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Indiana Free Printable IT-65 Partnership Return Booklet for 2024 Indiana Current Year Partnership Return Booklet with Forms and Schedules

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Current Year Partnership Return Booklet with Forms and Schedules
IT-65 Partnership Return Booklet

INDIANA 2 0 2 3 IT-65 Partnership Return Booklet Page 2 IT-65 Partnership Booklet 2023 SP 262 (R27 / 8-23) INDIANA IT-65 Partnership Return Booklet Year 2023 Contents What’s New for 2023...............................................................................................................................................................4 General Information...............................................................................................................................................................4 General Filing Instructions....................................................................................................................................................5 Instructions for Completing Form IT-65 ............................................................................................................................7 Summary of Calculations for Form IT-65.........................................................................................................................11 Certification of Signatures and Authorization Section....................................................................................................12 Mailing Options.....................................................................................................................................................................14 Instructions for Schedule IN K-1........................................................................................................................................14 Instructions for Schedule E, Apportionment of Income for Indiana ............................................................................16 Instructions for Completing Schedule PTET....................................................................................................................17 Instructions for Schedule Composite/Schedule Composite-COR.................................................................................19 Reminders .............................................................................................................................................................................25 Additional Information........................................................................................................................................................25 IT-65 Partnership Booklet 2023 Page 3 INTIME e-Services Portal Available Pass Through Entity Tax Increased Online Support for Tax Preparers In addition, a new Schedule PTET has been added to report PTET and amounts of PTET passed through to partners. See page 17 for further information on Schedule PTET. INTIME, DOR’s e-services tax portal available at intime.dor.in.gov, provides the following functionalities for IT-65 customers: • Make payments using a bank account or credit card • View and respond to correspondence from DOR • Request and print return transcripts on-demand • Electronic delivery of correspondence • Online customer service support through secure messaging In addition to the functionality listed above, INTIME provides increased access and functionality for tax preparers. INTIME provides the following functionality for tax preparers: • Gain access to view and manage multiple customers under one login • Ability to file returns, make payments, and view file and pay history for clients • Request electronic power of attorney (ePOA) authorization to view customer accounts • View and respond to correspondence for clients We strongly encourage all taxpayers to make payments and file returns electronically whenever possible. INTIME allows customers to make estimated payments electronically with just a few clicks. What’s New for 2023 References to the Internal Revenue Code The definition of adjusted gross income (AGI) is updated to correspond to the federal definition of adjusted gross income contained in the Internal Revenue Code (IRC). Any reference to the IRC and subsequent regulations means the Internal Revenue Code of 1986, as amended and in effect on January 1, 2023. For a complete summary of new legislation regarding taxation, please see the Synopsis of 2023 Legislation Affecting the Indiana Department of Revenue at www.in.gov/dor/files/2023-legislative-synopsis.pdf. Add-Backs • A new add-back (154) is available for specified research and experimental expenses required to be amortized for federal income tax purposes. See page 10 for more information. Credits • A new credit (874) is available for qualified investments at a mine reclamation site. See page 24 for more information. Deductions • • A new deduction (639) is available to allow the deduction for the portion of small employer health insurance premiums that is disallowed for federal purposes as a result of claiming the credit under IRC section 45R. See page 10 for more information. A new deduction (641) is available to permit a current-year deduction for specified research and experimental expenses otherwise required to be amortized for federal tax purposes. See page 10 for more information. In 2023, P.L. 1-2023 was enacted to create a new Pass Through Entity Tax (PTET) for partnerships and S corporations. The tax is imposed at the election of the partnership or S corporation. See Income Tax Information Bulletin #72B at www.in.gov/dor/ legal-resources/tax-library/information-bulletins/income-taxinformation-bulletins for more detailed information. Further, PTET has changed the reporting on several schedules. See the Instructions for Schedule IN K-1 on page 14 and Instructions for Schedule Composite/Schedule Composite-COR on page 18 for further information. Penalty for Failure to Include Nonresident Partners on Schedule Composite/Composite-COR The line to report the $500 penalty for failure to report all nonresident partners on composite schedules has been removed. However, DOR will continue to assess the penalty if a partnership does not include all nonresident partners as otherwise required. Repeal of Election to Be Taxed at the Partnership Level on Audit Adjustments and Schedule IN-EL The election for a partnership to be taxed at the partnership level on audit adjustments or amended returns was removed effective April 30, 2023. As a result, Schedule IN-EL has been removed. Note. This does not affect the Pass Through Entity Tax. General Information Annual Public Hearing In accordance with the Indiana Taxpayer Bill of Rights, the Indiana Department of Revenue will conduct an annual public hearing in Indianapolis in June of 2024. Event details will be listed at www.in.gov/dor/news-media-and-publications/dor-publicevents/annual-public-hearings. Please come and share feedback or comments about how DOR can better administer Indiana tax laws. If not able to attend, please submit feedback or comments in writing to: Indiana Department of Revenue, Commissioner’s Office, MS# 101, 100 N. Senate Avenue, Indianapolis, IN 46204. Our homepage provides access to forms, information bulletins and directives, tax publications, email, and various filing options. Visit www.in.gov/dor. Who Must File and When Partnerships conducting business within Indiana must file an annual return (Form IT-65) and information returns (Schedule IN K-1) with DOR. These forms must disclose each partner’s distributive share of the partnership income distributed or undistributed. These forms are due on or before the 15th day of the 4th month following the close of the partnership’s tax year. Enclose with Form IT-65 the first five pages of the U.S. Partnership Page 4 IT-65 Partnership Booklet 2023 Return of Income, Form 1065 or 1065B. Also enclose Schedule M-3. Federal Schedule K-1s should not be enclosed but must be made available for inspection upon request by DOR. Any partnership doing business in Indiana or deriving gross income from sources within Indiana is required to file a return. In addition, any partnership that has partners residing in Indiana is required to file a return, even if the partnership is not doing business in Indiana. For Indiana adjusted gross income (AGI) tax purposes, the term doing business generally means the operation of any business enterprise or activity in Indiana, including but not limited to the following: • The maintenance of an office, a warehouse, a construction site, or another place of business in Indiana; • The maintenance of an inventory of merchandise or material for sale, distribution, or manufacture, or consigned goods; • The sale or distribution of merchandise to customers directly from company-owned or -operated vehicles when the title of merchandise is transferred from the seller or distributor to the customer at the time of sale or distribution; • The rendering of a service to customers in Indiana; • The ownership, rental, or operation of a business or property (real or personal) in Indiana; • The acceptance of orders in Indiana with no right of approval or rejection in another state; • Interstate transportation; or • The maintenance of a