The North Carolina Department of Revenue issued partnership tax guidance addressing recently enacted legislation that, among other tax law changes, expands eligibility for making North Carolina’s pass-through entity tax election to partnerships with partners that include an entity classified as a corporation for federal income tax purposes [see H.B. 259 (Session Law 2023-134), enacted into law without governor’s signature 10/3/23, and StateTaxMatters, Issue 2023-40, for more details on this legislation]. The guidance addresses the following important information:
An explanation of how a provision included in Session Law 2023-134 expanded the list of eligible partners for a partnership that is allowed to elect to be taxed for North Carolina income tax purposes at the partnership level (“Taxed Partnership Election”);
Information on a special provision included in Session Law 2023-134 that allows an eligible partnership to amend its North Carolina Partnership Income Tax Return for tax year 2022 to make the Taxed Partnership Election; and
Important reminders for partnerships that are eligible to make the Taxed Partnership Election for tax year 2022.
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