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DanielleCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 784
Experience:  Years of Experience in Business & Personal Taxes
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I have a K1 from an MLP. On the state part of the K1 it shows

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I have a K1 from an MLP. On the state part of the K1 it shows some income and it also shows my allocation of the state tax paid by the MLP. Can I reduce my state tax obligation by the this amount?

DanielleCPA :

Welcome and thanks for your question!

DanielleCPA :

If the MLP withheld state taxes on your behalf, then you may claim these withholdings on the applicable's state tax return.

DanielleCPA :

If the taxes are withholdings, you would be able to claim a credit for taxes paid to other states on your Oklahoma resident tax return.

DanielleCPA :

However, I think it is more likely that these state taxes do not represent withholdings and represent state taxes that the entity itself had to pay. Most states exempt PTPs from non-resident withholding requirements that may apply to other non-publicly-traded entities.

DanielleCPA :

I believe that the schedule you are referring to looks similar to this. If that is the case, then the taxes are not withholdings and you would not reduce your tax obligation by that amount.

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That is correct.

DanielleCPA :


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