public utility. The term “partnership” means an entity treated as a partnership for federal income tax purposes. Banks with common trust funds filing U.S. Form 1065 must file partnership Form IT-65 and comply with the provisions of Treas. Reg. 1.6032-1 when reporting for Indiana purposes. Calculating Corporate Income Tax Rate The corporate AGI tax rate is 4.9% General Filing Instructions Liability of the Partnership Partnerships as entities are not subject to income taxes unless the partnership makes a special election to be subject to income tax. However, publicly traded partnerships treated as corporations pursuant to IRC Section 7704 are classified for Indiana tax purposes in the same manner as they are classified for federal tax purposes. A limited liability company classified as a corporation for federal tax purposes should file Form IT-20. Partnerships are considered to be the taxpayer with respect to the payment of amounts required to be withheld at source. See the section titled “Withholding Tax Liabilities of Partnerships.” Partnerships are subject to use tax. Use tax is due on the storage, use, or consumption of tangible personal property purchased in a transaction in Indiana or elsewhere. This does not apply if the transaction is exempt from the sales and use tax by law or the sales tax due and paid on the transaction equals the use tax due. See the instructions for the Sales/Use Tax Worksheet on page 11. An apportionment schedule must be enclosed with the return if the partnership is doing business both within and outside Indiana and has any partners not domiciled in Indiana. See the instructions for Schedule E or Schedule E-7 on page 16. Any partnership that has nonresident partners must also file a composite return for all its nonresidents. Any partnership that fails to file a composite return that includes all its nonresident partners will be assessed a penalty of $500. To avoid penalty and interest charges for delinquent filing of returns, a partnership should verify its tax status and withholding responsibilities before commencing business in Indiana. Withholding Tax Liabilities of Partnerships The following instances obligate the partnership to register with DOR and become an Indiana withholding agent on behalf of each of the following. Withholding on Employees Partnerships making payments of salaries, wages, tips, fees, bonuses, and commissions that are subject to Indiana state and/ or county income taxes and are required by the IRC to withhold federal taxes on those types of payments are also required to withhold for Indiana tax purposes. Withholding on the compensation of nonresident team members of certain professional sports organizations or race team members is based on duty days performed in Indiana. Refer to Income Tax Information Bulletin #88 at www.in.gov/dor/files/reference/ib88. pdf, or Income Tax Information Bulletin #88B at www.in.gov/ dor/files/ib88b.pdf. If an employee resides in a state that has a reciprocal agreement with Indiana, the employee is exempt from Indiana state income tax but is subject to the relevant county tax. A partnership with an employee withholding liability must register as an Indiana withholding agent. DOR assigns an Indiana Taxpayer Identification Number (TID). The partnership has two options in registering as a withholding agent: • Register with DOR online using INBiz (inbiz.in.gov); or • Visit either DOR’s downtown Indianapolis office or one of the district offices located throughout the state. Payments of amounts withheld must be remitted to DOR via electronic method by the due date. If a filing and/or payment of the proper amount of tax withheld is not made by the due date, penalty and interest will be added. A person responsible for remitting payments may be personally subject to criminal prosecution if the failure to pay and/or file a withholding return is due to fraud or tax evasion. All entities are required to remit withholding statements electronically by using either a third-party vendor or via INTIME, DOR’s e-services portal at intime.dor.in.gov. Withholding on Partners A partnership must withhold state income tax at the appropriate income tax rate on the amount it pays or credits to any of its nonresident partners on the partner’s distributive share of the partnership’s income derived from Indiana sources regardless of whether distributions of property are made to partner and regardless of what of activities the partners may have in Indiana. IT-65 Partnership Booklet 2023 Page 5 All withholding will be remitted by using Form IT-6WTH. If a partnership fails to withhold, it will be assessed a penalty. This penalty is 20% plus interest, in addition to the amount withheld or required to be withheld and paid to DOR. If a distribution to nonresident partners is made with property other than money, or a gain is realized without the payment of money, the partnership may not release the property or credit the gain until it has funds sufficient to pay the withholding tax due. IC 6-3-4-12 provides that all nonresident partners must be included in a composite return schedule, and the partnership must continue to withhold Indiana adjusted gross income tax for all nonresident partners. Unless the partner completes a Schedule IN-COMPA or the partnership obtains department consent prior to the partnership’s filing deadline, there is no provision for opting out of withholding. Each nonresident partner’s composite tax is calculated at the relevant tax rate unless the partnership provides an exception code on the Schedule Composite or Schedule Composite-COR. DOR has streamlined the procedure for making withholding payments for nonresidents. See page 4 for information about using INTIME, DOR’s e-service portal at intime.dor.in.gov, for making withholding remittances. Credit for the withholding/composite tax will be reflected on Schedule IN K-1 for each partner. For further information, consult Income Tax Information Bulletin #72, which is available at www.in.gov/dor/files/reference/ib72.pdf. Individual Partners. A partnership must withhold state adjusted gross income (AGI) tax at the individual income tax rate on the apportioned distributive shares of partnership income (on current-year earnings derived from Indiana sources) and any other guaranteed payments attributable to Indiana. It must do this each time it pays or credits any of its nonresident partners and part-year resident individual partners. The withholding rate for individuals is 3.15% (.0315). The withholding requirement does not apply to individual partners who are residents of reverse credit states and who are subject to and pay income taxes at rates equal to or greater than Indiana’s individual income tax rate to the resident states. The relevant reverse credit states are: • Arizona; • Oregon; and • Washington, D.C. A partnership must withhold county income tax at the county’s relevant tax rate on each Indiana nonresident partner whose principal place of business or employment on January 1 is located in an Indiana county. See Schedule CT-40PNR, page 2, at www. in.gov/dor/tax-forms/2023-individual-income-tax-forms to get the county’s tax rate. Trusts and Estates. A partnership must withhold on the amount it pays or credits for the partner’s distributive share derived from Indiana sources for partners that are trusts and estates not domiciled in Indiana. Note. The withholding provisions do not apply to nonresident partners who are nontaxable trust or estate entities. Page 6 IT-65 Partnership Booklet 2023 A partnership must withhold tax on the amount it pays or credits for the partner’s distributive share derived from Indiana sources to a fiduciary. Then the trust or estate must also withhold state income taxes for all its nonresident beneficiaries. Corporate Partners. Partnerships must withhold AGI tax at the corporate tax rate on the amount it pays or credits for the partner’s distributive share derived from Indiana sources to all nonresident corporate partners. This withholding must be an amount reflecting the ultimate Indiana tax liability due by respective partners because of the partnership’s activities. A partnership must withhold and remit the Indiana Financial Institution Tax (FIT) if: • The partnership conducts the business of a financial institution; • The partnership has nonresident corporate partners; and • The partners conduct the business of a financial institution. FIT must be withheld on the respective nonresident corporate partner’s share of partnership income as computed under IC 6-5.54. However, if a written declaration that the partner is not subject to the FIT exists, the FIT withholding is not required. Instead, corporate AGI tax must be withheld from the nonresident corporate partner’s distributive share of income apportioned to Indiana. Withholding Amounts on Tiered Partnerships/S Corporations. A partnership must withhold state income tax at the individual income tax rate on the apportioned distributive shares of partnership income (on current-year earnings derived from Indiana sources) paid or credited to another nonresident partnership or nonresident S corporation. It must do this each time it pays or credits any of its nonresident partners or nonresident S corporations. Note. Partnerships and S Corporations not