Schedule Composite (Form IT-20S, IT-65, IT-41)

This article provides a comprehensive, step-by-step guide to understanding and completing Schedule Composite. It ensures entities can accurately report and pay Indiana adjusted gross income tax on behalf of their non-resident partners, shareholders, or beneficiaries.

Schedule Composite is a tax form issued by the Indiana Department of Revenue and used by entities such as partnerships, S corporations, and trusts or estates to report and pay Indiana adjusted gross income tax on behalf of their non-resident partners, shareholders, or beneficiaries. This form is prepared alongside other entity-level tax filings (e.g., Form IT-20S, IT-65, or IT-41) and ensures that non-residents fulfill their Indiana tax obligations without having to file individual returns. It allows entities to calculate and report the pro rata share of Indiana income, state tax, pass-through entity tax, and county tax attributable to each non-resident. By consolidating this information, Schedule Composite simplifies the tax compliance process for both entities and non-resident individuals.

How to File Schedule Composite

To properly file Schedule Composite, follow these steps:

  1. Prepare the Entity’s Tax Return: Complete the entity’s primary Indiana tax return, such as Form IT-20S (S corporation), IT-65 (partnership), or IT-41 (trust or estate). The totals from Schedule Composite will flow into these forms.
  2. Attach Schedule Composite: Schedule Composite must be enclosed with the respective tax return when filing.
  3. Provide Additional Sheets If Necessary: If there are more non-resident partners, shareholders, or beneficiaries than the space allows, use additional Schedule Composite sheets and carry totals forward.
  4. File Electronically or by Mail: Submit the completed tax return, including all attached schedules. Ensure to follow Indiana Department of Revenue guidelines for electronic filing if required.
How to Complete Schedule Composite

How to Complete Schedule Composite

Below is a detailed, line-by-line guide to completing Schedule Composite.

Entity Information

  1. Entity’s Name: Enter the legal name of the entity (e.g., partnership, S corporation, or trust/estate).
  2. Federal Employer Identification Number (FEIN): Input the entity’s unique nine-digit Federal Employer Identification Number.
  3. Tax Year: Specify the entity’s tax year beginning and ending dates. Enter the year 2025 or the applicable fiscal year.

Part 1 – Reporting Non-Resident Individuals/Entities

For each non-resident partner, shareholder, or beneficiary, complete the following:

  1. Column A: Individual/Non-Corporate Entity Social Security Number or FEIN
    • Enter the Social Security Number (SSN) or Federal Employer Identification Number (FEIN) for each non-resident individual or non-corporate entity listed.
    • Ensure accuracy, as this information identifies the taxpayer.
  2. Column B: Exception Code
    • Enter the applicable exception code, if any, for each non-resident. Refer to the instructions provided with the form for the list of exception codes that may apply.
    • Leave this column blank if no exception applies.
  3. Column C: State of Residency
    • Input the two-character postal abbreviation for the state of residency of each non-resident.
    • For example, enter “OH” for Ohio or “IL” for Illinois.
  4. Column D: Adjusted Gross Income (AGI)
    • Report the non-resident’s Indiana adjusted gross income (AGI) attributed to them by the entity.
    • For this, refer to IT-20S/IT-65 Schedule IN K-1, Part 4, Line 9, or IT-41 Schedule IN K-1, Part 4, Line 9.
    • If the AGI is less than zero, leave this column blank.
  5. Column E: State Tax
    • Multiply the amount in Column D by 0.03 (3%). This represents the Indiana state tax owed for each non-resident’s share of income.
    • For tax years ending in 2026, use 0.0295 (2.95%) instead of 0.03. Leave blank if the result is less than zero.
  6. Column F: Pass-Through Entity Tax (PTET)
    • Enter the total amount of pass-through entity tax attributed to the non-resident.
    • This amount should come from Schedule PTET.
  7. Column G: County Tax
    • Calculate the non-resident’s county income tax liability. Refer to the instructions for determining the applicable county tax rate.
    • Enter the total tax liability for each non-resident after subtracting Column E from Column D and adding Column F.
    • If Column E exceeds Column D, enter the value of Column F. Leave this column blank if the result is less than zero.

Subtotal and Totals

  1. Line 13: Subtotal Columns D, E, F, and G
    • Add up all amounts for Columns D, E, F, and G for each listed non-resident and enter the totals on Line 13.
  2. Line 14: Carryover Totals from Additional Sheets
    • If you used additional Schedule Composite sheets, carry over the totals from Columns D, E, F, and G on those sheets and enter them here.
  3. Line 15: Total Tax
    • Add the totals from Line 13 (Column G) and Line 14 (Column G).
    • Enter this amount on the appropriate line of the entity’s tax return:
      • Line 15 of Form IT-20S
      • Line 6a of Form IT-65
      • Schedule 1, Line 2 of Form IT-41.
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