and bonds
Enter on this line interest and
dividend income from state, local,
and foreign securities and bonds that
is exempt from federal income tax.
Do not include interest income from
securities or bonds issued by
North Dakota or its political
subdivisions. Do not enter on this
line any income that is treated
as nonbusiness income subject
to allocation under N.D.C.C.
§§ 57‑38.1‑04 through 57‑38.1-08.
Include the nonbusiness income on
Schedule K, line 24.
Line 2
State and local income taxes
Enter on this line the taxes measured
by income that were incurred by
the partnership and deducted in
calculating the partnership’s ordinary
income (loss). Include franchise or
privilege taxes measured by income
paid to any taxing authority, including
a foreign country.
Line 3
Interest from U.S. obligations
Enter on this line interest income from
U.S. obligations and from securities
the interest from which is specifically
exempted from state income tax by

federal statute. Include the portion of
dividend income from a mutual fund
attributable to the fund’s investment
in the same kinds of securities.
Do not enter on this line interest
income from securities of the Federal
Home Loan Mortgage Corporation
(Freddie Mac), Federal National
Mortgage Association (Fannie Mae),
Government National Mortgage
Association (Ginnie Mae), or from
a federal income tax refund or
repurchase agreement. Attach a
statement identifying the specific
securities from which the interest
was derived.
Line 4
Renaissance zone exemption
Enter on this line the amount from
Schedule RZ, Part 7, line 1c. Attach
Schedule RZ.
Line 5
New or expanding business
income exemption
If the partnership qualified for the
new or expanding business income
exemption under N.D.C.C.
Ch. 40-57.1, enter the exempt
portion of the partnership’s business
income. See N.D. Admin. Code
§ 81‑03‑01.1‑06 for guidance on
calculating the amount of the exempt
income. Attach a statement
showing the calculation of the
exempt income.
Line 6
Eminent domain gain
Enter on this line the taxable portion
of a gain from the disposition of
property due to the exercise of
eminent domain.
Line 7a
Renaissance zone historic
property preservation tax credit
Enter on this line the amount from
Schedule RZ, Part 7, line 4. Attach
Schedule RZ.
Line 7b
Renaissance fund organization
investment tax credit
Enter on this line the amount from
Schedule RZ, Part 7, line 5. Attach
Schedule RZ.
Line 7c
Renaissance zone nonparticipating
property owner tax credit
Enter on this line the amount from
Schedule RZ, Part 7, line 6. Attach
Schedule RZ.

Line 8
Seed capital investment tax credit
If the partnership invested in a
qualified business for purposes of the
seed capital investment tax credit,
multiply the total amount invested
during the 2023 tax year by 45%
and enter the result on this line.
See N.D.C.C. Ch. 57-38.5. Attach a
copy of the Qualified Seed Capital
Business Investment Reporting
Form. Or, if claiming a seed capital
investment credit from a
North Dakota Schedule K-1,
attach a statement identifying the
qualified business in which the
investment was made.
Line 9
Ag commodity investment tax
credit
If the partnership invested in a
qualified business for purposes of the
agricultural commodity processing
facility investment tax credit, multiply
the total amount invested during the
2023 tax year by 30% and enter the
result on this line. The partnership
is allowed no more than $250,000
in total credits for investments
made in tax years 2005 and after.
See N.D.C.C. Ch. 57‑38.6. Attach
a copy of the Ag Commodity
Processing Facility Investment
Reporting Form. Or, if claiming an
agricultural commodity processing
facility investment credit from a
North Dakota Schedule K-1, attach
a statement identifying the facility
in which the investment was
made.
Line 10
Biodiesel or green diesel fuel
blending tax credit
If the partnership is a licensed
supplier of biodiesel or green diesel
fuel, it is allowed a credit equal to
$0.05 per gallon for blending biodiesel
or green diesel fuel having at least
a 5% blend (“B5”) that meets ASTM
specifications. The blending must
be done in North Dakota. For this
purpose, a “supplier” means a person
who distributes the biodiesel or green
diesel fuel from a terminal in
North Dakota. Enter the credit on this
line. See N.D.C.C. § 57‑38-01.22.
Attach a statement showing the
calculation of the credit.