domiciled in Indiana must meet annual filing requirements and remit all unpaid tax, penalties, and interest. Accounting Periods and Methods The accounting periods for Form IT-65 and the method of accounting adopted must be the same as used for federal income tax purposes. Composite Withholding Payments (Form IT-6WTH) A partnership that files a composite return must withhold Indiana state and/or county income taxes from all nonresident partners into the corporate account using Form IT-6WTH. Payment is due the 15th day of the 4th month following the close of the partnership’s tax period. To make additional payments, please visit INTIME at intime.dor.in.gov. Payments for form IT-6WTH also may be made electronically. Check our website for updates. For further information, consult Income Tax Information Bulletin #72 available at www.in.gov/dor/files/reference/ib72.pdf and www.in.gov/dor. The total payments are claimed as a credit on line 9 of Form IT-65. Extended Filing Due Date The initial due date for filing is the 15th day of the 4th month following the close of the partnership’s tax year. DOR accepts the federal extension of time application (Form 7004) or the federal electronic extension. If a taxpayer has an extension, there is no need to contact DOR prior to filing the annual return. Returns postmarked within one month after the last date indicated on the federal extension form are considered timely filed. Do not file a separate copy of the federal extension form with DOR to request an Indiana extension at the time of requesting the extension. Instead, enclose a copy of the federal extension of time with the state return filing and check the box to question Q on the front of Form IT-65. If a federal extension is not needed, a partnership can request an Indiana extension of time to file via INTIME, DOR’s e-service portal at intime.dor.in.gov, or by submitting a request in writing to: Indiana Department of Revenue, Corporate Income Tax, Tax Administration, P.O. Box 7206, Indianapolis, IN 46207-7206. Extensions are applicable to the time for filing the return only and not to any tax liability due. Any payments made after the original due date must include penalty and interest. Amended Returns The partnership must file an amended Indiana return within 180 days after the filing of the amended federal return if: • The partnership files an amended federal return; and • The change(s) affects the Indiana income or the Indiana tax reportable by the partners. An adjustment made by the Internal Revenue Service affecting the reportable Indiana income must be reported to Indiana with an amended partnership return. This must be done within 180 days after the adjustment becomes final. Important. Check the box at the top of Form IT-65 if filing an amended return. Partners generally have 90 days from the date the partnership is required to file amended returns after the deadline for the partnership. Tiered partners and indirect partners have special timetables. For further information, see Income Tax Information Bulletin #72 available at www.in.gov/dor/files/reference/ib72.pdf. Instructions for Completing Form IT-65 Filing Period and Identification Use Form IT-65 to file: • A 2023 partnership return for a tax year ending on Dec. 31, 2023; • A short tax year beginning in 2023; or • A fiscal year beginning in 2023 and ending in 2024. For a fiscal or short tax year, fill in both the beginning month, day, and year and the ending month, day, and year at the top of the form. Identification Section Check the box at the top of the form if filing an amended return. For a name change, check the box at the top of the return. The copies of amended articles filed with the Indiana Secretary of State must be enclosed. The federal employer identification number (FEIN) shown in the box at the upper-right corner of the return must be the same as the number used on the U.S. Return of Partnership Income. Please use the correct legal name of the partnership and its current mailing address. County Code Number. List the two-digit county code number of the county in Indiana where the partnership has a primary business location. See Departmental Notice #1 located at www. in.gov/dor/files/reference/dn01.pdf for a list of the county code numbers. Enter “00” (two zeroes) in the county box located to the immediate right of the number and street if the partnership address lies outside of Indiana. For foreign addresses, please note the following: • The name of the city, town, or village in the box labeled City; • The name of the state or province in the box labeled State; and • Enter the postal code in the box labeled ZIP Code; and • Enter the 2-digit country code. Enter the principal business activity code, from the North American Industry Classification System (NAICS), in the designated block of the return. Use the six-digit activity code reported on the federal partnership income tax return. Questions K through U and Other Fill-in Lines All partnerships filing an Indiana partnership income tax return must complete the top portion of the form. This includes questions K through U. Check or complete all the boxes that apply to the return: K. Indicate the date and place the partnership was organized L. Indicate the partnership’s state of commercial domicile. M. Indicate the year the initial Indiana return was filed. N. Indicate the accounting method used. O. Check the “final return” box only if the partnership is dissolved, liquidated, or has withdrawn from the state. In the event of bankruptcy, Form BC-100 must be timely filed to close out any sales and withholding accounts. Go to www.in.gov/dor/ tax-forms/business-tax-forms to complete this form online. • Check “Composite Return” if filing a composite return for nonresident partners. • Submit a Schedule Composite for nonresident individual/ non-corporate entities or a Schedule Composite-COR for corporate entities domiciled outside of Indiana. • Check “PTET Return” if you are including a completed Schedule PTET with this return. P. Enter the total number of partners in the partnership in field one of question P. Enter in the number of all partners who are nonresidents of Indiana in field two of question P. Q. Check the box if the partnership has a valid extension of time or an electronic federal extension of time to file the return. If applicable, enclose a copy of federal Form 7004 when filing the state return. IT-65 Partnership Booklet 2023 Page 7 R. Check the box if this partnership is a member of any other partnership. S. Check this box if income is reported from disregarded entities. If this box is checked, please enclose a list of the disregarded entities with the return. T. Check this box if claiming a qualified research expense credit and attach the supporting schedule. Aggregate Partnership Distributive Share Income Note. Round all entries to the nearest whole dollar amount and do not use a comma in dollar amounts of four digits or more. For example, instead of entering “3,455” enter “3455.” Line 1. Enter the amount from the U.S. partnership return Schedule K: • Net ordinary business income; • Net income from real estate activities from Form 8825; • Other rental income activities; • Portfolio income and deductions; • Royalties; • Capital gains and losses; • Guaranteed payments; and • Other income. Total net income (loss) from Schedule K, line 1 through line 11 less line 12, and a portion of line 13 related to investment income (see instructions below). The Section 179 deduction and that portion of investment expenses included in federal Schedule K, part of line 12, and line 17 relating to investment portfolio (royalty) income, flowing through to federal Schedule E, may be tentatively deducted. Use the Worksheet for Partnership Distributive Share Income, Deductions, and Credits to help you calculate this figure. The income worksheet must be used if this partnership received any distributive income from one of the following: • An owned partnership interest; • An estate; or • A trust. See the worksheet and instructions on page 13. If filing federal Form 1065B by an electing large partnership, use the amounts from line 1 through 8 of Schedule K. Convert distributive share of income items into a Form 1065 Schedule K format. Carry the figures to Form IT-65 and Schedule IN K-1. Required Indiana State Modifications, Lines 2a through 2d Lines 2a through 2d. Enter any add-backs here. Enter the name of the add-back, its 3-digit code, and its amount. Use a negative sign for negative amounts (-). Attach additional sheets if necessary. Adding Back Depreciation Expenses Several of the discontinued add-backs were created by timing differences between federal and Indiana allowable expenses. Following is an example of how to report a difference. Page 8 IT-65 Partnership Booklet 2023 Example. ABC Company has qualified restaurant equipment. For federal tax purposes, they use the accelerated 15-year recovery period for an asset placed in service in 2009. Since 2009, ABC Company has been adding back the depreciation expense taken for federal purposes that exceeded the amount allowable for Indiana purposes. The accumulated depreciation on such an asset through 2012 is, therefore, different for federal and state purposes. This difference will remain until the asset