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I have a Minnesota based partnership with a Michigan partner. How is income tax reported for each of us since she does half the work in Michigan and I do the other half in Minnesota? Do we pay taxes in both states and claim a tax credit?
ANSWER
Expert Mark Anderson's Answer:
It will depend upon what activities are done in the state. If there is a substantial nexus with the state, then a returne probably needs to be filed. Typically, a partnership files a tax return in the state where it was formed and issues k-1s to the partners. It really depends upon the business activities being done in the states. I would check with your CPA. I hope this answers your question.
