I'm a fulltime CA resident and lived and worked in CA. I have an SCorp with business partners and clients in other states. The S corp taxes were just filed and I have received K-1s for 5 states in total. Should I file a personal state tax return for each of these, regardless of the tax amount?
your are going to have to go to each non-resident state's website and look at the filing instructions for non-residents to see if you are required to file. if you are and don't I'll bet sooner or later you get a bill with penalties and interest if you owe taxes. however, as a practical matter, you are unlikely to get a bill if the tax is only a few $'s - no guarantees.
I will give you a suggestion that you need to discuss with the other shareholders. some states allow the corp to file a composite return for the non-resident shareholders. thus it pays the tax for them and alleviates the need for them to file there own returns. issues can come up if any of the shareholders have other income sourced in the state. usually they have to file a return and include all income, thus a composite return may not be practical.
Thank you very much for your prompt response. This really helps. So I went back and checked and luckily the CPA had suggested filing composite returns for those states that allowed it. AZ did not allow it, but I checked their website - my income does not meet the threshold, so I don't need to file a Non resident return. So that takes care of 3 of the 5 states.
I have a follow-up question re Delaware. I did not have any DE income in 2019 but I received a very small amount - $121 in state tax refund from DE last year. Unlike AZ, DE does not have an amount threshold for filing Non Resident returns - it looks like if you have any gross income, you have to file. Question is does my $121 in state tax refund count as income and if so, do I have to file a DE return for 2019? Thank you so much!