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Sched K-1, State Sched includes many states. All show either 0 or neg(loss) ordinary income but some Gross Receipts in small amounts. Does this require state tax forms?

For example: Arkansas; $0 ordinary income, $1 Gross Receipts - Arkansas requires all non-residents to file regardless of income.  TT charges $59 per state to file.  K-1 is from publicly traded MLP (pipeline).
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PatriciaV
Employee Tax Expert

Sched K-1, State Sched includes many states. All show either 0 or neg(loss) ordinary income but some Gross Receipts in small amounts. Does this require state tax forms?

It depends. As you have seen, some states expect you to file a return for any income and even if you have a loss. Other states have minimum income targets for a nonresident return. But in nearly all cases, states apply a reasonableness standard, in case the cost to file the return exceeds the income (or tax) that would be reported.

 

Bottom line: It's up to you. If you were allocated significant income from a state, check to see if they offer free e-filing from the state website. But if the income was quite low, you could simply wait to see if the state sends you a tax bill.

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2 Replies
PatriciaV
Employee Tax Expert

Sched K-1, State Sched includes many states. All show either 0 or neg(loss) ordinary income but some Gross Receipts in small amounts. Does this require state tax forms?

It depends. As you have seen, some states expect you to file a return for any income and even if you have a loss. Other states have minimum income targets for a nonresident return. But in nearly all cases, states apply a reasonableness standard, in case the cost to file the return exceeds the income (or tax) that would be reported.

 

Bottom line: It's up to you. If you were allocated significant income from a state, check to see if they offer free e-filing from the state website. But if the income was quite low, you could simply wait to see if the state sends you a tax bill.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Sched K-1, State Sched includes many states. All show either 0 or neg(loss) ordinary income but some Gross Receipts in small amounts. Does this require state tax forms?

@PatriciaV Thank you so much for your response.  Very helpful in wading through the confusion of K-1 treatment.  Much appreciated! 

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