is fully depreciated or until the time of its disposition. In this example, the asset was acquired in January 2009 at a purchase price of $120,000. This normally would have a 25-year recovery period, but IRC Sec. 168 allows for a 15-year recovery period. Tax year 2012 is the last year ABC Company will have reported a qualified restaurant equipment add-back until the end of the 15-year recovery period. If this asset was sold before being fully depreciated, the catch-up modification would be reflected in the year of the sale. However, if this property is held through 2023 (the 15th year of depreciation), ABC Company will report a negative $12,800 catch-up add-back on the 2023 state tax return. Reporting Certain Prior-Year Modifications In certain cases, a modification in a prior year may have been limited due to various federal limitations, including basis limitations, passive loss limitations, and at-risk loss limitations. Even though certain modifications may not apply to activities during the current taxable year, you may be required to report a modification when you have income against which to realize the modification. Use the modification code for the year in which the modification was actually accrued. This includes, but is not limited to, modifications required to be reported using 3-digit code 149 (Meal Deduction Add-Back) and code 634 (COVIDRelated Employee Retention Credit Disallowed Expenses Deduction). The following add-backs and deductions should be entered on lines 2a through 2d. Conformity Add-Back Before this publication was finalized Indiana had not conformed to any changes to the Internal Revenue Code (IRC) that may have become law after January 1, 2023. Therefore, the IRC used to figure Indiana income may not wind up being the same as the IRC used to figure federal income. This add-back is specific to these annual current year conformity issues. If uncertainty exists as to whether or not Indiana will adopt some or all of the federal legislation passed after January 1, 2023, that acts to modify federal AGI, you may add back those items as an “other” add-back. In the event those items are adopted, an amended return should be filed to recoup the add-back(s). Conformity Add-Back – Positive Entry (3-digit code: 120) This add-back is only for current year conformity issues. Conformity issues for preceding tax years must be addressed on the add-back line specific to the item in question. If the state legislature does not conform to federal code changes enacted after January 1, 2023, you may have to amend your return at a later date to reflect any differences between Indiana and federal law. You may wish to periodically check DOR’s homepage at www.in.gov/dor for updates. Conformity Add-Back – Negative Entry (3-digit code: 147) This add-back generally is based on conformity issues arising from a previous year. However, in rare cases this can arise from conformity issues arising in the current year where the IRC treats an item as taxable or nondeductible that was previously exempt or deductible. Tax Add-Back (3-digit code: 100) Add back all state taxes based on or measured by income, levied by any state, which were deducted on the federal tax return. Wagering taxes fall within this category to be added back. However, the amount to be added back is being phased out. See the following instructions. • Wagering taxes. The portion of wagering taxes required to be added back as a tax based on or measured by income is being reduced (phased out). The percentage of taxes required to be added back is determined by the first date of the taxpayer’s taxable year, and is determined as follows: 2019 – 87.5% ; 2020 – 75%; 2021 – 62.5%; 2022 – 50%; 2023 – 37.5% 2024 – 25.0%; 2025 – 12.5%; 2026 and later – no add back required. For example, Casino X deducts $10,000,000 in riverboat wagering taxes in 2023. Casino X reports a $10,000,000 federal income tax deduction for these taxes in 2023. Individual owns 10% of Casino X. Individual’s share of Casino X’s income taxes is $1,000,000. Instead of Individual adding back the full $1,000,000, Individual will add back $375,000. Note. Income, losses and/or expenses from other schedules and forms may flow through to federal Schedules C, E and F. For example, partnership income from federal Schedule K-1 may be included on federal Schedule E, while expenses from federal Form 8829 may be included on federal Schedule C. Make sure to check these schedules and forms for any deduction that needs to be added back. Add-Back for Bonus Depreciation (3-digit code: 104) An amount attributable to bonus depreciation in excess of any regular depreciation that would be allowed if an election under Internal Revenue Code (IRC) Section 168(k) had not been made as applied to property in the year that it was placed into service. Taxpayers that own property for which additional first-year special depreciation for qualified property was allowed in the current taxable year or in an earlier taxable year must add or subtract an amount necessary to make the AGI equal the amount computed without applying any bonus depreciation. The first-year special depreciation includes 100% bonus depreciation. The subsequent depreciation allowance must be calculated as if the bonus depreciation had not been permitted until the property is disposed or fully depreciated for Indiana purposes. Enclose a statement to explain the adjustment. Income Tax Information Bulletin #118 at www.in.gov/dor/files/reference/ib118.pdf explains the required modification on the allowance of depreciation for state tax purposes. Note. Special rules may apply if the bonus depreciation is taken against property acquired in a like-kind exchange. See Income Tax Information Bulletin #118 at www.in.gov/dor/files/reference/ib118. pdf for additional information. Add-Back for Section 179 Expense Excess (3-digit code: 105) Add or subtract the amount necessary to make the adjusted gross income of the taxpayer that placed any IRC Section 179 property in service in the current taxable year or in an earlier taxable year equal to the amount of adjusted gross income that would have been computed as if the federal limit for expensing under IRC section 179 was $25,000 as opposed to $1,000,000 (adjusted for inflation). Indiana has adopted an expensing cap of $25,000. The federal increase to a $1,000,000 deduction was not allowed for purposes of calculating Indiana adjusted gross income. However, the $2,500,000 threshold for phase-out (adjusted for inflation) is allowed for purposes of calculating Indiana AGI. The depreciation allowances in the year of purchase and in later years must be adjusted to reflect the additional first-year depreciation deduction, including the special depreciation allowance for 100% bonus depreciation property, until the property is sold or fully depreciated for Indiana purposes. Note. The net amount determined for the net bonus depreciation or the IRC Section 179 add-back might be a negative figure (because of a higher depreciation basis in subsequent years). If it is, use a minus sign to denote that. (If the taxable income is a loss, this adjustment increases a loss when added back.) Enclose a statement to explain the adjustment. Note. Special rules may apply if the Section 179 expensing is taken against property acquired in a like-kind exchange. See Income Tax Information Bulletin #118 at www.in.gov/dor/files/ reference/ib118.pdf for additional information. Add-Back of OOS Municipal Obligation Interest (3-digit code: 137) Interest earned from a direct obligation of a state or political subdivision other than Indiana (out of state, or OOS) is taxable by Indiana if the obligation is acquired after Dec. 31, 2011. Interest earned from obligations held or acquired before Jan. 1, 2012, is not subject to Indiana income tax and should not be reported as an add-back. Note. Interest earned from obligations of Puerto Rico, Guam, Virgin Islands, American Samoa, or Northern Mariana is not included in federal gross income and is exempt under federal law. There is no add-back for interest earned on these obligations. For more information, see Income Tax Information Bulletin #19 available at www.in.gov/dor/files/reference/ib19.pdf. Federal Repatriated Dividend Deduction Add-Back (3-digit code: 139) Add back the deduction for income under IRC Section 965 reported to partners. Report the add-back to the partners using code 139 on Schedule IN K-1. For nonresident individuals, include only the apportioned amount of the add-back. IT-65 Partnership Booklet 2023 Page 9 Excess Federal Interest Deduction Modification (3-digit code: 142) IRC Section 163(j) limits the federal interest deduction for most business interest to a portion of adjusted taxable income plus business interest income. However, Indiana decoupled from this provision. Subtract an amount equal to the amount disallowed as a federal deduction for excess business interest in the year in which the interest was first paid or accrued. Add back any amount of interest previously deducted for Indiana and allowable for federal purposes in the current taxable year. For partners, the partner will be required to compute any add-back at the partner level. For purposes of reporting this modification and determining composite tax, compute any add-back