INDIANA – The Indiana Department of Revenue (DOR) is issuing a reminder to businesses and preparers about crucial compliance requirements for pass-through entities to avoid penalties during the upcoming extension filing season.
Pass-through entities, which include corporations, partnerships, estates, or trusts, are required to include all nonresident partners, shareholders, or beneficiaries in their composite returns, even if the entity is reporting a loss. Failure to do so will result in an automatic $500 penalty per pass-through entity.
To avoid this penalty, the DOR recommends the following steps:
- Ensure that the number of nonresidents reported in the header of the return matches the total number of nonresident entity owners listed on all relevant schedules (Schedule Composite, Schedule PTET, and/or Schedule Composite-COR).
- The appropriate schedule(s) must be included with the return and be completely filled out with the individual’s Social Security Number (SSN) and/or the corporate entity’s Federal Employer Identification Number (FEIN).
- These schedules are required regardless of whether the entity has income or a loss.
Additionally, the DOR reminds partnerships and S corporations that have elected or plan to elect the Pass-Through Entity Tax (PTET) for the 2025 tax year that quarterly estimated payments are required. The payment schedule for 2025 is as follows:
- April 21, 2025
- June 20, 2025
- September 22, 2025
- December 22, 2025