8
Line 11
Biodiesel or green diesel fuel sales
equipment tax credit
If the partnership is a licensed seller
of biodiesel or green diesel fuel, it is
allowed a credit equal to 10% of the
costs to adapt or add equipment to
its North Dakota facility to enable it
to sell diesel fuel having at least a
2% biodiesel or green diesel blend
(“B2”) that meets ASTM specifications.
For this purpose, a “seller” means a
person who acquires the fuel from
a wholesale supplier or distributor
for resale to a consumer at a retail
location. Except for costs incurred
before January 1, 2005, include
eligible costs incurred before the tax
year in which sales of the eligible
biodiesel or green diesel fuel begin.
The credit is allowed in each of five
tax years, starting with the tax year
in which sales of the eligible biodiesel
or green diesel fuel begin. Enter
the credit on this line. See N.D.C.C.
§ 57‑38-01.23. Attach a statement
showing the calculation of the
credit.
Line 12
Employer internship program tax
credit
If the partnership hired an eligible
college student under a qualifying
internship program set up in
North Dakota, it is allowed a credit
equal to 10% of the compensation
paid to the intern. For details,
see N.D.C.C. § 57‑38‑01.24. The
partnership is allowed no more than
$3,000 of credits for all tax years.
Line 12a. Enter the allowable credit
on this line.
Line 12b. Enter the number of
eligible interns employed during the
2023 tax year. Disregard this line
if the credit is from a passthrough
entity.
Line 12c. Enter on this line the
total compensation paid to eligible
interns during the 2023 tax year (as
shown on their 2023 Form W-2s).
Disregard this line if the credit is from
a passthrough entity.
Line 13
Research expense tax credit
A credit is allowed for conducting
qualified research in North Dakota. For
details, see N.D.C.C. § 57-38-30.5.
Enter the allowable credit on this line.
Attach a statement showing the
computation of the base amount
and the credit.

Line 14
Endowment fund tax credit
A tax credit is allowed for making a
contribution to a qualified endowment
fund. For more information,
see Schedule QEC (for filers of
Forms 38, 40, 58, and 60) Attach
Schedule QEC.
Lines 14a and 14b. Enter on these
lines the applicable amounts from
Schedule QEC.
Lines 14c and 14d. Enter on
these lines an endowment fund
credit and the related contribution
amount shown on a North Dakota
Schedule K-1 received from an estate,
trust, partnership, or S corporation.
Line 15
Workforce recruitment tax credit
If the partnership employs
extraordinary recruitment methods
to hire an employee to fill a hardto-fill position in North Dakota, it is
allowed a tax credit equal to 5% of
the compensation paid during the
first 12 months to the employee
hired to fill that position. The credit
may be claimed in the first taxable
year beginning after the employee
completes the first 12 consecutive
months of employment. For details,
see N.D.C.C. § 57‑38-01.25.
Line 15a. Enter the allowable credit
on this line.
Line 15b. Enter the number of
eligible employees whose first 12
months of employment ended during
the partnership’s 2022 tax year.
Line 15c. Enter the total
compensation paid to the eligible
employees’ during their first 12
consecutive months of employment
ending in the partnership’s 2022 tax
year.
Line 16
Credit for wages paid to a
mobilized employee
Enter on this line the amount from
Schedule ME, line 13. N.D.C.C.
§ 57‑38‑31. Attach Schedule ME.
Lines 17 through 19
Nonprofit private school tax
credits
Tax credits are allowed under
N.D.C.C. § 57‑38‑01.7 for making
charitable contributions to qualifying
nonprofit private primary schools,
high schools, and colleges located

