According to this page from the Iowa Department of Revenue, nonresident LLC members can opt out of a composite return tax payment (provided they fill out a Nonresident Member Composite Agreement (41-175)).
Where can I make this election for members in Turbotax for Business?
Currently the K-1s being generated show that tax was paid on behalf of the members, but that is not true.
Note: Here is the relevant section from the page referred to above:
"A nonresident member who is not exempt from the requirement to have the pass-through entity pay composite tax on their behalf as described above may be excluded from the composite return tax payment requirement only if the nonresident member and pass-through entity complete and sign the Nonresident Member Composite Agreement (41-175). The completed agreement does not need to be filed with the Department, but it must be retained by the pass-through entity and provided to the Department upon request."
