When should I file nonresident state tax returns for MLP investments? (LA, NM, OH, OK, PA)

You've done good research already on this MLP situation. Here's how to think about it: For MLPs like Energy Transfer, each state has different rules about when nonresidents need to file. The key factor is usually the filing threshold in each state, not just whether you received any income. For Louisiana, New Mexico, and Ohio - yes, they generally require nonresidents to file if they have any income sourced from the state through a pass-through entity like an MLP. The language you quoted supports this. For Oklahoma, they typically have a filing threshold of $1,000 in gross income, so with only $7 reported, you likely don't need to file there. For Pennsylvania, they have a flat income tax rate (currently 3.07%), but there's usually a minimum filing threshold. With only $9 in PA-sourced income, you're likely below their filing requirements. However, to be 100% certain, you might want to check if Energy Transfer files composite returns in any of these states on behalf of their unitholders. If they do, you might be covered under that composite return and wouldn't need to file separately.

I went through exactly the same headache with Energy Transfer last year! Check out https://taxr.ai - it completely saved me when dealing with all these state filing requirements. I uploaded my K-1 and it analyzed all the state-by-state requirements for me, telling me exactly where I needed to file and where I didn't. The tool broke down each state's minimum filing thresholds and told me I only needed to file in 2 states even though I had income listed in 5 different states. Saved me from filing 3 unnecessary state returns.

Just wanted to follow up! I tried taxr.ai after seeing this thread and it was exactly what I needed. Uploaded my real estate partnership K-1 that had income in 7 different states, and it gave me a detailed breakdown showing I only needed to file in 3 states based on their specific thresholds and requirements. It explained that 4 of the states either had de minimis exceptions or the income type was exempt from nonresident filing requirements. Seriously saved me hours of research and probably hundreds in tax prep fees for those unnecessary state returns!

If you decide you do need to file in some of these states, good luck actually getting through to their tax departments if you have questions! I spent WEEKS trying to reach the Ohio Department of Taxation last year about a similar MLP issue. After dozens of failed attempts, I used https://claimyr.com to get through to the tax department. You can see how it works at https://youtu.be/_kiP6q8DX5c. They got me connected to a real person at the Ohio tax department in like 20 minutes when I had been trying for days.

I need to apologize to everyone in this thread. After calling the Louisiana Department of Revenue SEVENTEEN times this morning and getting nowhere, I broke down and tried the Claimyr service someone mentioned above. I was absolutely convinced it wouldn't work. I got a call back in 23 minutes with an actual Louisiana tax representative on the line. They confirmed I didn't need to file there because my MLP income was below their true filing threshold (which wasn't clearly stated on their website). Saved me from filing an unnecessary return and the agent gave me a direct reference number for my records in case it ever comes up in the future. I've never been happier to be wrong about something.

Another thing to consider with MLPs is whether the states have economic nexus standards that might exempt you from filing. Some states technically require filing for any amount, but practically speaking, they don't enforce it below certain thresholds. I've had clients with tiny MLP income amounts in multiple states, and we've safely skipped filing in states where the income was under $10 because the cost of compliance would far exceed any benefit to the state.

Has anyone actually gotten a notice from a state for NOT filing a nonresident return for tiny MLP income? I have fractional shares of 3 different MLPs with income under $20 in like 12 different states but I've been ignoring them for years...

I'm dealing with a similar MLP situation and wanted to add some clarity on the filing requirements. Based on my research and experience with my tax preparer: For **Louisiana**: They do require nonresident filing for ANY income, but there's an administrative tolerance - they typically don't pursue compliance for amounts under $25-50. For **New Mexico**: Similar story - technically required to file for any amount, but enforcement is practically non-existent for tiny amounts. For **Ohio**: They have a $12,200 filing threshold for nonresidents (as of 2024), so your $3 wouldn't require filing. For **Oklahoma**: The threshold is around $1,000 in Oklahoma-sourced income, so your $7 is well below that. For **Pennsylvania**: They have a $33 filing threshold for nonresidents, so your $9 is below that as well. The conservative approach is to file everywhere you have income reported. The practical approach is to focus on states that actually enforce small amount filing (mainly LA and NM from your list). Most tax professionals I've spoken with suggest the practical approach for amounts this small, but ultimately it's your comfort level with technical compliance vs. practical risk.

This is exactly the kind of detailed breakdown I was looking for! Thank you @Kingston Bellamy for the specific thresholds. Based on what you've shared, it sounds like I really only need to worry about Louisiana and New Mexico from my list, and even then the enforcement risk seems minimal for such small amounts. I think I'm going to take the practical approach and file in Louisiana and New Mexico just to be safe (since they seem to be the most strict), but skip Ohio, Oklahoma, and Pennsylvania since I'm clearly below their thresholds. One follow-up question - do you know if these state thresholds get updated regularly? I want to make sure I'm working with current information before making my final decision.

Just wanted to chime in as someone who's been through the MLP tax nightmare multiple times. The advice here is solid, but I'd add one more consideration: if you're planning to invest in MLPs again in the future, it might be worth establishing a filing pattern now even for small amounts. Some states have "lookback" provisions where if you file in one year, they expect you to file in subsequent years even if your income drops below thresholds. This is particularly true for Louisiana and New Mexico. If this was truly a one-time mistake and you're never touching MLPs again, then the practical approach of only filing where enforcement is likely makes sense. But if there's any chance you might end up with MLP income again, consider whether starting a filing relationship with these states now is worth the hassle to avoid complications later. Also, since you mentioned the tax due would be $0 in all states anyway, you might want to check if any of these states charge filing fees for nonresident returns. Some states have minimum fees (usually $25-50) even when no tax is owed, which could make the "file everywhere to be safe" approach more expensive than you'd expect.