Pass-through entities are required to pay withholding on their income allocable to a nonresident shareholder, partner, member, or beneficiary. The pass-through entity pays this withholding using Form PW-1, Wisconsin Nonresident Income or Franchise Tax Withholding on Pass-Through Entity Income.
A nonresident may elect not to have these amounts withheld. To "opt out" of pass-through entity withholding, the nonresident must file Form PW-2 (Wisconsin Nonresident Partner, Member, Shareholder, or Beneficiary Withholding Exemption Affidavit) with the Department of Revenue by a specified deadline and the Department must approve the form.
For nonresident shareholders of calendar-year S corporations, the deadline for filing Form PW-2 for the 2008 taxable year is February 2, 2009.
For nonresident partners, members, or beneficiaries of other calendar-year pass-through entities (including partnerships, LLCs treated as partnerships, estates, or trusts) the deadline for filing Form PW-2 for the 2008 taxable year is March 2, 2009.
For more information, see the instructions for Form PW-2. These instructions are available on the Department's website at Forms.
January 22, 2009