in North Dakota. A separate credit
is allowed for each of the three
categories of school—primary school,
high school, and college. For each
category of school, the credit equals
50% of the contributions made to all
eligible schools within the category.
(Note: For a partner other than
another passthrough entity, additional
limitations on the allowable credit
apply at the partner level.) A list of
the eligible schools within each of
the three categories of schools is
provided on page 14.
Election. A partnership may elect, on
a contribution by contribution basis,
to treat a contribution as having been
made during the 2023 tax year if it
is made on or before the due date,
including extensions, for filing the
2023 Form 58. Make the election by
attaching to the return a document
containing the following:
	 1.	 A statement that the election is
being made.
	 2.	 Name of qualifying school.
	 3.	 Date of contribution.
	 4.	 Amount of contribution.
To qualify, a contribution must be
made directly to, or specifically
designated for the exclusive use of, a
qualifying school.
School network or organization.
If a contribution is made payable
to the account or fund of a school
network or organization that governs
or benefits multiple schools, the
contribution will qualify only if the
partnership specifically designates it
for the use of a qualifying school, and
the network or organization separately
accounts for the funds on behalf of
that school. The partnership must
obtain a statement from the network
or organization that identifies the
qualifying school and the amount
contributed to it. If the qualifying
school falls into both the primary and
high school categories, also see the
next paragraph.
Schools in both primary and high
school categories. If a contribution
is made to a qualifying school that
provides education in one or more
grades in both the primary school
category (kindergarten through 8th
grades) and the high school category
(9th through 12th grades), a separate
credit is allowed for the portion of the
contribution designated for use within

9
each school category. The partnership
must obtain a statement from the
qualifying school or the school
network or organization that identifies
the qualifying school and shows
the amount contributed within each
category of school. If the partnership
does not obtain a statement, onehalf of the total contribution will be
deemed to have been made to each
category of school.
Line 17. Enter on this line the
allowable credit for contributions to
qualified nonprofit private primary
schools.
Line 18. Enter on this line the
allowable credit for contributions
to qualified nonprofit private high
schools.
Line 19. Enter on this line the
allowable credit for contributions to
qualified nonprofit private colleges.
Line 20
Angel investor investment credit
Important! This line is only for
credits attributable to investments
made in qualified businesses
by angel funds organized and
certified on or after July 1, 2017.
If a partnership is a member of a
North Dakota angel fund that is
organized and certified on or after
July 1, 2017, a credit is allowed to
the partnership if it participates in
a qualified investment made by the
angel fund in a qualified business.
The angel fund is required to provide
a Participating Angel Investor
Statement to the partnership,
which evidences the partnership’s
investment. For qualified investments
made after June 30, 2017, that fall
into the partnership’s 2023 tax year,
multiply the investment amount
by the applicable credit rate shown
on the statement. If a partnership
participates in more than one qualified
investment during the tax year,
calculate the credit separately for each
Participating Angel Investor Statement
received and add the separately
calculated amounts.
Enter the credit amount on this
line. Do not enter on this line
an angel investor credit from
a North Dakota Schedule K-1.

A partnership is not allowed to
claim an angel investor credit from
another passthrough entity. See
N.D.C.C. § 57‑38‑01.26 (effective
for investments made after June 30,
2017).
Attach a copy of the Participating
Angel Investor Investment
Statement.
Line 21
Automation tax credit
If the partnership qualified for the
automation tax credit under N.D.C.C.
§ 57-38-01.41, enter on this line the
amount of the credit shown on the
credit approval letter issued to the
partnership by the Office of State Tax
Commissioner.
Line 22
Credit for hiring an individual
with a developmental disability or
mental illness
A tax credit is available for employing
an individual with a developmental
disability or mental illness. To
qualify, an employer must apply for
and obtain certification from the
North Dakota Department of Human
Services, Vocational Rehabilitation
Division, that the individual has a
severe disability, is eligible for the
agency’s services, and requires
customized or supported employment
to become employed. The credit is
equal to 25% of the wages paid to the
individual during the tax year, up to a
maximum credit of $1,500 per year.
The credit is allowed for each eligible
individual hired. Attach a copy
of the certification letter from
Human Services.
Line 23
Maternity home, child placing
agency, or pregnancy help center
tax credit
A tax credit is allowed for
contributions to the following
organizations: (1) a child placing
agency licensed by the North Dakota
Department of Health and Human
Services (DHS), (2) a nonprofit
maternity home located in North
Dakota, or (3) a pregnancy help
center recognized by DHS.
The credit is equal to 100% of the
contribution and is limited to 50% of
a taxpayer’s tax liability. Enter on this
line the amount from Schedule MCP,
line 8. Attach Schedule MCP.

