North Dakota Passthrough Entity Withholding Adjustment

Passthrough Entity Withholding Adjustment
Form PWA - Passthrough Entity Withholding - Nonresident Member Adjustment (2023)
PASSTHROUGH ENTITY WITHHOLDING NONRESIDENT MEMBER ADJUSTMENT

Form PWA

OFFICE OF STATE TAX COMMISSIONER

2023

SFN 28728 (8-2023)

Part 1 - To be completed by nonresident member
Nonresident Member Name

Social Security Number (or FEIN)

1. Estimated North Dakota distributive share of income or estimated total North Dakota taxable
income, whichever is smaller

1

2. Multiply line 1 by 2.50% (.025)

2

3. a. Estimated North Dakota income tax paid
b. Additional North Dakota income tax withheld from wage income

3a
3b

4. Withholding adjustment amount. Add lines 3a and 3b

4

5. Amount to withhold. Subtract line 4 from line 2

5

I declare, under penalty of perjury, that this form is correct and complete to the best of my knowledge and belief.
Nonresident Member's Signature

Date

Part 2 - To be completed by passthrough entity

Federal Employer Identification Number

Passthrough Entity Name

Tax year for which this adjustment applies. If the passthrough entity and the nonresident member have different tax years, specify
the tax year of the passthrough entity to which the adjustment applies.
Calendar year 2023 OR

Fiscal year beginning

Purpose of form
Under North Dakota Century Code
(N.D.C.C.) § 57-38-31.1, a passthrough
entity is required to withhold North Dakota
income tax at the rate of 2.50% from
a nonresident member’s North Dakota
distributive share of income if (1) it is
$1,000 or more and (2) it is not included
in a composite return. If eligible, a
nonresident member may request that an
amount less than the statutory amount
be withheld by completing and submitting
Form PWA to the passthrough entity.

General instructions
A nonresident member is eligible to use
Form PWA if any of the following apply:
	 The member already paid estimated
North Dakota income tax on the North
Dakota distributive share of income.
	 The member had additional North Dakota
income tax withheld from wage income
to cover the tax expected to be owed on
the North Dakota distributive share of
income.
	 The member will have a North Dakota
taxable income less than the North
Dakota distributive share of income
because of an offsetting North Dakota
loss or adjustment to income on the
member’s North Dakota income tax
return.

2023, and ending

A “nonresident member” means an
individual who is not domiciled in North
Dakota, a trust that is not organized in
North Dakota, or a passthrough entity that
does not have a commercial domicile in
North Dakota.

,

Specific instructions for
passthrough entity
If you receive Form PWA from a
nonresident member, do the following:

A “passthrough entity” means a
partnership (all types), S corporation,
trust, limited liability company not taxed as
a C corporation, or other entity not taxed
at the entity level for North Dakota income
tax purposes.

1.	 Complete Part 2.

Exemption for certain members. If
the nonresident member is a passthrough
entity, the member may be eligible to elect
to exempt its North Dakota distributive
share of income from North Dakota income
tax withholding. See Form PWE for more
information.

3.	 Fill in the circle under “Form PWA or
Form PWE” for the nonresident member
on your North Dakota income tax
return as follows—

Specific instructions for
nonresident member
Complete Part 1 of Form PWA. On line 3,
the North Dakota income tax paid or
withheld must be for the same tax year
that your North Dakota distributive share
of income is reportable on your North
Dakota income tax return. Submit the
completed Form PWA to the passthrough
entity before the last day of the
passthrough entity’s tax year to which the
adjustment it is to apply.

2.	 Only withhold the amount shown in
Part 1, line 5, from the nonresident
member’s North Dakota distributive
share of income for the specified tax
year.

	

	 If filing Form 38 (fiduciary return),
see Schedule BI, Column 6.

	

	 If filing Form 58 (partnership return),
see Schedule KP, Column 7.

	

	 If filing Form 60 (S corporation
return), see Schedule KS, Column 7.

4.	 Attach a copy of Form PWA to your
North Dakota income tax return.
Keep the original signed copy for your
records.
Privacy Act Notification. In compliance
with the Privacy Act of 1974, disclosure of a
social security number or Federal Employer
Identification Number (FEIN) on this form is
required under N.D.C.C. §§ 57-01-15 and
57‑38-31.1, and will be used for tax reporting,
identification, and administration of North Dakota
tax laws. Disclosure is mandatory. Failure to
provide the social security number or FEIN may
delay or prevent the processing of this form.