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In the landscape of tax obligations, the Nebraska 12N form emerges as a pivotal document for nonresidents earning income within the state's borders. Tailored for individuals who were not residents of Nebraska during the taxable year, this form encapsulates an agreement between nonresident individuals—spanning from members of estates or trusts to partners in various organizational structures—and the state of Nebraska. The essence of the Form 12N lies in its requirement for nonresidents to declare their income derived from Nebraska sources, ensuring the timely filing of a Nebraska Individual Income Tax Return (Form 1040N) and the settlement of any resultant tax dues. Furthermore, this form spells out the obligations of entities such as estates, trusts, partnerships, S corporations, and certain limited liability companies (LLCs) in detailing the tax year and the nonresident's portion of income attributable to Nebraska operations. Critical deadlines are set forth for these organizations, underlining the necessity for punctuality in submissions to avoid the mandatory withholding of a portion of the nonresident’s income at a flat rate. Additionally, the procedure offers a pathway to rectify oversight by allowing nonresidents to claim refunds under specific conditions. The Form 12N stands as a testament to Nebraska’s methodical approach to tax administration, presenting a structured process to ensure that nonresidents contribute their fair share to the state's coffers, while delineating clear steps for compliance and potential remuneration.

Example - Nebraska 12N Form

Nebraska Nonresident Income Tax Agreement

FORM 12N

2013

Type of Organization (Check only one.)

 

 

 

 

 

PLEASE DO NOT WRITE IN THIS SPACE

Estate or Trust

Limited Liability Company

Partnership

S Corporation

 

 

 

 

 

 

 

 

 

 

 

 

Taxable Year of Organization

 

 

 

 

 

 

 

 

 

Beginning

 

 

, 20

 

and Ending

 

, 20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonresident’s Taxable Year Including Organization’s Year End

 

 

 

 

 

Beginning

 

 

, 20

 

and Ending

 

, 20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonresident Individual’s or

Nonresident Grantor’s Name and Mailing Address

Type or Print

Name

 

 

 

 

 

 

 

Please

Street or Other Mailing Address

 

 

 

 

 

 

 

 

City

 

State

Zip Code

Social Security Number

 

Spouse’s Social Security Number

 

 

 

 

 

 

Internal Revenue Service Center Where Nonresident Individual’s Federal Return is Filed

Organization’s Name and Mailing Address

Name Doing Business As (dba)

Legal Name

Street or Other Mailing Address

City

 

State

Zip Code

Nebraska ID Number

 

Federal ID Number

 

 

 

 

 

 

 

 

 

 

 

sign here

I declare that I was a nonresident of Nebraska for the tax year shown above, and agree that I will: timely file a Nebraska Individual Income Tax Return, Form 1040N; pay any income tax due; and that I will include in Nebraska adjusted gross income the portion of the above-named organization’s Nebraska income attributable to my interest in that organization for the taxable year that includes the year end date of the organization.

This Agreement shall be binding upon my heirs, representatives, assignees, successors, executors, and administrators.

Signature of Nonresident Beneficiary, Member, Partner, or Shareholder

Date

Instructions

Who May File. Any individual taxpayer who was a nonresident of Nebraska during any part of the organization’s taxable year may complete Form 12N. A nonresident individual taxpayer includes a nonresident grantor of a grantor trust.

When and Where to File. A signed and dated Form 12N must be completed each year and delivered to the organization prior to the iling of the organization’s Nebraska income tax return. The due date for the Nebraska income tax return for

estates, trusts, partnerships, and certain limited liability companies (LLCs) is the 15th day of the fourth month following the close of the taxable year. The due date for the Nebraska income tax return of an S corporation and certain LLCs is the 15th

day of the third month following the close of the taxable year.

If Form 12N is Filed. The nonresident individual who has iled the Form 12N is required to timely ile a Nebraska

Individual Income Tax Return, Form 1040N. This return must report tax on the nonresident’s share of the organization’s

Nebraska income attributable to his or her interest in the organization during the taxable year, as well as any other income the nonresident has earned from Nebraska sources.