The credit is available to corporations,
individuals, estates, trusts, and
passthrough entities. A tax credit
earned by a passthrough entity is
passed through and allowed to each
owner in proportion to their respective
interests in the passthrough entity.
Unused credit: There is no carryover
provision to succeeding tax years.
Line 24
Apprentice tax credit
A tax credit is available for
compensation paid by a partnership
to an apprentice. The credit equals
10% of the stipend or salary paid to
a qualified apprentice employed in
North Dakota. The apprentice must be
in an apprenticeship program certified
by the U.S. Department of Labor or
be an electrical apprentice registered
under North Dakota law. The credit
is allowed for up to five apprentices
employed by the partnership at the
same time.
Lifetime credit limit: A taxpayer is
allowed no more than $3,000 in total
tax credits for eligible wages paid in
all tax years.
Line 24a.
Enter the allowable credit on this line.
Line 24b.
Enter the number of eligible
apprentices employed during the 2023
tax year. Disregard this line if the
credit is from a passthrough entity.
Line 24c.
Enter the total amount of wages,
salaries, or other compensation paid
to eligible apprentices employed
during the 2023 tax year (as shown
on their 2023 Form W-2’s). Disregard
this line if the credit is from a
passthrough entity.
Line 25
Professional service partnership
guaranteed payments
Lines 25a through 25c apply only
if the partnership marked “Yes” to
Item H on page 1 of Form 58. See
the instructions to Form 58, page 1,
Item H, on page 5.
Line 25a. Enter the total guaranteed
payments from Federal Form 1065,
Schedule K, line 4.

10
Line 25b. Enter the portion of the
amount on line 25a that was made to
individual partners as a reasonable
salary for personal services,
regardless of where the services
were performed. Do not include any
guaranteed payments for other than
personal services.
Line 25c. Enter the portion of the
amount on line 25b that was made
to nonresident individual partners for
personal services performed within
North Dakota.
Line 26
Allocable nonbusiness income
Lines 26a and 26b apply only if the
partnership meets all of the following:
	•	 It is a multistate partnership, i.e.,
it carries on its trade or business
activity both within and without
North Dakota.
	•	 It has one or more nonresident
individual, estate, or trust
partners.
	•	 It has allocable nonbusiness
income. Generally, all income
received by a partnership is
considered business income unless
clearly classifiable as nonbusiness
income. The classification of
income by the labels used to
describe it—for example, interest,
dividends, rents, royalties,
operating income, or nonoperating
income—is generally not relevant
in determining whether income is
business or nonbusiness income.
For more information, see N.D.
Admin. Code § 81‑03-09-03.
Nonbusiness income is not
apportioned using the apportionment
factor (from Schedule FACT) but is
allocated within or without North
Dakota as provided under N.D.C.C.
§§ 57-38.1-04 through 57-38.1-08
and N.D. Admin. Code
§ 81-03-09-09. Expenses must be
attributed to the nonbusiness income
in a manner which fairly distributes
all of the partnership’s expenses to its
business and nonbusiness income.
If the partnership has an item of
nonbusiness income subject to
allocation, the partnership must take
this into account when calculating
the North Dakota distributive share
of income or loss reportable on
Schedule KP and Schedule K-1
(Form 58). See the instructions to
Schedule KP, Column 6, on page 10

for more information. In addition to
completing lines 26a and 26b, the
partnership must attach the following
to Form 58:
	•	 A statement on which each item
of nonbusiness income is shown
along with its related expenses.
	•	 A statement explaining the basis
for treating the item of income
as nonbusiness income subject to
allocation.
	•	 If an item of nonbusiness income
is allocated to a state other than
North Dakota, a copy of that other
state’s income tax return must
be attached. If the partnership is
not required to file an income tax
return with the other state, the
partnership must indicate this in
the attached statement.
Line 26a. Enter the total allocable
income (less related expenses)
from all sources within and without
North Dakota.
Line 26b. Enter the portion of the
amount on line 24a that is allocable to
North Dakota.
Line 27
Disposition of I.R.C. Section 179
property
Lines 27a through 27b apply only if
the partnership sold, exchanged, or
disposed of property for which an
I.R.C. Section 179 deduction was
passed through to the partners.
Note: The partnership is required
to report this same information on
a separate statement attached to
Federal Form 1065, Schedule K,
line 20c.
For lines 27a through 27d, multiply
the corresponding combined amount
for all partners as reported on
Federal Form 1065, Schedule K,
line 20c, by the apportionment factor
from Schedule FACT, line 14, and
enter the result. However, if the
property disposed of is treated as a
nonbusiness asset the gain or loss
from which is subject to allocation
under N.D.C.C. §§ 57-38.1-04 through
57-38.1-08, subtract the amounts
for that asset before multiplying by
the apportionment factor. Include the
nonbusiness gain or loss from the
disposition on Form 58, Schedule K,
line 26.