as if the partnership is the only source of the partner’s interest income/ deduction. Specified Research and Experimental Expenses Add-Back (3-digit code: 154) If you claimed a federal income tax deduction for specified research and experimental expenses that are required to be amortized for federal purposes pursuant to IRC section 174, add back the amount of expenses you actually deducted for federal income tax purposes. See the instructions for Code 641 for further information on the amount of expenses allowable as a deduction. Note. If after printing of these instructions, IRC Section 174 is amended to allow immediate expensing of research and experimental expenses and you elect to amortize those expenses, you cannot use this code and Code 641 to accelerate the allowance of your expenses. Example. Corporation DEF incurred $100,000 of specified research expenses in 2023. Corporation DEF reported $10,000 of amortized expenses in 2023. Corporation DEF will use Code 154 to add back the $10,000 claimed for federal purposes and use Code 641 to report $100,000 allowable for Indiana purposes. For 2024-2028, Corporation DEF will continue to use Code 154 to report timing differences. Deduction for Interest on U.S. Government Obligations (3-digit code: 610) Deduct interest income, less related expenses, from certain obligations of the U.S. government included as income on the federal return. See Income Tax Information Bulletin #19 available at www.in.gov/dor/files/reference/ib19.pdf for a list of eligible items. Indiana Lottery Winnings Annuity Deduction (3-digit code: 629) If a taxpayer receives proceeds from a winning Hoosier Lottery ticket for a lottery held prior to July 1, 2002, those proceeds may be deducted from the taxpayer’s Indiana adjusted gross income. This deduction applies only to prizes won from the Hoosier Lottery Commission; proceeds from other state lotteries or from other gambling sources, such as casinos, are not deductible. In addition, proceeds from winning Hoosier Lottery tickets for lotteries held after June 30, 2002, are not deductible. Note. Individuals or entities that have purchased Hoosier Lottery prizes from a winning ticket holder for valuable consideration are not eligible for this deduction. Page 10 IT-65 Partnership Booklet 2023 Infrastructure Fund Gift Deduction (3-digit code: 631) Shareholders or partners may be eligible to claim a deduction if a contribution has been made to a regional development infrastructure fund. Record the amount on Part 4, lines 5-7 of the IN K-1. Filers should keep detailed records of the contribution as DOR can ask filers to provide this information at a later date. Indiana-only Tax-exempt Bonds Deduction (3-digit code: 636) If you had interest from a bond issued by or in the name of certain Indiana government subdivisions or entities or amounts received upon redemption or maturity of the bond, deduct any interest or other income included in federal gross income. Do not deduct any bond interest that is excluded from federal gross income. In addition, if you sell the bond, do not deduct any amounts for which the bond is sold in excess of your purchase price. See IC 6-8-5-1 for further information regarding the deduction. Small Employer Health Insurance Premium Deduction (3-digit code: 639) If you: • claimed a federal tax credit for small employer health insurance premiums under IRC section 45R; and • would have been permitted a deduction for those premiums except for the disallowance under IRC section 280C(h), you are permitted a deduction for the portion of the premiums disallowed for federal purposes. Use Code 639 to enter the amount of premiums for which a deduction was disallowed for federal purposes because you claimed a federal tax credit for small employer health insurance premiums. Specified Research and Experimental Expenses Deduction (3-digit code: 641) If you claimed a federal income tax deduction for specified research and experimental expenses that are required to be amortized for federal purposes pursuant to IRC section 174, deduct the amount of expenses paid or incurred in the current taxable year for federal income tax purposes. See the instructions for Code 154 for further information on the amount of expenses required to be added back. Do not claim this deduction for any research expenses for which a deduction is disallowed under IRC section 280C(c). Note. If after printing of this bulletin, IRC Section 174 is amended to allow immediate expensing of research and experimental expenses and you elect to amortize those expenses, you cannot use this code and Code 154 to accelerate the allowance of your expenses. Example. Corporation DEF incurred $100,000 of specified research expenses in 2023. Corporation DEF reported $10,000 of amortized expenses in 2023. Corporation DEF will use Code 641 to report $100,000 allowable for Indiana purposes and use Code 154 to add back the $10,000 claimed for federal purposes. For 2024-2028, Corporation DEF will continue to use Code 154 to report timing differences. Line 2d. Enter the total amount of add-backs and subtractions from any additional sheets. If more than five modifications are needed, attach additional sheets detailing them. Total the amounts from the additional sheets and enter the total here (use a negative sign to denote a negative amount). Line 3. Add lines 1 through 2d. Apportionment of Income Partnerships deriving income from sources within and outside Indiana and having non-Indiana-domiciled partners or nonunitary corporate partners must complete line 4. Line 4. Enter the Indiana apportionment percentage if the partnership has any multistate business activities. If apportioning income, enter the Indiana percentage (rounded to two decimal places) from Schedule E or Schedule E-7. Do not enter 100%. Before continuing to lines 5 through 14, complete Schedule IN K-1 for each partner. Summary of Calculations for Form IT-65 Sales/Use Tax IC 6-2.5-3-2 imposes a use tax on the use, storage, or consumption of tangible personal property in Indiana that was purchased or rented in a retail transaction, wherever located, and sales tax was not paid. This rate is 7%. Examples of taxable items include: • Magazine subscriptions; • Office supplies; • Electronic components; and • Rental equipment. Any property purchased free of tax by use of an exemption certificate may be subject to the use tax. In addition, any property purchased out of state or exempt from Indiana sales or use tax and converted to a nonexempt use by the business is subject to the use tax at the time of conversion. Complete the Sales/Use Tax Worksheet below to compute any sales/use tax liability. For more information about use tax, visit www.in.gov/dor or call 317-232-2240. Note. A registered retail sales merchant or out-of-state use tax agent for Indiana must report nonexempt purchases used in the Indiana business. This is reported on Form ST-103, Indiana Annual, or Monthly Sales and Use Tax Voucher. If use tax is not paid by the original due date of the return, interest will be added to the amount due. A 10% penalty or $5, whichever is greater, is charged on each unpaid use tax liability. Caution. Do not report totals from Form ST-103 on this worksheet or on Form IT-65. Line 5. Enter the use tax due from the Sales/Use Tax worksheet below. Line 6a. Enter the total tax liability of the nonresident members from line 15G of Schedule Composite (column D plus column F). Enclose Schedule Composite. Line 6b. Enter the total tax liability of the nonresident corporate entity(ies) from line 29C of Schedule Composite-COR. Enclose Schedule Composite-COR. Line 6c. Enter the total tax from Schedule PTET, Line 24. Enclose Schedule PTET. Line 8. Enter the total amount of pass-through withholding and Pass Through Entity Tax (PTET) remitted by other entities on your behalf. Enclose Schedule IN K-1 from the paying entity. Line 9. Enter the total composite withholding payments and PTET payments from Form IT-6WTH. Amounts withheld from nonresident partners included in the composite return must be remitted using Form IT-6WTH. Note. Do not claim withholding or PTET with Form IT-6WTH until you have remitted the withholding or PTET to DOR. Any payments made with the return should not be included in line 9. Line 10. Enter any other payments and credits belonging to the partnership. Note. Certain Motorsports Investment District Income (prize winnings) and IN state and Marion County withholding taxes may be reported on Form IN-MSID and/or Form IN-MSID-A. Sales/Use Tax Worksheet List all purchases made during the tax year from out-of-state retailers. Column A Description of personal property purchased from out-of-state retailer Column B Date of purchase(s) Column C Purchase Price of Property(s) Magazine subscriptions: Mail order purchases: Internet purchases: Other purchases: 1. Total purchase price of property subject to the sales/use tax: enter total of Columns C............................... 1 2. Sales/use tax: Multiply line 1 by .07 (7%)...................................................................................................... 2 3. Sales tax previously paid on the above items (up to 7% per item)................................................................ 