Key takeaways
- An S corporation, including an LLC taxed as one, that does business in North Dakota or has North Dakota-source income files Form 60.
- The state return is due April 15, a month after the federal Form 1120-S, and the state extension runs to the same date as the federal extension.
- Withholding applies to each nonresident shareholder whose distributive share of North Dakota income is greater than $1,000, and it is paid with the return, not at year end.
- I found no North Dakota pass-through entity tax election, so do not plan a SALT cap workaround there without confirming with the state.
Who files Form 60
The North Dakota Office of State Tax Commissioner says a subchapter S corporation that carries on business or derives gross income from North Dakota sources must file Form 60, the S Corporation Income Tax Return. An LLC that is taxed as an S corporation federally is treated the same way. The trigger is North Dakota activity, not incorporation, so a Minnesota S corporation with a crew on a job in Williston has a filing question.
Form 60 reports income or loss to every nonresident individual, estate or trust shareholder. It also reports to qualified subchapter S trust and electing small business trust shareholders that have a nonresident individual or estate beneficiary. All income from the S corporation's activity is business income subject to apportionment, and North Dakota does not allow separate accounting, so you apportion the whole result instead of sourcing line items one at a time.
Due date and extension for tax year 2026
Form 60 is due by April 15. For a calendar-year client the tax year 2026 return is therefore due April 15, 2027, while the federal Form 1120-S is due on the 15th day of the third month, March 15, 2027. For the 2025 return the IRS instructions moved the federal date to March 16, 2026 because March 15 fell on a Sunday, so check the weekday before you promise a client a date.
North Dakota says the extension of time to file for S corporations and partnerships runs to the same date as the automatic federal extension, and that extensions are obtained with Form 7004. The IRS says that automatic extension is generally six months. You do not need to attach the federal extension to the state return, but you check the extension box and keep a copy in case the state asks. Corporations filing with Form 40-EXT must attach it, so do not apply this rule to a C corporation client.
An extension moves the filing date only. The state says payment and the voucher are due on or before April 15, and S corporations use Form 60-EXT for an extension payment. Form 7004 itself does not extend the time to pay.
Nonresident withholding: the threshold, the rate and a worked example
The S corporation must withhold for each nonresident shareholder whose distributive share of North Dakota income is greater than $1,000. The test is the size of the share of North Dakota income, not the size of the tax. No withholding is required when the share is less than $1,000. The state's S corporation page states a rate of 2.5% on the year-end distributive share and also says the rate for each year is set in the Form 60 instructions, so take the percentage from the 2026 instructions when they publish and not from last year's file.
Worked example at 2.5%. A Montana shareholder with a 40 percent interest in a company whose apportioned North Dakota income is $150,000 has a $60,000 share, so withholding is $1,500. A second nonresident with a $900 share has none. The state says withholding is paid in full with the return when it is filed, so put the total on the April cash forecast.
Withholding reaches nonresident individuals, nonresident trusts, nonresident grantor trusts and passthrough entities whose commercial domicile is outside North Dakota. An S corporation cannot withhold on behalf of a C corporation or an exempt organization. If your client received a Form 1099-MISC or a North Dakota Schedule K-1 showing withholding, claim it on line 5, page 1 of Form 60, or enter the withholding source when e-filing.
Ways a nonresident shareholder avoids or adjusts withholding
Composite filing is the first route. The state says no withholding is required when a nonresident shareholder elects to be included in a composite filing by the S corporation instead of filing a North Dakota return. I could not verify the composite mechanics, so read the 2026 Form 60 instructions before offering this to a client.
Form PWE is the second. A nonresident passthrough entity shareholder, for example a holding LLC or a partnership, may elect to exempt its distributive share from withholding, and the election stays in effect until the entity revokes it.
Form PWA is the third. A nonresident individual who meets the qualifying conditions on the form completes it to adjust the withholding.
Is there an entity-level election?
A March 2025 CBIZ article lists North Dakota among five states with a personal income tax on pass-through income that had not adopted a pass-through entity tax, alongside Delaware, Maine, Pennsylvania and Vermont. The state's list of S corporation forms for 2025 and 2026 shows Form 60, Form 60-PV, Form 60-EXT, Form 60-ES, Form 60-EPV and Schedule K-1 (Form 60), and no election form.
That is not a statement of North Dakota law, and I did not confirm it against the legislature. Check the 2026 instructions before telling an owner there is no workaround.
Filing mechanics and penalties
For tax years 2022 and after, an S corporation with 10 or more owners must file and pay electronically, and payments can be made through ND TAP. Estimated payments are not required, but a client expecting tax can use Form 60-ES, and a balance due with the return goes in with Form 60-PV. On an amended return, mark the amended box on Form 60 and attach the amended federal return if there is one.
Late penalties are mostly federal and easy to forget. For the 2025 return the IRS instructions list $255 for each month or part of a month, up to 12 months, multiplied by the number of shareholders, plus 5% a month on unpaid tax up to 25%, and $340 for each late or incorrect Schedule K-1 (Form 1120-S). Those figures apply to 2025 returns, so look up the 2027 amounts when you price a late tax year 2026 filing.
Documents to collect and the request wording
Ask for the federal Form 1120-S with every Schedule K-1 (Form 1120-S) as filed. Add a shareholder list with each person's state of residence on December 31, 2026 and any move date, a payroll register by state, revenue by state or job location, and last year's Form 60.
For each nonresident shareholder add the entity type. Individuals and trusts get withholding or a composite election. A holding entity gets a signed Form PWE. A C corporation or exempt organization shareholder cannot be withheld on, so flag it. A Usual request can hold one upload item per shareholder with a not-applicable option for residents, which keeps the shareholder list from living in an email thread.
Wording for the top of the request: "For each shareholder, please confirm the state they lived in on December 31, 2026 and whether the shareholder is a person, a trust or a company. For anyone outside North Dakota, send the signed form we list for that type by March 15, 2027.".
Failure modes and fixes
Withholding is calculated on the tax instead of the share. A $900 share needs nothing, and a $1,200 share needs withholding on the whole share. Test the threshold on the apportioned share from Schedule K-1 (Form 60), shareholder by shareholder.
A shareholder moves mid-year and the client reports only the December address. Ask for the move date, because residency drives who is a nonresident and who is not. A wrong answer produces either missed withholding or withholding taken from someone who was a resident.