Iowa 1065 PTE-C

[kat57cpa]

How do I enter an exemption code for a non-resident partner who needs to declare they will file an Iowa return so that the partnership doesn't owe tax?

[DaveF1006]

To exempt a non-resident partner from the Iowa PTE-C composite tax requirement (because they will file their own Iowa return), you must use Exemption Code "D" (or in some systems, "Nonresident Member Composite Agreement") on the IA PTE-C Nonresident Member Schedule. 

This tells the state that the partner has signed a Nonresident Member Composite Agreement (Form 41-175) to file their own Iowa taxes. This means the partnership no longer has to pay tax on their behalf.