Instructions for
Schedule KP
(Form 58, page 5)

Schedule KP must be completed
to provide information about each
partner. If the partnership has more
than seven partners, complete and
attach additional schedules as needed
to list all partners. If more than one
Schedule KP is needed, complete
lines 1 through 4 on only one of them,
and include the combined amount
for all of the schedules on that one
schedule.

All partners
(Columns 1 through 5)
Columns 1 and 2
Enter the name, mailing address, and
partner’s identifying number as shown
on the partner’s Federal Schedule K-1.
If the partner is a single member
LLC that is a disregarded entity for
federal income tax purposes, enter
the owner’s name, address, and
identifying number.
Column 3
Identify the entity type of the partner
by entering the applicable code letter
as follows:
Entity type	

Code letter

Individual...................... I
C corporation................. C
S corporation................. S
Partnership.................... P
Estate........................... E
Trust............................. T
Exempt organization....... O
Note: A “C corporation” is a
corporation that files Federal
Form 1120; an “S corporation”
is a corporation that files Federal
Form 1120S; and the “Trust” entity
type applies to a trust that files
Federal Form 1041 or, in lieu of
filing Federal Form 1041, elects an
alternative reporting method under
the federal income tax regulations,
and to an IRA (generally filing Federal
Form 990-T to report Unrelated
Business Taxable Income.)

11
If the partner is an LLC that is a
disregarded entity for federal income
tax purposes or a nominee on Federal
Schedule K-1, enter the code letter
for the type of entity of the entity’s
owner. If the LLC is treated like a
C corporation, partnership, or S
corporation, enter the code letter for
that particular entity type.
Column 4
Enter the partner’s ownership
percentage as provided in the
partnership agreement. (This percentage
may differ from the partner’s profit or
loss percentage.)
Column 5
Enter the sum of the following
items from the partner’s Federal
Schedule K‑1 (Form 1065), Part III:
Box 1	

Ordinary business income
(loss)

Box 2	

Net rental real estate income
(loss)

Box 3	

Other net rental income
(loss)

Box 4c	 Total guaranteed payments
Box 5	

Interest income

Box 6a	 Ordinary dividends
Box 7	

Royalties

Box 8	

Net short-term capital gain
(loss)

Box 9a	 Net long-term capital gain
(loss)
Box 10	 Net section 1231 gain (loss)
Box 11	 Other income (loss)
Box 12	 Section 179 deduction
Box 13	 Other deductions (In the case
of an individual, trust, or
estate partner, only include
deductions that are allowed
as a deduction from gross
income in calculating adjusted
gross income for federal
income tax purposes.)
Box 20	 Include the gain (loss)
from an I.R.C. Section 179
property disposition. For
purposes of calculating
the gain or loss, include
all of the Section 179
deduction passed through
to the partner, regardless of
whether or not the partner
actually deducted all of it.

Worksheet for Schedule KP, Column 6
For nonresident partners and tax-exempt organization partners only—
see instructions to Schedule KP, Column 6.
	 1.	Partner’s amount from Schedule KP, Column 5.........................1	_______________
	 2.	Professional service partnership only:
		Guaranteed payments for services only
		included in the amount on line 1.............. 2 _______________
	 3.	Allocable income (less related expenses)
		included in the amount on line 1.............. 3 _______________
	 4.	Interest from U.S. obligations included
		in the amount on line 1........................... 4 _______________
	 5.	Add lines 2, 3, and 4.............................................................5	_______________
	 6.	Apportionable income (loss). Subtract line 5 from line 1............6	_______________
	 7.	Apportionment factor from Schedule FACT, line 14....................7	 __.____________
	 8.	Multiply line 6 by line 7.........................................................8	_______________
	 9.	Professional service partnership only: Guaranteed payments
		for services performed within North Dakota.......................9	_______________
	10.	Allocable income (less related expenses) reportable to
		North Dakota.................................................................... .10	 ______________
	11.	Add lines 8, 9 and 10. Enter result in Column 6....................... .11	 ______________

