PA-20S/PA-65 Schedule NRK-1: 2024 PA Schedule NRK-1 - Nonresident Schedule of Shareholder/Partner/Beneficiary Pass Through Income, Loss and Credits (PA-20S/PA-65 NRK-1) (2024)
Pennsylvania · Pennsylvania DOR · Used for tax years 2024
Pennsylvania Schedule NRK-1 reports a nonresident shareholder’s, partner’s, member’s or beneficiary’s share of pass-through income, losses and credits. It also reports Pennsylvania nonresident tax withheld, distributions and other owner information used to prepare Pennsylvania ta
Who files this form
The entity prepares Schedule NRK-1 for each nonresident owner with an ownership interest in a partnership, PA S corporation, estate, trust, or LLC classified as a partnership or S corporation for federal income tax purposes. This includes nonresident owners that are estates, trusts, other PA S corporations, disregarded entities, or partnerships.
Special rules apply to:
- Part-year PA S corporation shareholders: Prepare a separate NRK-1 for the portion of the year the shareholder was a nonresident.
- Individual partners: Prepare an NRK-1 if the partner was a nonresident at year-end, at death during the year, or when the partner disposed of their entire partnership interest.
- C corporation owners: The schedule does not need to be issued to C corporation taxpayers unless a credit from Schedule OC has been allocated.
Include each owner's schedule with the entity's PA-20S/PA-65 Information Return, give the owner a copy, and retain a copy in the entity's records.
What you'll need
Have the following information and supporting records available:
- The entity's PA-20S/PA-65 Information Return and Schedule D for the income, loss, and credit amounts carried to NRK-1.
- The owner's name, address, SSN or FEIN, and spouse's SSN if jointly held; the issuing entity's name, address, and FEIN.
- The shareholder's stock ownership percentage, or the partner's profit-sharing, loss-sharing, and capital ownership percentages.
- Records of nonresident tax withheld, distributions, guaranteed payments, depreciation, and the partner's year-end liabilities, as applicable.
Additional statements are required when applicable:
- Line 7 credits: List the credits passed through, the entity's name and FEIN, tax year, owner names, and owner tax identification numbers.
- Line 10 guaranteed payments: If payments cover more than one income class, provide a statement showing the amounts for each line.
- Line 14 economic investment: Provide a breakdown of permanent nontaxable income and nondeductible expenses, with the entity's name, FEIN, and tax year.
How to file
Submit Schedule NRK-1 with the entity's PA-20S/PA-65 Information Return. The text addresses both paper and electronically filed returns but does not provide a mailing address or electronic filing procedure. It refers filers to WHERE TO FILE in the PA-20S/PA-65 Information Return instructions.
Give each owner a copy to prepare their Pennsylvania tax or information return. Keep a copy in the entity's records. Amounts from NRK-1 must be reported on the appropriate Pennsylvania tax return.
To amend: Use a blank schedule for the tax year being corrected, fill in the “Amended Schedule” oval, and enter the corrected information. Submit it with an amended PA-20S/PA-65 Information Return. Do not send a copy of the original schedule.
Common mistakes
- Using cents: Enter whole dollars only.
- Submitting schedules on CD-ROM: The department will not process them. Each missing schedule may result in a $250 non-filer penalty.
- Sending an amended NRK-1 by itself: The amended PA-20S/PA-65 Information Return must accompany it.
- Using a disregarded entity's TIN as the owner's identification number: Use the beneficial owner's SSN or FEIN in the appropriate field. Provide the disregarded entity's FEIN separately in the owner portion of Section I.
- Including guaranteed payments on Line 1: Do not include them in that line's business income or loss.
- Deducting Line 15 again: The Section 179 amount is supplemental information only and has already been deducted from the applicable income class.
- Checking the fiscal-year oval for a 52/53-week filer: The instructions say not to check the fiscal-year oval in this case.
Questions people ask
Do I owe Pennsylvania tax if the entity did not distribute the income?
Nonresident individual owners are subject to Pennsylvania personal income tax on their share of the entity's Pennsylvania-source income, whether or not it was distributed.
How is a part-year resident PA S corporation shareholder's income divided?
Income and losses are prorated based on residency days. The shareholder receives both NRK-1 and RK-1 reflecting the proportionate shares for the nonresident and resident periods. Any day or partial day with a residence or domicile in Pennsylvania counts as a Pennsylvania residency day.
Does a partner prorate income after moving during the year?
A nonresident partner reports income based on residency status at year-end and does not prorate it. A partner who is a nonresident on the last day of the year receives an NRK-1 showing Pennsylvania-source income only. Separate rules address death or disposal of the entire partnership interest during the year.
Do entity owners receive both NRK-1 and RK-1?
Yes. The instructions state that entity owners receive both schedules. The income passes through to the final taxpayer, so entity owners need information about both total Pennsylvania taxable income and Pennsylvania-source taxable income.