![]() An example of this related to some for-profit entities that provide low-income housing that receive funding through MassHousing or the United States Department of Housing and Urban Development. Upper-tier pass-through entities that can prove that a lower-tier pass-through entity has previously withheld and made payments of all Massachusetts tax, andĪnother type of entity exempt from pass-through entity withholding is an entity that is prohibited under federal or state law from withholding tax from distributions to members.Trusts and estates subject to withholding on nonresidents under another Massachusetts provision,.Members who have not certified to the pass-through entity that they agree to file their own tax return reporting the pass-through entity income, have not elected to participate in a composite return, or have not certified that they are otherwise exempt from withholding, will be subject to withholding on their distributive share by the pass-through entity, unless the entity itself is exempt from having to withhold.Ĭertain pass-through entities are exempt from pass-through entity withholding: Members electing to participate in a composite return aren’t subject to withholding by the pass-through entity filing the composite return. These members will file a separate tax return for any income not covered in a composite return. Members who choose to participate in a composite return may have other Massachusetts-source income in addition to their pass-through entity income. Members may not claim deductions, exemptions, or credits on the income reported on the composite return. The composite return will meet their filing and payment obligations as to their Massachusetts-source income from the pass-through entity. To participate, the members must be nonresidents for the entire tax year. Composite ReturnĪs an alternative to withholding on members, the pass-through entity may file a composite return on behalf of its individual nonresident members. These members aren’t subject to withholding by the pass-through entity. Accept personal jurisdiction in Massachusetts state courts for the determination and collection of taxes.Make their own quarterly estimated tax payments if required, and.File any required Massachusetts tax returns on their own for their income subject to tax in Massachusetts,.Individual members of a pass-through entity may certify to the pass-through entity that they agree to:
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