3 4. Total amount due: Subtract line 3 from line 2. Carry to Form IT-65, line 5. If the amount is negative, enter zero and put no entry on line 5 of the IT-65................................................................................................... 4 IT-65 Partnership Booklet 2023 Page 11 If the partnership allocates any of those prize winnings and withholding amounts to the ultimate recipients (e.g., corporation, partnership, individual, etc.), the partnership must issue form INMSID-A to the recipients to reflect the amounts passed through (winnings and withholdings). If you did not allocate amounts to other ultimate recipients, you should issue an IN-MSID-A to yourself in order to claim the credit for these amounts. A detailed explanation must be enclosed for any credits claimed on this line. Line 11. Enter the amount of Economic Development for a Growing Economy (EDGE) credit being claimed from line 19 of Schedule IN-EDGE if not passing through to partners on Schedule IN K-1. Complete Schedule IN-EDGE and enclose it with the return. Otherwise, this credit will be denied. Line 12. Enter the amount of EDGE-R credit being claimed from line 19 of Schedule IN-EDGE-R if not passing through to partners on Schedule IN K-1. Complete Schedule IN-EDGE-R and enclose it with the return. Otherwise, this credit will be denied. Line 13. Enter the total amount of credits claimed from Schedule IN-OCC, and enclose Schedule IN-OCC with the return. Otherwise, these credits will be denied. If filing this schedule with Form IT-65, only reflect the credit amounts from Schedule IN K-1s on behalf of the entity’s partners who are included on the composite return. Do not include credits from the IN K-1s that belong to partners who are not included on the composite return. Enter the combined pro rata credits on one line of the IN-OCC; do not enter a line for each composite member. The total amount of credit for the members on the composite return cannot exceed the entity’s total tax due. In addition, sales and use tax cannot be offset by these nonrefundable credits if included in the total tax due. If an individual income tax return is being filed for a nonresident member included on the Schedule Composite, the nonresident member should use the 4-digit code provided on Schedule IN K-1, not the 3 digit code utilized on the pass-through entity’s income tax return. Line 14. Subtract lines 8 through 13 from line 7. If a balance due remains, proceed to lines 15 through 17. Line 15. Enter the total interest due. See Departmental Notice #3 available at www.in.gov/dor/files/ reference/dn03.pdf for the current interest rate or contact DOR by calling 317-232-2240. Line 16. Enter the total penalty due. The penalty for late payment is 10% of the amount (but not less than $5) of any composite tax due on line 14 paid after the 15th day of the 4th month following the end of the partnership’s taxable year. The penalty is still due on use tax paid after the original due date of the return. If a return showing no liability on line 7 is filed late, the penalty for failure to file by the due date is $10 per day the return is past due, up to a maximum of $250. In addition, a separate $10 penalty is assessed on each Schedule IN K-1 information return that is filed late. Page 12 IT-65 Partnership Booklet 2023 Note. No penalty is due on composite withholding tax if at least 80% of the withholding tax for the current year, or 100% of the prior year’s withholding tax is remitted by the 15th day of the 4th month following the end of the tax year. Penalty is applicable if all remaining tax and interest due is not paid by the extended due date. Line 17. If line 14 is greater than zero, add lines 14 through 16 and enclose a separate remittance for the total amount owed for each Form IT-65 filed. Please pay in U.S. funds. If paying by check, make check payable to Indiana Department of Revenue. Line 18. If the total of lines 8 through 13 exceeds line 7, subtract the total of lines 15 and 16 from line 14. If the result is less than 0, this is the net overpayment. If penalties and interest are due because of a delinquent filing or payment, the overpayment must be reduced by these charges. If the result is a balance due, enter the difference on line 18. An overpayment credit may not be carried over to the following year, so any overpayment amount will be refunded. Certification of Signatures and Authorization Section Sign, date, and print the name on the return. If a paid preparer completes the return, authorize DOR to discuss the tax return with the preparer by checking the authorization box above the line for the name of the personal representative. Personal Representative Information Typically, DOR contacts a taxpayer if we have any questions or concerns about the tax return. If the taxpayer wants DOR to be able to discuss the tax return with someone else (e.g., the person who prepared it or a designated person), this area must be completed. First, check the “Yes” box that follows the sentence “I authorize the Department to discuss my tax return with my personal representative.” Next, enter: • The name of the individual designating as a personal representative; and • The individual’s email address. If this area is completed, DOR is authorized to contact the personal representative, instead of the taxpayer, about this tax return. After the return is filed, DOR will communicate primarily with the designated personal representative for any matters concerning this return. Note. The authorization for DOR to be in contact with your personal representative may be revoked at any time. To do so, tell us in a signed statement. Include the taxpayer name, federal identification number, and the year of the tax return. Mail the statement to Indiana Department of Revenue, P.O. Box 7206, Indianapolis, IN 46207-7206. Worksheet for Partnership Distributive Share Income, Deductions and Credits Use this worksheet to compute the entry for line 1 of Form IT-65 and to assist in computing amounts reported on Schedule IN K-1. Enter the total distributive share of income from each item as reportable on Form 1065, Schedule K. Do not complete Column B and C entry lines unless the partnership received distributive share or tiered income from other entities. A. Partnership Income All Sources Distributive Share Amounts Partnership’s Distributive Share of Items 1. Ordinary business income (loss)............................................... 2. Net rental real estate income (loss).......................................... 3. Other net rental income............................................................. 4. Guaranteed payments............................................................... 5. Interest income.......................................................................... 6a. Ordinary dividends.................................................................... 7. Royalties................................................................................... 8. Net short-term capital gain (loss).............................................. 9a. Net long-term capital gain (loss)............................................... 10. Net IRC Section 1231 gain (loss).............................................. 11. Other income (loss)................................................................... Less Allowable Deductions for State Tax Purposes 12. B. Distributions from Partnerships / Estates / Trusts Everywhere C. Distributions Attributed to Indiana Enter for line 14B below total distributive share income received by the partnership from all other nonunitary partnerships, estates, and trusts. Enter for line 15B an amount equal to required state modifications for Indiana Adjusted Gross Income. Enter for line 14C below, total distributive share income received by the partnership from other partnerships, estates, and trusts that were derived from or allocated to Indiana. Enter for line 15C an amount equal to the Indiana modifications to adjusted gross income attributed to Indiana. 14B 14C 15B 15C IRC Section 179 expense deduction 1................................ 13A. Portion of expenses related to investment portfolio income, including investment interest expense and other (federal non-itemized) deductions.................................................... 13B. Other information from line 20 of federal K-1 related to investment interest and expenses not listed elsewhere...... 14. Carry total on line 14A to Form IT-65 line 1 on front page of return..................................................................... 15. Total of Indiana state modifications to distributive share income (see line 2f, Form IT-20S)......................................................................................... 16. Net Indiana adjusted gross income distributions from partnerships, estates, and trusts (add lines 14C and 15C)......................................................................... 