Directive TA-23-1: Changes That Allow Certain Trusts and Corporations to be Eligible Partners in a Taxed Partnership

The following important information is addressed in this directive:

• An explanation of how a provision included in Session Law 2023-134 expanded the list of eligible partners for a partnership that is allowed to elect to be taxed for North Carolina income tax purposes at the partnership level (“Taxed Partnership Election”).
• Information on a special provision included in Session Law 2023-134 that allows an eligible partnership to amend its North Carolina Partnership Income Tax Return (“NC Partnership Tax Return”) for tax year 2022 to make the Taxed Partnership Election.
• Important reminders for partnerships that are eligible to make the Taxed Partnership Election for tax year 2022.

Partnerships qualifying to file an amended return for tax year 2022 under this directive must file the return by October 15, 2023. Since October 15 falls on a Sunday, partnerships have until Monday, October 16 (i.e., the next succeeding day which is not a Saturday, Sunday, or legal holiday), to file their returns.

Important: If a qualifying partnership wishes to make the Taxed Partnership Election for tax year 2022, but a software update is not available from the partnership's software provider on or before October 16, 2023, the partnership must file a paper return with the Department by October 16 in order to make the election.

If you have any questions about this directive, you may call the N.C. Department of Revenue Customer Service line at 1-877-252-3052 (7:00 am until 4:30 pm EDT, Monday through Friday).