Nonresident partners and
tax-exempt organization
partners only
(Columns 6 through 8)

For purposes of Columns 6 through 8,
a nonresident partner means:
	•	 an individual who is not domiciled
in North Dakota;
	•	 a trust, including a grantor trust,
that is not organized under
North Dakota law. This only
includes trusts that are subject to
income tax; or
	•	 a passthrough entity that has a
commercial domicile outside North
Dakota. A passthrough entity
includes a partnership,
S corporation, LLC treated like a
partnership or S corporation, and
any other similar entity.
For a tax-exempt organization partner,
only report its distributive share of
North Dakota income in Column 6.
Columns 7 and 8 do not apply to a
tax-exempt organization partner.
Column 6
Nonresident partner and taxexempt organization partner only
Complete Column 6 for each
nonresident partner and tax‑exempt
organization partner. Except as
provided below, multiply the
partner’s amount in Column 5 by
the apportionment factor from
Schedule FACT, line 14, and enter the
result in Column 6.

Exception: Complete the Worksheet
for Schedule KP, Column 6 on this
page to calculate the amount to enter
in Column 6 if any of the following
apply:
	•	 The partnership is a professional
service partnership that made
guaranteed payments for services
performed by nonresident
individual partners. These
payments are not apportioned, but
are allocated to the state where
the services were performed by
the partner. See the instructions
to Form 58, page 1, Item H, on
page 5 for more information.
	•	 The partnership has an item of
nonbusiness income subject to
allocation. See the instructions to
Form 58, Schedule K, line 26, on
page 10 for more information.
	•	 The amount in Column 5 includes
interest from U.S. obligations.
Column 7
Nonresident partner only
If a nonresident partner’s distributive
share of North Dakota income
in Column 6 is $1,000 or more,
multiply the amount in Column 6 by
2.50% (.025) and enter the result
in Column 7. However, the following
exceptions apply:
	•	 If a nonresident partner gives you
a completed Form PWA, enter the
amount from line 5 of Form PWA
in Column 7 and fill in the circle
under “Form PWA or Form PWE.”

12
	•	 If a nonresident partner gives
you a completed Form PWE, leave
Column 7 blank and fill in the circle
under “Form PWA or Form PWE.”
	•	 If a nonresident partner elected to
be included in a composite filing,
leave Column 7 blank and see the
instructions to Column 8.
See “Withholding from nonresident
partners” on page 3 for more
information.
Column 8
Nonresident partner only
Note: Leave Column 8 blank if
Column 7 was completed for the
nonresident partner.
Complete Column 8 for each
nonresident partner electing to
be included in a composite filing.
Multiply the amount in Column 6 by
2.50% (.025) and enter the result in
Column 8. If the amount in Column 6
is zero or less, enter zero in Column 8.
See “Composite filing” on page 3 for
more information.

Specific line
instructions for
page 1 of
Form 58, lines 1-12
Complete Schedule FACT,
Schedule K, and Schedule KP
before completing lines 1
through 12 on page 1 of
Form 58.
Line 4
Income tax withholding
Enter the North Dakota income
tax withholding shown on a 2023
Form 1099 or North Dakota
Schedule K-1. Be sure the state
identified on the Form 1099 is
North Dakota. Also enter the
North Dakota income tax withholding
shown on a 2022 North Dakota
Schedule K-1 if the entity that issued
it has a fiscal tax year ending in
the partnership’s 2023 tax year. Do
not enter on this line North Dakota
extraction or production taxes
withheld from mineral interest income,
such as an oil or gas royalty, because
they are not income taxes. Attach a
copy of the Form 1099 or
North Dakota Schedule K-1.

Line 5
Estimated tax payments
Enter the amount paid with the 2023
Forms 58-EXT and 58-ES plus any
overpayment applied from the 2