A nonresident individual taxpayer who has a taxable year different from the taxable year shown on the Form 12N for the estate, trust, S corporation, partnership, or LLC, must report the income on a Form 1040N that includes the tax year end

date of the organization.

If Form 12N is Not Completed and Filed. If Form 12N is not properly completed and attached to the organization’s return for a nonresident individual, the organization is required to remit 6.84% of the nonresident’s share of the organization’s income derived from, or attributable to, Nebraska sources. The income tax withholding must be remitted with the Nebraska Schedule K-1N - Shareholder's Share of Income, Deductions, Modiications, and Credits, and the organization’s Nebraska return. When the nonresident individual iles Form 1040N, the amount submitted by the organization will be allowed as a

credit against the individual taxpayer’s Nebraska income tax liability.

If the nonresident has no other Nebraska source income and the organization has iled a Schedule K-1N and remitted the appropriate income tax withholding for the nonresident, the nonresident is not required to ile Form 1040N. The income tax withholding will be retained by the state. Any nonresident may still ile a return and claim a refund if one is due.

Publicly-traded partnerships are not subject to the income tax withholding provision stated above.

Attach this agreement to the organization’s Nebraska income tax return.

revenue.nebraska.gov, 800-742-7474 (NE and IA), 402-471-5729

8-065-2013

Click for PDF Form

Document Breakdown

Fact Name Description
Purpose of Form 12N This form is an agreement for nonresidents of Nebraska, confirming their commitment to file a Nebraska Individual Income Tax Return (Form 1040N) and pay taxes on income earned from Nebraska sources for the tax year.
Eligible Filers Nonresident individuals of Nebraska, including nonresident grantors of grantor trusts, who earned income from an organization operating within Nebraska during the taxable year.
Due Dates for Filing Form 12N must be delivered to the organization before it files its Nebraska income tax return. The specific due date varies by the type of organization, generally the 15th day of the fourth month after the organization's tax year ends for estates, trusts, partnerships, and certain LLCs, and the 15th day of the third month for S corporations and certain other LLCs.
Requirement if Form 12N is Filed Upon filing Form 12N, the nonresident must file Form 1040N, reporting their share of the organization’s Nebraska income and any other Nebraska-source income.
Consequences of Not Filing Form 12N If not filed, the organization must withhold 6.84% of the nonresident's Nebraska-source income and remit it with the Nebraska income tax return. This amount can be credited against the nonresident's Nebraska income tax liability when they file Form 1040N.
Governing Law The requirements and procedures for Form 12N are governed by Nebraska state tax law, specifically as it pertains to nonresident income tax liability and compliance.

Steps to Writing Nebraska 12N

Filing Nebraska Form 12N, the Nonresident Income Tax Agreement, is a necessary step for every nonresident who earns income from a Nebraska entity and seeks to comply with state tax laws. This form plays a critical role in how income earned in Nebraska by nonresidents is reported and taxed. It not only facilitates the right tax treatment of such income but also affects how nonresidents complete their tax obligations. Let's navigate through the steps required to complete this form accurately and ensure that all information is presented clearly.

  1. Type or Print the Nonresident Individual’s or Grantor’s Name and Mailing Address: Clearly fill in the name and the mailing address, including street or other mailing address, city, state, and zip code.
  2. Enter Social Security Numbers: Provide the Social Security Number (SSN) of the nonresident individual or grantor. If married and filing jointly, include the spouse’s SSN as well.
  3. Specify the Type of Organization: Check only one box to indicate the type of organization from the options provided - Estate or Trust, Limited Liability Company, Partnership, or S Corporation.
  4. Fill in the Taxable Year Information: Enter the beginning and ending dates of the taxable year for both the organization and the nonresident individual. These dates might differ, so ensure accuracy.
  5. Organization’s Name and Address: Type or print the organization’s name, doing business as (DBA) name, if applicable, and the mailing address, including the street, city, state, and zip code.
  6. Provide Tax Identification Numbers: Enter both the Nebraska ID Number and the Federal ID Number of the organization.
  7. Indicate the IRS Center: Specify the Internal Revenue Service Center where the nonresident individual’s federal return is filed.
  8. Agreement and Signature: Read the agreement at the bottom of the form carefully. By signing, you confirm that you were a nonresident of Nebraska for the tax year indicated, agree to file a Nebraska Individual Income Tax Return (Form 1040N), and to pay any due income tax. This agreement also extends to the specified heirs and representatives. Sign and date the form.

