316 Neb. Admin. Code, ch. 24, § 258

Current through September 17, 2024

Section 316-24-258 - REPORTING ADJUSTMENTS MADE BY ANOTHER STATE

258.01 Whenever the income or any tax credits of a business entity, a member of a unitary group, or the unitary group for which income is taxable in another state for any tax year, is changed or corrected in a way material to taxable income or tax liability owed to Nebraska, the change must be reported to the Department within 60 days after the final determination of the change.

258.01A Reportable changes include changes made by any competent taxing agency or a court of competent jurisdiction of the other state.

258.01B When reporting any change, the taxpayer must furnish the Department complete information regarding the amount of income reported, credits allowed, and taxes paid to the other state. The information furnished must also concede the accuracy of the final determination or give a statement outlining the specific errors of the final determination.

258.02 Any adjustments made by amended returns filed with another state that are material to tax liability owed to Nebraska must be reported to the Department. These adjustments must be reported within 60 days after the amended return is filed in the other state.

258.03 These adjustments are reported by filing:

258.03A An Amended Nebraska Corporation Income Tax Return, Form 1120XN, for the tax year involved if the taxpayer is a corporate taxpayer;

258.03B A Nebraska S Corporation Income Tax Return, Form 1120-SN, with the "Amended Return" box checked if the taxpayer is an S corporation; or

258.03C A Nebraska Return of Partnership Income, Form 1065N, with the "Amended Return" box checked if the taxpayer is taxed as a partnership.

258.04 Each amended return for Nebraska must be filed separately and cannot be attached to a return for another tax year. Any additional tax that is due must be paid when the amended return is filed.

258.05 The amended return for Nebraska must include copies of the amended return from the other state, report of the other state's taxing agency, or order from the court of competent jurisdiction, whichever is applicable; and any other documents that are sufficient to substantiate the adjustments claimed.

258.06Final Determination. The following acts are considered a final determination:

258.06A A decision by a tax court or a judgment, decree, or other order by a court of competent jurisdiction which has become final;

258.06B A closing agreement or settlement agreement which relates either to the total tax liability, or to one or more separate items affecting Nebraska tax liability;

258.06C A final disposition of a claim for a refund by the other state's taxing authority;

258.06D Any agreement between the taxpayer, or a member of a unitary group, and the taxing authority of the other state made for the express purpose of determining the tax liability of the taxpayer. To be considered a final determination, the agreement must include a waiver of restrictions on assessment and the collection of any deficiencies resulting from the agreement; or

258.06E Any other final determination causing changes in reported taxable income.

258.07Deficiencies: Statute of Limitations.

258.07A The Tax Commissioner may issue the taxpayer a notice of deficiency determination at any time if a business entity or an owner of a pass-through entity fails to file an amended return as required by this regulation, or fails to file an amended return to report any change or correction that:

258.07A(1) Changes taxable income, tax liability, or tax credits; or

258.07A(2) Affects any of these items with respect to any owner.

258.07B The notice of deficiency determination issued under Reg-24-258.07A of this section may include any issues exposed by a complete examination of the tax liability for the tax years involved.

258.07C The Tax Commissioner may issue the taxpayer a notice of deficiency determination within two years after the report or amended return was filed if:

258.07C(1) A business entity reports any change or correction in its taxable income, tax liability, or credits; or

258.07C(2) An owner of a pass-through entity reports any change or correction in the owner's taxable income, tax liability, or credits.

258.07D The notice of deficiency determination issued under Reg-24-258.07C of this section is limited to the changes in the report or amended return, or the change or correction made by the other state's taxing authority, or a court of competent jurisdiction.

258.07E The Tax Commissioner may issue the owners of a business entity a notice of deficiency determination with respect to any item of entity income during the period covered by any extension that is signed on behalf of the entity.

258.08Amended Return; Credit or Refund. An amended return reporting a change that results in an overpayment of tax for Nebraska is considered a claim for credit or refund.

258.08A The amount of the credit or refund cannot exceed the amount of the Nebraska tax attributable to the change, correction, or the items amended on the other state's return.

258.08B If the amended return is not filed within 60 days after the final determination of the change, interest on the credit or refund does not accrue after the 60th day.

258.08C If the amended return is not filed within the earlier of two years and 60 days after the final determination of the change, or 10 years after the original due date of the other state's return, no credit or refund will be granted.

258.09Pass-through Entity; Amended Return; Income Tax Withholding. When a pass-through entity files an amended return reporting an increase in its income reported to Nebraska, it must make a revised calculation of Nebraska income tax to withhold from any nonresident owners.

258.09A Revised statements of income tax withheld from the owners must be issued by the pass-through entity to nonresident owners for use by the owners when filing the appropriate Nebraska individual income tax returns.

258.09B When a pass-through entity files an amended return reporting a decrease in its income reported to Nebraska, it may not revise the calculation of Nebraska income tax to withhold from it's nonresident owners. However, the pass-through entity must provide revised income, deduction, and credit computations to its owners to use when filing the appropriate Nebraska individual income tax returns. The pass-through entity will not receive a credit or refund of any amount previously withheld and remitted on behalf of its nonresident owners.

258.09C A publicly traded partnership which did not withhold income tax under 225.02 will not calculate or issue revised income tax withholding statements for its nonresident owners.

316 Neb. Admin. Code, ch. 24, § 258

Adopted effective 7/5/2020