16C 17. Enter amount of Indiana pass-through credits attributed from partnerships, estates, and trusts, if any....................................................................................................... 17C 14A Worksheet for Attributing Partnership Income for Unitary Corporate Partners Use the worksheet whenever partnership income is being distributed to a corporate partner having a unitary relationship with the partnership. A unitary business relationship means maintaining business activities or operations that are of mutual benefit, dependent upon, or contributory to one another in transacting business between a corporate partner and the partnership. Unity may be established whenever there is unity of operation and use evidenced by centralized management or executive force, centralized purchasing, advertising, accounting, or other controlled interaction between a corporate partner and the partnership. If a corporate partner and a partnership maintain a unitary business relationship as described above, the partnership distribution shall be distributed to the partner without any apportionment by the partnership. If the partner derives income from sources both within and outside Indiana and is required to apportion its income, the partner’s apportionment factor shall include the partner’s proportionate share of the apportionment factor of the partnership. Use the following table to show apportionment factor’s values from the partnership assigned to the unitary corporate partner. Partnerships deriving income from sources both within and outside Indiana or having any corporate partners must complete the Apportionment Schedule E. Enter the partner’s pro rata amounts as determined by the partnership entity’s completed Apportionment Schedule E. Duplicate this worksheet for each corporate partner. (These amounts are to be included with the corporate partner’s own apportionment factor.) Apportionment Schedule E Receipts Factors Total from Indiana Sources Line 1A Total from All States Line 1B IT-65 Partnership Booklet 2023 Page 13 Officer Information An officer of the organization must sign and date the tax return and enter the officer’s name and title. Please enter a daytime telephone number where DOR may call if there are any questions about the tax return. Also, enter your email address to be contacted via email. Paid Preparer Information Fill out this area if a paid preparer completed this tax return. The paid preparer must sign and date the return. In addition, please enter the following: • The paid preparer’s email address; • The name of the firm the paid preparer is employed by; • The paid preparer’s PTIN (personal tax identification number). This must be the paid preparer’s PTIN; do not enter an FID or Social Security number; • The paid preparer’s complete address. Note. Complete this area even if the paid preparer is the same individual designated as the personal representative. Mailing Options If taxes are owed, please mail the completed return to: Indiana Department of Revenue P.O. Box 7205 Indianapolis, IN 46207-7205 If taxes are not owed, please mail the completed return to: Indiana Department of Revenue P.O. Box 7147 Indianapolis, IN 46207-7147 Instructions for Schedule IN K-1 Enclose a copy of each partner’s Schedule IN K-1 with Form IT-65. Also, provide a completed copy of Schedule IN K-1 to each partner. Beginning with tax years ending after Dec. 31, 2019, a taxpayer that is required to file 25 or more Schedule IN K-1s must file the Schedule IN K-1s in an electronic format. For taxpayers filing on a calendar year basis, this electronic filing requirement begins with tax year 2020. Line 4a and b. If the partner is a disregarded entity (DE), enter the partner’s name and FEIN, and indicate what kind of partner the entity is (see instructions for federal Schedule K-1 at apps.irs. gov/app/picklist/list/formsPublications.html). Line 5. List the type of entity of the partner for whom you are issuing the Schedule IN K-1. Line 6. Enter the partner’s state of residence or commercial domicile. Line 7. If partner was an Indiana nonresident individual on Jan. 1, 2023, and worked in Indiana as of Jan. 1, 2023, then enter the individual’s 2-digit county of employment in this box. You may get the 2-digit code number from Departmental Notice #1 at www.in.gov/dor/files/reference/dn01.pdf. Line 8. Enter the name of the entity that remitted actual payment of the withholding. Line 9. Enter the FEIN of the paying entity. Note: Do not obscure any digits when entering the FEIN. Line 10. Enter the amount of Indiana PTET paid. Line 11. Enter the amount of Indiana state tax withheld. This amount should only include payments made into the corporate account and withholding amounts passed through by another entity. Line 12. Enter the amount of Indiana county tax withheld. Part 2 – Pro Rata Share of Indiana Pass-through Tax Credits from Partnership If the partnership has available any eligible Indiana credits flowing through to the partners, enter the following: • Federal employer identification number from the entity that the credit was awarded to. If the credit is passed through from another entity enter the FEIN from Schedule IN K-1; • The credit’s certification year; • For credit codes 818, 820, 835, 839, 849, 857, 858, 860, 863, 865, 867, 868, 869, 874, 1818, 1820, 1835, 1849, 1858, 1860, 1863, 1865, 1867, 1868, and 1869, enter the credit’s certification, project, or PIN number; • The credit’s 3- or 4-digit credit code; and • The pro rata amount of credits allotted to each partner. Part 1 – Partner’s Identification Section A completed IN-OCC credit schedule with Form IT-65 to support the credit distribution for certified credits must be enclosed; otherwise, the credits will be denied. Line 1. Enter the name of the partner (individual, entity, trust name, etc.). Line 2. Enter the partner’s Social Security number if an individual or the partner’s federal employer identification number (FEIN) if the partner is another entity. See the descriptive list of pass-through tax credits that may be available to a pass-through entity on page 20. Each credit is assigned a 3- or 4-digit code number. This should be used for identification purposes when reporting and claiming these credits. For more information, see Income Tax Information Bulletin #59 available at www.in.gov/dor/files/reference/ib59.pdf. Line 3. Enter the applicable pro rata percentage of the partner’s interest in the partnership. The percentage should be adjusted to an annual rate if necessary. Note. The 3-digit codes utilized on behalf of each partner on Schedule IN-OCC towards composite tax should be reflected as 4-digit codes on Part 2 of Schedule IN K-1. Any pro rata portion of the partner’s Complete a separate Schedule IN K-1 to identify each partner. Check the box if filing an amended return. Page 14 IT-65 Partnership Booklet 2023 credit above the 4-digit amount previously utilized towards composite tax should be reported on Part 2 of Schedule IN K-1 as a 3-digit code and the remaining amount reflected in the amount claimed column. Example. Company A used $400 of the partner’s $700 total Hoosier Business Investment Credit to offset his tax liability on the composite filing. The partner has $300 remaining credit. The IN K-1 will breakdown the credit as follows: Credit Name 3- or 4Amount Digit Code Hoosier Business Investment Credit – Composite 1820 $400 Hoosier Business Investment Credit 820 $300 If the partner has other taxable Indiana-source income, Form IT40PNR, reporting all Indiana-source income (including the income taxed on the composite return) should be filed. When completing the IN-OCC, the partner will be able to use up to $700 of the HBI credit, using the amount associated with the 4-digit number first. For example, if the total state tax liability is $500, “HBI 1820 $400” will be listed on Schedule IN-OCC, and the remaining amount is then reported as needed as “HBI 820 $100.” A 3-digit code 820 in the amount of $200 remaining will be available to carryforward. Credits reported on Part 2 of Schedule IN K-1 that are used to offset tax liabilities will be reported on the following lines on Form IT-65: • Any credits not requiring an IN EDGE, IN EDGE-R, or IN-OCC schedule will be reported on line 10; • EDGE credit code 839 will be reported on line 11; • EDGE-R credit code 857 will be reported on line 12; and • IN-OCC credit codes 818, 820, 849, 858, 860, 863, 865, 867, 868, 869, 1818, 1820, 1849, 1858, 1860, 1863, 1865, 1867, 1868, and 1869 will be reported on line 13. Part 3 – Distributive Share Amount Complete lines 1 through 13b for the partner. Also provide the partner with a Schedule IN K-1 showing the partner’s share of income, credits, and modifications. If filing federal Form 1065B, convert taxable income distributions to federal Form 1065 Schedule K-1 format. Line 1 through line 13b. For full-year Indiana resident partners, complete these lines as shown on the federal Schedule K-1, Form 1065 or Form 8865. On line 13a or 13b, include investment interest expenses attributed to royalty income. Also include all other federal deductions. However, for individual partners, do not include those deductions treated as itemized deductions. Do not report any other type of investment interest expense, itemized deduction, or carryover loss on this line. Line 14. Add the sum of lines 1 through 11 and subtract lines 12, 13a, and 13b. The amount on this line is used solely to determine the income subject to withholding and Pass Through Entity Tax. The partner must make any determinations related to the t
Extracted from PDF file 2023-indiana-it-65-booklet.pdf, last modified October 2023