After completing Form 12N, it's crucial to deliver it to the organization concerned before the organization files its Nebraska income tax return. The timing is key here — the form must be submitted each year as part of compliance. Should there be discrepancies or a failure to file, it could result in the organization being responsible for withholding a percentage of the income for tax purposes, a situation that ideally both parties would prefer to avoid. Thus, accurate and timely submission of Form 12N benefits all involved by ensuring proper income reporting and tax treatment under Nebraska state laws.

FAQ

What is the Nebraska 12N Form?

The Nebraska 12N Form, known as the Nebraska Nonresident Income Tax Agreement, is a document that nonresident individuals of Nebraska associated with certain types of organizations - such as estates, trusts, S corporations, partnerships, and some limited liability companies (LLCs) - must complete. This form demonstrates the individual's commitment to file a Nebraska Individual Income Tax Return (Form 1040N), pay any applicable income tax, and include in their Nebraska adjusted gross income any income attributed to their interest in the specified organization for the tax year.

Who needs to file the Nebraska 12N Form?

Any individual taxpayer who was a nonresident of Nebraska during any part of the taxable year of the organization stated on the form needs to file the Nebraska 12N Form. This includes nonresident grantors of a grantor trust. Essentially, if an individual has income from an organization that operates in Nebraska and is one of the organization types listed, they are required to complete this agreement.

When and where should the Nebraska 12N Form be filed?

The Nebraska 12N Form should be signed, dated, and delivered to the associated organization before the filing of the organization's Nebraska income tax return. For estates, trusts, partnerships, and some LLCs, the due date is the 15th day of the fourth month following the end of the taxable year. For S corporations and certain LLCs, the deadline is the 15th day of the third month following the close of the taxable year. The completed form should be attached to the organization’s Nebraska income tax return upon submission.

What happens if the Nebraska 12N Form is not filed?

If a nonresident fails to complete and submit the Form 12N, the organization they're associated with is mandated to withhold 6.84% of the nonresident's share of the organization’s Nebraska-sourced income. This withheld amount must be remitted with the Nebraska Schedule K-1N and the organization's Nebraska income tax return. The withheld taxes will be credited against the nonresident individual's Nebraska income tax liability when they file Form 1040N. If there's no other Nebraska source income and taxes have been withheld properly, the nonresident may not be required to file a return, unless they seek a refund.

Can individuals with different taxable years from the organization file Form 12N?

Yes, if an individual taxpayer has a taxable year that differs from the organization’s taxable year, they are still required to file Form 12N. When reporting the income on their Nebraska Individual Income Tax Return (Form 1040N), it should include the organization's year-end date to properly align the reported income with the correct tax period.

Is there any scenario where a nonresident doesn't need to file a Nebraska return?

Yes, if the organization has fulfilled its obligation by filing a Schedule K-1N and remitting the appropriate income tax withholding for the nonresident's Nebraska-sourced income, and the nonresident has no other Nebraska source income, they are not required to file Form 1040N. However, any nonresident can file a return to claim a refund if one is due. Notably, publicly traded partnerships are exempt from the income tax withholding requirement outlined for other organizations.

