41-175: Nonresident Member Composite Agreement 41-175 (2025)
Iowa · Iowa DOR · Used for tax years 2025
The 2025 IA Nonresident Member Composite Agreement records an agreement between a pass-through entity and its nonresident member to exclude the member from the entity’s IA PTE-C Composite Return tax payment. It includes the member’s tax compliance certifications and the entity’s
Who files this form
Use this agreement when a pass-through entity and its nonresident member agree to exclude the member from the entity’s IA PTE-C Composite Return tax payment for tax year 2025.
The form covers nonresident partners, members, shareholders, and beneficiaries. Both the nonresident member and an authorized representative of the pass-through entity must sign. The entity keeps the agreement rather than routinely submitting it to the Department.
What you'll need
Have the following information ready to complete the agreement:
- The pass-through entity’s type, name, FEIN, address, and phone number.
- The nonresident member’s name, FEIN or Social Security number, address, and phone number.
- The member’s classification for the certification in Part III.
- Signatures, printed names and titles, and dates for the nonresident member or authorized representative and the pass-through entity’s representative.
How to file
- Complete Part I with the pass-through entity’s information and Part II with the nonresident member’s information.
- In Part III, check the applicable certification box. Financial institutions organized as pass-through entities must check boxes 3 and 4.
- Have the nonresident member or authorized representative sign and date Part III, then provide the agreement to the pass-through entity.
- Have an authorized representative of the pass-through entity sign and date Part IV. For the tax year 2025 agreement to be effective, both signatures must be completed before the entity’s income tax return deadline.
- The entity must keep the agreement in its records and submit it to the Department only upon request. It must report the exclusion on its IA PTE-C Composite Return unless otherwise exempt from filing.
Common mistakes
- Missing the entity’s approval: The agreement is not valid without the pass-through entity’s acknowledgment and approval.
- Completing the agreement too late: The member must complete and sign it, then provide it to the entity for its signature before the entity’s income tax return deadline.
- Checking only one box for certain financial institutions: Financial institutions organized as pass-through entities must check both boxes 3 and 4.
- Submitting the agreement without a request: Keep it in the entity’s records and submit it to the Department only upon request.
- Reusing it for another tax year: This agreement is valid only for the pass-through entity’s tax year that begins in 2025.
Questions people ask
Does this agreement eliminate the member’s Iowa tax responsibilities?
No. The member agrees to file the applicable Iowa income or franchise tax return and make timely tax payments, including estimated taxes and, where applicable, composite taxes. The individual and estate or trust certifications include exceptions when income is below the applicable filing threshold and no return is required under the cited Iowa law.
How long is the agreement valid?
It is valid only for the pass-through entity’s tax year that begins in 2025.
Can the entity still be responsible if the member does not pay?
Yes. The entity agrees to remain jointly and severally liable for unpaid tax, penalties, and interest on the member’s share of pass-through income. Those amounts may be collected from the entity if the member does not follow the agreement’s terms.
What does the member agree to about Iowa’s authority to collect taxes?
The member agrees that they or their organization will be subject to personal jurisdiction in Iowa for collection of Iowa income and franchise taxes, plus related interest and penalties, on their share of income from the entity.