More about the Indiana IT-65 Booklet Corporate Income Tax Tax Return TY 2023

We last updated the Current Year Partnership Return Booklet with Forms and Schedules in January 2024, so this is the latest version of IT-65 Booklet, fully updated for tax year 2023. You can download or print current or past-year PDFs of IT-65 Booklet directly from TaxFormFinder. You can print other Indiana tax forms here.


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Related Indiana Corporate Income Tax Forms:

TaxFormFinder has an additional 69 Indiana income tax forms that you may need, plus all federal income tax forms. These related forms may also be needed with the Indiana IT-65 Booklet.

Form Code Form Name
Form IT-65 Partnership Return Forms and Schedules

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Form Sources:

Indiana usually releases forms for the current tax year between January and April. We last updated Indiana IT-65 Booklet from the Department of Revenue in January 2024.

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IT-65 Booklet is an Indiana Corporate Income Tax form. Like the Federal Form 1040, states each provide a core tax return form on which most high-level income and tax calculations are performed. While some taxpayers with simple returns can complete their entire tax return on this single form, in most cases various other additional schedules and forms must be completed, depending on the taxpayer's individual situation, to create a complete income tax return package.

About the Corporate Income Tax

The IRS and most states require corporations to file an income tax return, with the exact filing requirements depending on the type of company.

Sole proprietorships or disregarded entities like LLCs are filed on Schedule C (or the state equivalent) of the owner's personal income tax return, flow-through entities like S Corporations or Partnerships are generally required to file an informational return equivilent to the IRS Form 1120S or Form 1065, and full corporations must file the equivalent of federal Form 1120 (and, unlike flow-through corporations, are often subject to a corporate tax liability).

Additional forms are available for a wide variety of specific entities and transactions including fiduciaries, nonprofits, and companies involved in other specific types of business.

Historical Past-Year Versions of Indiana IT-65 Booklet

We have a total of thirteen past-year versions of IT-65 Booklet in the TaxFormFinder archives, including for the previous tax year. Download past year versions of this tax form as PDFs here:


2023 IT-65 Booklet

IT-65 Partnership Return Booklet

2022 IT-65 Booklet

IT-65 Partnership Return Booklet


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