Common mistakes

Filling out the Nebraska 12N form, officially known as the Nebraska Nonresident Income Tax Agreement, is a critical step for nonresident individuals to ensure they are in compliance with state tax regulations. However, misunderstandings or errors in filling out this form can lead to complications or delays. Here are five common mistakes to avoid:

  1. Selection of the wrong type of organization: One initial mistake is incorrect selection of the organization type, such as confusing an S corporation with a Limited Liability Company (LLC). This mistake can lead to incorrect processing and affect the individual’s tax calculations.
  2. Inaccurate Taxable Year reporting: The form requires details about the taxable year for both the organization and the nonresident individual. Misalignment in the dates or incorrect entries can result in rejection or the need for amendment, as these dates are crucial for determining the period of income reported.
  3. Incorrect Social Security and Nebraska ID numbers: Another error is entering incorrect Social Security Numbers (SSN) or Nebraska ID numbers. This directly impacts the verification and processing of the form, potentially leading to delays or identity verification issues.
  4. Failure to sign and date the form: A seemingly simple but frequently overlooked requirement is the need to sign and date the form. An unsigned or undated form is deemed incomplete and will not be processed, delaying compliance and potentially leading to penalties.
  5. Not attaching to the organization’s tax return: Finally, failing to attach the completed Form 12N to the organization’s tax return as required results in the form not being processed in the context of the organization’s filed return. This oversight can cause incomplete tax compliance for the nonresident individual.

By paying close attention to these details, nonresident individuals can avoid common pitfalls when completing the Nebraska 12N form. Successfully navigating these challenges ensures compliance with Nebraska’s tax requirements and aids in the efficient processing of nonresident income tax agreements. Remember, it is always advisable to review the form thoroughly before submitting it and consult with a tax professional if there are questions or complexities in your tax situation. Understanding the nuances of state tax laws can be tricky, but careful attention to the specifics of tax forms like the Nebraska 12N can prevent unnecessary complications.

Documents used along the form

When dealing with the Nebraska Nonresident Income Tax Agreement, also known as Form 12N, there are several other forms and documents that individuals often need to be aware of to ensure compliance and precision in their tax filings. Each of these documents plays a unique role in the broader scope of tax preparation, affecting different aspects of the tax process for nonresidents and those with interests in various types of organizations within Nebraska.

  • Form 1040N: Nebraska Individual Income Tax Return. This is the primary form nonresident individuals use to report their income tax to Nebraska. It's detailed to include income, adjustments, tax credits, and payments specific to the state's requirements.
  • Schedule K-1N: Shareholder's Share of Income, Deductions, Modifications, and Credits. Much like its federal counterpart, this form reports the nonresident's share of income or loss from partnerships, S corporations, or trusts operating within Nebraska, influencing the individual's tax liability.
  • Form 1065N: Nebraska Partnership Return of Income. Required for partnerships operating in Nebraska, this document reports the entity's income, gains, losses, deductions, and credits to the state.
  • Form 1120-SN: Nebraska S Corporation Income Tax Return. Similar to Form 1065N but specific to S corporations, this form is essential for reporting the corporation’s financial activities and determining the tax owed to Nebraska.
  • Form 1041N: Nebraska Fiduciary Income Tax Return. This is used by estates or trusts to report income, deductions, and other relevant financial information to Nebraska, which can then affect the tax responsibilities of nonresident beneficiaries.
  • Nebraska Schedule K-1: Beneficiary's Share of Income, Deductions, Modifications, and Credits. It shows the beneficiary's allocated share of an estate's or trust's income and other tax items within Nebraska, serving a similar purpose to Schedule K-1N but from a different entity perspective.
  • Extension Form: Application for Automatic Extension of Time to File Nebraska Individual Income Tax Return. This document is critical for those who need more time to file their Form 1040N, ensuring they avoid penalties while they gather necessary information.

