Neb. Admin. Code § 316-23-007 — Nonresident Beneficiaries - Agreements to Pay - Withholding from Beneficiary

007.01 Nebraska Nonresident Income Tax Agreement. A nonresident beneficiary deriving Nebraska taxable income from a trust or estate is required to execute and forward to the trust or estate a Nebraska Nonresident Income Tax Agreement, Form 12N, which states that the nonresident will file a Nebraska income tax return and pay tax on all income derived from or connected with Nebraska sources. This agreement should be forwarded to the trust or estate before the original due date of the fiduciary return which is the 15th day of the fourth month following the close of its taxable year. The fiduciary shall attach the completed Form 12N to the fiduciary return. Any nonresident who files Form 12N to avoid withholding must file a Nebraska income tax return. 007.02 Nonresident Withholding. In the absence of the above agreement, the estate or trust shall withhold and remit to the Nebraska Department of Revenue an amount equal to the highest individual income tax rate multiplied by the nonresident beneficiary's share of distributable income which was derived from or attributable to Nebraska sources. The fiduciary must report the amount withheld from each beneficiary on a Statement of Nebraska Income Tax Withheld for Nonresident Individual, Form 14N, with one copy attached to the fiduciary return. The full amount of the withholding is, at the taxpayer's option, retained in lieu of the filing of an income tax return. Any nonresident who so desires can still file a return and claim a refund if there is one due. When a trust or estate has made a remittance to the Nebraska Department of Revenue on behalf of a nonresident beneficiary, the nonresident beneficiary will be allowed his or her share of the remittance made by the trust or estate as a credit against his or her Nebraska income tax liability. (Section 77-2717, R.R.S. 1996. November 11, 1998.)