Pass-through entities: the affected business entity (ABE) election, owner reporting, composite filing, and nonresident withholding

# ABE election

Idaho’s affected business entity (ABE) election provides any partnership or S corporation the option of paying its Idaho income tax as a pass-through entity (PTE) at the corporate rate. This election allows each individual or company that’s a member of the partnership or S corporation to receive a credit against what they owe for Idaho income tax.
Key facts to know about ABE:

• The PTE can make the ABE election for any taxable year by selecting the election’s checkbox on a return.* All filing requirements, including extensions, also apply to ABEs.

# PTEs, owners, and reporting

The information below defines the reporting requirements for each pass-through owner type, with an emphasis on nonresident individuals. The PTE must include both the following items with its business income tax return:

• A completed Form PTE-12 , Idaho Schedule for Pass-Through Owners

# Resident and part-year resident individuals

These owners must report the income from the PTE on their Idaho income tax returns. The entity can’t include these owners in a composite filing, and these owners aren’t subject to withholding.

• Include information for resident and part-year resident individual owners on the Form PTE-12 . Enter R in the Filing Code column.

# Corporations, partnerships, trusts, and estates or Nonresident individual owners with Idaho distributable income of less than $1,000

These owners must report the income from the PTE on their Idaho returns if they have other reporting requirements. The entity can’t include these owners in a composite filing, and these owners aren’t subject to withholding.

• Include the information for corporations, partnerships, trusts, estates, and nonresident individuals with income of less than $1,000 on the Form PTE-12 . Enter N in the Filing Code column.

# Nonresident individual owners with Idaho distributable income of at least $1,000

A PTE has three options for its nonresident individual owners with Idaho distributable income of at least $1,000:

• Option #1: Form PTE-NROA , Idaho Nonresident Owner Agreement

# Other helpful PTE information

• Pass-through reporting requirements flowchart . This chart can help you determine the reporting requirements of a pass-through entity and its pass-through owners.
• Calculating Idaho Distributable Income
• Guaranteed Payments Guidance

# Forms and publications

• Form ID K-1 , Partner’s, Shareholder’s, or Beneficiary’s Share of Idaho Adjustment Credits
• Form PTE-12 , Idaho Schedule for Pass-Through Owners
• Form PTE-01 , Idaho Income Tax Withheld for an Individual Nonresident Owner of a Pass-Through Entity
• Form PTE-NROA , Idaho Nonresident Owner Agreement
• All business income tax forms and publications for the current year