Compiling all necessary documents and forms, such as those mentioned above, plays a crucial role in fulfilling tax obligations accurately. Having a comprehensive understanding of each document’s purpose helps smoothen the tax filing process, ensuring individuals meet their responsibilities without overlooking crucial details. Individuals working with these forms are encouraged to seek guidance as needed and stay informed about any changes to state tax laws that may affect their filings.

Similar forms

The Nebraska 12N form is similar to other tax documents that nonresident individuals or entities must file in various contexts, specifically when they have income associated with a state in which they do not reside. These documents often serve the purpose of declaring income received and ensuring compliance with state tax laws. Each document, while tailored to the requirements of different states or circumstances, shares the objective of reporting and managing tax responsibilities for nonresident income.

The Nebraska 12N form and the California Form 540NR share similarities in that both are designed for nonresidents to report income earned within the respective states. The California 540NR, much like the Nebraska 12N, allows individuals who are not residents of California but have earned income from California sources during the taxable year to calculate and report their state income tax. Both forms require detailed information about the income earned, personal information of the filer, and calculations to determine the amount of tax owed based on the income attributable to the state's sources.

Comparing the Nebraska 12N form with the New York IT-203 form, one notices that both serve nonresidents who need to report their income and calculate state taxes owed. The New York IT-203 form is used by individuals who are not residents of New York but have earned income from New York sources. Similar to the Nebraska 12N, this form includes sections for reporting the taxpayer's income, tax deductions, and credits applicable to reduce the tax liability associated with New York-sourced income. Both forms play a crucial role in ensuring that nonresidents contribute to the tax revenues of the states where they earn their income, despite not residing in those states.

Dos and Don'ts

When filing the Nebraska 12N form, it's crucial to follow specific guidelines to ensure the process is smooth and error-free. Here are the dos and don'ts that one should keep in mind:

Do:
  • Clearly indicate the type of organization by checking the appropriate box at the beginning of the form. This helps in identifying the nature of your organization and processes your form accordingly.
  • Provide accurate information regarding your nonresident status, including your name, mailing address, and Social Security Number (SSN). Inaccurate or incomplete information can delay processing.
  • Include the organization’s name and mailing address as registered, ensuring that the form is correctly associated with the organization in question.
  • Ensure the form is signed and dated. Without your signature and the date, the form is considered incomplete and will not be processed.
  • Attach the form to the organization’s Nebraska income tax return before it’s filed. This step is crucial for the form to be processed in the context of the organization’s overall tax obligations.
  • File the form on time, adhering to the due dates specified in the instructions to avoid penalties for late submission.
  • Retain a copy for your records. Keeping a record of your filed Form 12N can be useful for future reference or in case of queries from the Nebraska Department of Revenue.
Don't:
  • Fill in the space marked “PLEASE DO NOT WRITE IN THIS SPACE”. This area is reserved for official use and any information entered here can result in processing delays.
  • Check more than one type of organization. Only one box should be checked that accurately represents the type of your organization to avoid confusion.
  • Leave any sections blank, especially those requiring personal or organizational details. Unanswered questions can lead to incomplete form status.
  • Submit the form without verifying the information. Double-check for any mistakes or inaccuracies before submission.
  • Forget to attach the required documents. Form 12N needs to be attached to the organization’s tax return; failing to do so can lead to non-compliance issues.
  • Ignore the specific filing instructions regarding when and where to file, as doing so can result in penalties or the form being rejected.
  • Assume completion of Form 12N negates the need to file a Form 1040N if applicable. Nonresidents must still file their individual income tax returns as required.

