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Hello , my name is Alex, a licensed CPA. Happy to help you get this resolved.
South Carolina income taxable to nonresident partners is subject to withholding by the partnership at a 5% rate. Nonresident partners providing affidavits of their intention to file or who are included in a composite return filed by the partnership on behalf of all of its nonresident partners are exempt from the withholding requirement.
What the above statement means is that SC provides 3 options in terms of withholding for Non-Resident Partners
1. Partnership can decide to withhold 5% of your allocable share of income – this is because you’re not considered to be a resident of SC, but since the income you’re receiving is SC sourced income, they have the right to tax or withhold taxes.
2. You can do away with (1) by providing an affidavit or some kind of letter to the partnership that you will be filing a SC Non-Resident personal tax return at the end of the year.
3. The 3rd option is to have the partnership file a composite return, in this case the partnership, will file a return on behalf of all of its nonresident members to report and remits the SC income tax of the nonresident members. This option eliminates (1) & (2)
Hello , thanks for the quick response, when you do your withholding , which state do you pay your withholding to ?
Is this the same llc that is engaged in the flipping ? , and who is requesting for the withholding , the title company ?
Yes , please call them . I believe there is a confusion somewhere. If you are already doing a withholding for the same LLC , no need to do another or additional withholding.
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