Misconceptions

Understanding the Nebraska Nonresident Income Tax Agreement, or Form 12N, is crucial for nonresident individuals, grantors, and beneficiaries with income from Nebraska sources. However, there are common misconceptions that need clarification to ensure proper compliance and avoid potential legal pitfalls:

  • Misconception 1: Form 12N is only for individuals. Fact: While primarily designed for nonresident individuals, Form 12N must also be completed by nonresident grantors of a grantor trust, indicating its broader applicability.
  • Misconception 2: It’s unnecessary to file Form 12N if you don’t owe income tax. Fact: Nonresident individuals must file Form 12N to report their share of an organization’s Nebraska income, regardless of their overall tax liability.
  • Misconception 3: Once filed, Form 12N covers all future tax years. Fact: Form 12N must be completed and submitted each year, in line with the specific taxable year of the organization and the nonresident’s involvement.
  • Misconception 4: Form 12N substitutes the Nebraska Individual Income Tax Return, Form 1040N. Fact: Filing Form 12N is a prerequisite that allows nonresidents to then properly file Form 1050N to report and pay tax on their Nebraska income.
  • Misconception 5: Withholding obligations are waived by filing Form 12N. Fact: If Form 12N is not filed, the organization is responsible for withholding 6.84% of the nonresident's Nebraska-sourced income, not eliminating the need for careful compliance.
  • Misconception 6: Nonresidents without other Nebraska income need not file Form 12N. Fact: Even if the nonresident has no other Nebraska income, filing Form 12N can be essential, especially to claim refunds or report specific income types.
  • Misconception 7: Filing deadlines are the same for all entities. Fact: The deadline for filing depends on the type of organization, with estates, trusts, certain LLCs, partnerships, and S corporations having different filing due dates.
  • Misconception 8: Form 12N’s filing alleviates the organization from filing a Nebraska income tax return. Fact: Organizations must still file their Nebraska income tax return and include any completed Form 12Ns with their submission.
  • Misconception 9: All partnerships are subject to the nonresident withholding. Fact: Publicly traded partnerships are exempt from the income tax withholding requirement specified for nonresident income, highlighting an exception in the general rule.
  • Misconception 10: The nonresident's tax liability is final with the organization's withholding. Fact: The withheld amount is credited against the individual’s tax liability when they file Form 1040N, potentially leading to a refund if the withholding exceeds the actual tax owed.

It’s imperative for nonresidents earning income from Nebraska sources to fully understand the requirements and implications of Form 12N. Ensuring accurate and timely filing can avoid unnecessary penalties and secure compliance with Nebraska tax laws.

Key takeaways

Filling out and using the Nebraska 12N form is crucial for nonresidents involved with certain organizations within the state. Here are key takeaways to ensure compliance and understanding:

  • Eligibility: Any nonresident of Nebraska during any part of the taxable year of an estate, trust, S corporation, partnership, or limited liability company (LLC) can file Form 12N. This includes nonresident grantors of a grantor trust.
  • Filing Requirement: To comply with Nebraska tax law, nonresident individuals must complete and submit Form 12N each year before the organization's tax return is filed.
  • Due Dates: The form must be delivered to the organization ahead of the Nebraska income tax return, which varies by entity type but generally falls on the 15th day of the fourth or third month following the close of the taxable year.
  • Tax Reporting: Upon filing Form 12N, nonresidents are obligated to file a Nebraska Individual Income Tax Return, Form 1040N, to report their share of the organization's Nebraska income and any other Nebraska-sourced income.
  • Income Alignment: If a nonresident's tax year differs from the organization's, the Form 1040N must cover income for the period matching the organization's tax year end date.
  • Withholding Requirements: Without a completed Form 12N, organizations must withhold 6.84% of the nonresident's income derived from Nebraska sources and submit it with the organization's tax return. This withholding serves as a credit against the nonresident's Nebraska income tax liability.
  • Exemption Conditions: If the correct withholding is submitted on behalf of the nonresident with no other Nebraska income, the nonresident is not mandated to file Form 1040N unless a refund is sought. This does not apply to publicly traded partnerships.
  • Contact Information: For further clarification or assistance, individuals can visit revenue.nebraska.gov or contact the Nebraska Department of Revenue directly via phone.

Adherence to these guidelines ensures compliance with Nebraska tax obligations for nonresident individuals involved in partnerships, LLCs, trusts, and other entities requiring the completion of Form 12N.

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